Continental Resources Inc. (NYSE: CLR) is among the latest companies to hack at its budget—again—though forecasted production growth will still climb at least 16% compared with 2014.

Small-cap Rex Energy Corp. (NASDAQ: REXX) also said that its 2015 budget would be sharply lower than 2014’s.

Continental said Dec. 22 it would cut spending to $2.7 billion, about 40% less than initially announced for 2015. The figure excludes any acquisition expenses.

Bloomberg consensus predicted $4.5 billion in capex, said Pearce Hammond, managing director and co-head of E&P research, Simmons & Co. International.

“We were modeling $3.2 billion, but our estimate was based on a higher price deck” when oil was at $67 instead of $57, Hammond said. WTI has fallen 44% since the company initially composed its 2015 outlook.

Earlier this year, Continental cashed in nearly all of its 2014 to 2016 crude oil hedges for $433 million to participate in any recovery in crude prices. Some analysts believe the company took an unnecessary risk by fully exposing itself to commodity pricing and risks of volatility in oil and natural gas prices.

“This revised budget prudently aligns our capital expenditures to lower commodity prices, targeting cash flow neutrality by mid-year 2015,” said Harold G. Hamm, chairman and CEO. “This budget also maintains our financial flexibility and strong balance sheet while continuing to grow production in our core Bakken and Scoop plays. The depth and quality of our asset base coupled with our financial strength allows us to be adaptable in a variety of price environments.”

Total rig count has been reduced to 34 from 50 by the end of the first quarter of 2015 and will average 31 for the year.

Continental plans to operate 16 rigs in the Scoop, 11 in the Bakken, and four in Northwest Cana where 50% of the costs are carried by a joint-venture (JV) partner, said John Freeman, analyst, Raymond James.

The company expects well costs to fall by at least 15% below 2014 averages as service costs adjust to lower commodity prices.

Daniel P. Katzenberg, a Baird Energy analyst, said he remains on the sidelines until crude stabilizes as Continental's unhedged positioning and the underlying commodity do not provide a compelling risk/reward picture at the moment.

“Following CLR's decision to monetize nearly all oil hedges in early November, CLR has taken decisive and prudent action reducing its 2015 D&C capex budget,” Katzenberg said.

However, Continental is starting to do what Katzenberg feels is necessary and is leading the way for large-cap E&Ps to reduce crude supply.

“With the relatively tepid demand growth forecasts dwarfed by the robust outlook for supply growth, achieving market balance will necessitate changes to the global supply dynamic,” said Ethan Bellamy, senior analyst, Baird Energy. “As the global economy remains stuck in slow-growth mode, supply will likely be viewed as the only lever to pull.”

Katzenberg said Continental is starting to “move the needle” on production

“We expect to see further concessions like this throughout the fourth quarter of 2014 reporting as E&Ps are focused on balance-sheet preservation and sustaining liquidity,” he said.

Small-cap

Rex also said its 2015 operational capex would be cut to between $180 million and $220 million, a decrease of 44% from its 2014 capex guidance and a 43% down from previously announced 2015 plans.

However, the company anticipates average daily production for 2015 of at least 196 million cubic feet equivalent per day. The company expects production growth of 33%.

The expected significant production growth in 2015 is due to the company focusing on its highest quality assets and locations.

“Given the current commodity price environment, we feel that Rex Energy's 2015 capital budget allows the company to significantly grow production while also maintaining financial flexibility," said Tom Stabley, Rex Energy's CEO. "Our 2015 capital budget is designed to target our highest quality assets and we believe the continued production growth we anticipate in 2015, even at a reduced capital budget, continues to illustrate the quality of our asset portfolio and operational efficiency.”