"Factors including lower operating costs and oilfield services expenses, modest hedge protection and easier access to midstream infrastructure, will partially support margins through at least the middle of next year." E&P firms have slashed capital spending much more quickly in 2020 than they did during the 2015-16 downturn, Alam said. In addition, spending is down 40 to 50 per cent this year, and absent of higher oil prices spending would continue at these low levels in 2021. The rating agency anticipated that lower spending would lead to flat volume growth in 2021. Firms that suspended dividends and share buybacks in 2020 will likely use any excess cash flow to maximize shareholder returns or pay down debt, before increasing capital spending. Meanwhile, constrained access to capital and looming debt maturities will remain the biggest hurdles for speculative-grade companies with high debt loads, limited hedging and tight liquidity, Moody's added.