The company revenue in the first quarter fell to $4.2 billion, a 40 per cent decline from the first quarter of 2015. That’s in line with the average analyst estimate of $4.2 billion.

The sharp decline in oil prices since the fourth quarter of 2014 has had a significant effect on drilling in the United States. The number of active onshore drilling rigs in the Lower 48 states fell 78% (from 1,876 to 412) between the weeks ending on October 31, 2014, and April 15, 2016, according to data from BakerHughes. The decline in active rigs and well completions is projected to result in month-over-month onshore oil production declines of 120,000 b/d through September 2016.

A high debt-to-equity ratio can present challenges in the face of falling revenue, which most U.S. oil producers experienced in 2015 because of lower oil prices. A company agrees to the terms of a bank loan or bond issuance to fund projects with the expectation that its activities will generate sufficient revenue to service the debt and eventually repay it. Debt on the balance sheet implies future cash outflows. The need to service large amounts of debt as revenues declined made companies with high debt-to-equity ratios more vulnerable to losses than companies with less leverage in their capital structures.

During this year’s first 3 months, 39 announced oil and gas deals took place accounting for a total $28 billion vs. 39 deals worth $34.4 billion in first-quarter 2015. Total deal value was down 19%.

The steep decline in oil prices over 2015 and the “new reality” of low prices for a longer period of time have led to the deferral of many high-cost projects. Based on research of public data and news releases, Deloitte Marketpoint estimates that non-OPEC cancellations and postponements include 1.3 million b/d of production over the next 5 years.

Non-OPEC oil production is declining rapidly while consumption, especially gasoline, continues to grow strongly, particularly in the United States, India and China.

Natural gas futures rose 7.6% to settle at $2.088 a million British thermal unit on the New York Mercantile Exchange, the highest in more than two months. The market has lost more than 10% this year, as a mild winter limited heating demand. But losses have been pared in recent weeks, as a cool start to spring has buoyed expectations for demand.

South America’s two largest oil producing nations face bigger threats from political turmoil than depressed crude prices, but reforms in their national oil companies (NOC) and energy ministries may be essential for their governments to survive.

Brent crude oil was last up 2.1% at $43.82 a barrel, above where it was before talks about a production freeze collapsed over the weekend. Analysts said oil prices drew support on Tuesday from a strike by oil workers in Kuwait, reducing concerns about a global glut of supply.

The Russian camp was locked in negotiations with the Saudis, Qataris and Venezuelans — a core group that had first backed the freeze in February.