EQT Corp. has suspended its quarterly dividends, while Basic Energy Services Inc. has cut spending by 60% and begun closing some locations, as the global oil and gas industry defends against forces that were unforeseen only three months ago.

The spread of Covid-19, combined with the continuing oil price war, has brought many energy firms around the world to their knees, after they faced a hammering on the commodity price side during 2019.

U.S. exploration and production (E&P) companies now face a triple threat because of spring bank redeterminations, Tudor, Pickering, Holt & Co. (TPH) analysts said Friday. The decline in the strip for natural gas, West Texas Intermediate (WTI) crude and the pressure on natural gas liquids “are providing risk of a triple whammy for bank decks going into the spring redetermination period,” the TPH team said.

For most small/mid-cap E&Ps, lines of credits from banks are the primary way to access debt capital, with credit lines typically secured by liens on individual properties. Borrowing bases every spring and fall are redetermined using the value of the reserve base, found by multiplying the volumes in proved developed producing (PDP) properties by an assumed price deck.

“We don’t have much insight into how each bank may alter pricing expectations this spring versus last fall, but for context, in 2020 we believe most bank deck prices had been set in the upper $40/bbl or lower $50/bbl range versus the current strip of $29/bbl WTI for 2Q2020-4Q2020,” the TPH analysts said.

“For further context, PDP values on average for our coverage, which were previously set at $55/bbl WTI near term and $53/bbl long-term last fall, could face mid $30/bbl oil near-term and $44/bbl long-term on a redetermination if run at the current strip…

“Longer term, we will be watchful for how lenders may treat discount rates on these assets as the cost of capital for the industry continues to rise while recoveries on distressed asset sales have, in some cases, taken a haircut to PDP value underwritten.”

Meanwhile, the E&Ps and oilfield services (OFS) operators are responding as they can.

Pittsburgh-based EQT, the largest natural producer in the United States, has suspended its common stock dividend to accelerate cash flow. The independent, which already had sharply cut capital expenditures (capex), expects the suspension to save around $30 million a year.

“The decision to suspend EQT’s dividend is another action to display our commitment to our debt reduction strategy, which also includes utilizing substantial near-term free cash flow and asset monetization proceeds to reduce debt,” CEO Toby Rice.

OFS operator Basic Energy, which works across the Lower 48, has cut capex by 60% to $17 million and suspended all new capital lease additions. Cost controls are being enacted across all of the business lines, and it is “adjusting staffing to current activity levels,” while furloughing “all executive, office, and administrative staff.”

Some regional district offices are being consolidated, with some “lower performing” locations closed.

“In this period of extreme volatility, we are focused foremost on protecting our employees through a tiered-action plan of response to best limit the potential threat posed by Covid-19,” CEO Keith Schilling said. “At the same time, we have acted decisively to counteract the rapidly changing market conditions. We will continue to be vigilant and act aggressively to match our costs to market activity levels and to preserve liquidity.”

Midland, TX-based ProPetro Holding Corp., a pressure pumping and completions expert in the Permian Basin, is laying off staff to address “declining fleet activity.” It also is negotiating lower pricing for expendable items, materials used in day-to-day operations and large component replacement parts.

“We are experiencing unprecedented market volatility and difficult conditions across the oil and gas industry that are putting pressure on our operations,” said CEO Phillip Gobe. “We are anticipating material declines in activity and utilization from mid-March through the end of April, and activity levels may be difficult to predict in this the volatile and rapidly changing environment.”

The same story is playing out for many of the biggest E&Ps working overseas.

Brazilian major Petróleo Brasileiro SA, better known as Petroleos, has reduced capex to $8.5 billion from $12 billion and has postponed exploration activities. It also expects to recoup around $2 billion by mothballing shallow water platforms now in operation, as well as by deferring new material contracts for three months.

The state-owned operator also postponed to December a $1.7 billion total dividend payment that was announced in February and deferred 2019 performance bonuses, overtime payments and vacation bonuses.

A 30% increase in monthly remunerations set for the CEO, executive managers and general managers also has been put on hold, while staff promotions have been canceled. In addition, Petrobras also has cut by half the number of employees who were to be on call over the next three months and suspended training.

European-based independent Aker BP ASA, which works on the Norwegian Continental Shelf, has put on hold all field development projects that have not been sanctioned, representing a 20% reduction in capex to $1.2 billion from initial guidance. “Significant reductions” also are likely for 2021 through 2022, with capex tentatively set at under $1 billion.

“Our industry is currently facing an extremely challenging situation,” CEO Karl Johnny Hersvik said. “With the measures we are now undertaking, Aker BP is well prepared to face the challenging market situation, and we have the financial resources to pursue value accretive growth opportunities ahead.”

A sampling of industry also indicates concern as more oil and gas employees face coronavirus infections. Murphy Oil Corp. CEO Roger W. Jenkins has taken a temporary medical leave on a presumptive diagnosis for Covid-19.

Michigan-based utility Consumers Energy reported one natural gas construction employee tested positive, but the employee, who worked in Oakland and Macomb counties, was said to not have had customer interactions.

In addition, at Hurricane Energy LLC’s Lancaster field offshore Scotland, a crew member on the Aoka Mizu floating production, storage and offloading platform contracted coronavirus and was airlifted to a hospital.