Oil giant BP Plc's second-quarter profit reported this morning missed analyst estimates.
The investor presentation accompanying the earnings call following the results announcement contains one chart that highlights the difficulties faced by BP Plc as cash flow dries up.
Disposals (selling off assets) and underlying cash flow did not cover capex and dividends in the first half of 2015.
It should come as no surprise that BP CEO Bob Dudley spent a good chunk of the call with analysts highlighting how BP is going to cut costs and sell more assets. BP said it will invest "less than" $20 billion this year in projects, rather the "more than" $20 billion it said three months ago.
BP is not alone. Statoil, which also reported on Tuesday, further lowered planned spending for 2015 to $17.5 billion compared with $20 billion last year, deepening cuts by $500 million.
The focus on costs is likely to intensify as Total SA, Royal Dutch Shell Plc, Exxon Mobil Corp. and Chevron Corp update investors this week about their plans, with analysts expecting the major oil groups to reduce spending further.