Some companies have not gone the route of stock offerings. One of those is Anandarko Petroleum, which has managed declines with a 5 percent production cut this year. It has also benefited from asset sales and is focused on selling $2-3 billion in assets this year, according to Macquarie Research. Macquarie, in a report Wednesday, said Anadarko may avoid an equity offering again next year, as long as it can raise sufficient funds from selling assets and the debt market reopens, allowing it to refinance.
According to Citigroup, the companies it follows are shaving 2016 E&P capital spending by 50 percent from last year's level. Citi's analysis of the plans of 52 companies showed that total worldwide oil production is projected to decline by 3.5 percent from 2015. U.S. production is expected to decline by less.
"U.S. oil production for a sub-group of 43 companies that break out U.S. oil volumes and which represent nearly 45 percent of total domestic oil production is expected to decline 2.8 percent year over year, in aggregate," the Citigroup analysts wrote.
E&P companies also face bank redeterminations in April. Pacanovsky expects the banks to cut back on available credit. "Companies didn't take a big cut in the fall redetermination but being that there's more acceptance for this lower for longer scenario, I think the banks will be less forgiving. I think we will see a much bigger cut," she said.
She said she is constantly reviewing the companies she covers and has dropped some because they became too stressed or were forced to initiate a restructuring. "If their liquidity is not sufficient to cover spending in a very distressed pricing environment in the next two years, then they're going to face difficulties," she said. She weighs the liquidity companies have access to versus the outspend, or the difference between capital expenditures and cash flow.
In the small- to mid-cap sector, many companies were already at risk of or violating their borrowing covenants and could not take on more debt, she said.
In a report on oil services companies, JPMorgan analysts also noted the bank reviews, mentioning Superior Energy Services, Forum Technologies and Now Inc. "Banks are signaling liquidity cuts even for those with sound balance sheets (SPN, FET, DNOW), and already loosened debt covenants could warrant further renegotiation. While we think most can manage debt loads through the trough, until the macro outlook firms, balance sheet durability should continue to garner a value premium," the analysts wrote in a note.
Pacanovsky said the U.S. industry has been a victim of its own success, and the recovery has been slower because drillers became more efficient. The expected decline in overall U.S. production was slow in coming.
"For the same amount of dollars, you get more initial production coming out of a program. All of this progress that the industry has made in a sense is coming back to bite them," she said, adding that companies could be making cuts and cap ex reductions but see actual production increases.