Survival of the fittest in oil price crash

"Clearly some of the lower quality projects have to be revisited now too, but [it's] hard for some who have declines coming and not a long list of organic opportunities," Mr Samter added.

Santos chief executive Kevin Gallagher said on Monday the producer was "resilient" at low oil prices and had options to cut back spending. Oil Search has declined to comment.

Bernstein is among analysts that have slashed oil price forecasts as a result of the all-out war for market share between Saudi Arabia and Russia, and is now expecting Brent prices to average $US40 a barrel this year, and $US50 next year.

RBC Capital Markets, which cut its forecast for Brent this year by a massive 34 per cent to $US42 a barrel, predicted a likely "protracted period of pain" ahead for producers. It cut its price targets for Australian producers across the board, with the heaviest hits to Oil Search, off 38 per cent, and Woodside, which it reduced by 27 per cent and downgraded to neutral from outperform.

"In this ‘sell first ask questions later’ environment we think as the dust settles the first names mulled over by investors will be those with strong balance sheets and flexibility towards capital programs, with the ability to dial back expenditure commitments to evade financial stress," RBC analyst Ben Wilson said.

"We think these are the attributes of companies that will ultimately weather this storm."

Low-debt Beach Energy is widely seen as among the most resilient to low oil prices.

Mr Wilson said Woodside, Beach Energy, Santos and Oil Search all had "discretionary expenditure" that could be cut back, while Origin’s growth avenues are mainly restricted to the Beetaloo Basin in the Northern Territory, where drilling is ongoing. He said RBC saw no immediate financial stress at these oil prices for any of these companies, given the work they had done to reduce costs and strengthen their balance sheets since the last price crash.

Some oil and gas producers on Tuesday saw a reprieve in the savage sell-down in their shares of recent sessions. Woodside climbed 4.3 per cent to $18.73 but has still halved since mid-January, and Beach Energy added 1.3 per cent. But Oil Search slid a further 5 per cent while Santos fell 5.3 per cent. Brent crude was trading just above $US30 a barrel, having dropped more than 50 per cent this year.

Credit Suisse analyst Saul Kavonic said investors may need to settle in for over 12 months of sub-$US40/bbl oil, with prices potentially dropping below $US20/bbl. But he said the steep sell-off "enables a rare opportunity to accumulate energy positions at discounts" while warning things could get worse as COVID-19 spreads.

Mr Kavonic named Beach and Woodside as his top picks as companies that "can capture material upside if oil recovers, but are also resilient to sustained lower oil", followed by Strike Energy amid smaller cap stocks.

He warned, however, that the market could become more wary of Woodside if oil remains low and the company doesn't reconsider its plan to sanction the $16 billion Scarborough LNG project in Western Australia for construction. The project involves the expansion of the Pluto LNG plant, which Mr Kavonic said could be avoided.

"If there was ever a time for WPL to reconsider Scarborough, we believe this is it," Credit Suisse told investors, still noting Woodside had the ability to take advantage of acquisitions opportunities that may arise in a "distressed" sector.

Macquarie noted that Woodside, Santos and Oil Search all have net debt, with gearing of 20 per cent, 30 per cent and 35 per cent respectively, with those levels rising "substantially" at current spot prices to almost 60 per cent for Santos and Oil Search.

It ranked Beach as the player with the best-placed balance sheet, followed by Woodside, then Santos and Oil Search, but said that "all have tools available to be able to service debt in the next two years".