Rosetta Resources Inc. (NASDAQ: ROSE) will cut its capex by 71%, but unlike E&Ps that have made similar announcements the company’s production is projected to fall 18% rather than rise.

The focus is for the company to stay on budget while oil remains stuck in the $50 range. Rosetta plans to high-grade well locations in Southern Gates Ranch in the Eagle Ford and Wolfcamp A bench.

While Rosetta joins EOG Resources Inc. (NYSE: EOG) among companies to cut or keep 2015 oil production flat, most E&Ps will continue to grow. Devon Energy Corp. (NYSE: DVN) is cutting capex but still expects production to swell by 25%.

A bounty of oil continues to hurt WTI prices. Comparing February 2015 to February 2014, U.S. production has soared to 1.1 million barrels per day (MMbbl/d) of crude, according to the U.S. Energy Information Administration. As of the second week of February, oil reserves were 58.3 MMbbl greater than at the same point in 2014.

In 2014, the company’s capital program totaled $1.22 billion, with most spent in the Eagle Ford. Rosetta plans to spend up to $350 million while operating within cash flow and producing 60,000 barrels of oil equivalent per day (boe/d) for 2015 and 2016.

Rosetta is taking steps to put the company on solid footing so that shareholders will benefit from a commodity price recovery, said Jim Craddock, the company’s chairman, CEO and president.

“We've chosen to defer production growth and focused instead on living within our means, maintaining our core acreage positions, and defending a target production level of about 60,000 boe per day,” he said. “Our project inventory is intact and we stand ready to increase capital spending when commodity prices warrant.”

Gordon Douthat, senior analyst, Wells Fargo Securities, said lower growth and lower capex are reflective of a change in the mindset of management for a prolonged commodity downturn.

Drilling and completions operations will account for 80% of capex budget, and Rosetta expects to complete 20 gross operated wells in the Eagle Ford and eight gross wells in the Permian, he said.

Rosetta’s capex is based on expectations that service costs will fall 20-30% compared with 2014 levels.

Rosetta is “one of the first companies to provide a 2016 outlook which is targeted to be flat with a reduced 2015—still something we don't think most can say if commodities hold,” Douthat said in a Feb. 24 report.

Operations

During the fourth quarter of 2014, Rosetta operated up to four rigs in the Eagle Ford area. Daily production was 65 Mboe/d, a 36% increase from 2013 and flat versus the prior quarter.

At Gates Ranch, four wells were completed and six wells awaiting completion were added for a total of 30 wells at year-end 2014. One well was also completed at Encinal in the fourth quarter.

About 214 Gates Ranch lower Eagle Ford well locations remain as of year-end 2014. Upper Eagle Ford pilot testing, including the Gates Ranch, reflects “encouraging well performance that suggests the potential to add nearly 300 additional locations,” Rosetta said.

In the Permian Basin, production averaged 8 Mboe/d in the fourth quarter of 2014, a 4% decrease from the third quarter. The company ran four rigs in the Delaware Basin area.

In the fourth quarter, nine gross horizontal wells were drilled and three gross horizontal wells completed, compared to nine gross horizontal wells drilled and seven gross horizontal wells completed in the previous quarter.