Low oil prices and tepid energy demand are expected to bruise the first-quarter earnings of the world’s largest oil and gas companies. Investors poring over earnings reports this week will watch closely to see whether energy giants slash long-term plans for new projects and exploration, a sign of that oil companies expect crude prices to stay flat.

“Pretty much everyone is going to be reporting numbers that are weaker year over year,” said Stewart Glickman, an analyst at S&P Capital IQ in New York City. “There’s already been some trimming at the edges in international projects.”

Global oil prices have plunged by more than half since last summer, when Brent crude, an international benchmark, fell from $115 a barrel in June 2014 to below $45 a barrel in January, its lowest level since March 2009. Brent prices have since recovered to about $65 a barrel, although crude isn’t expected to rise much higher throughout the year.

The price decline pummeled 2014 earnings for major oil companies, which are now struggling to boost production to offset the loss in profits. Chad Watt, a natural resources editor for Mergermarket and Dealreporter, said he expects the large oil and gas firms will emphasize efficiency and cost savings in this week’s quarterly reports, rather than expanded production targets. “We’ve switched from a mentality of ‘work as hard as you can to get as much oil as you can and as much acreage as you can’ when oil prices are climbing and climbing,” he said. “Everyone is taking a breath and putting an effort on efficiency.”

So far this spring, the energy sector has reported the steepest decline in first-quarter earnings of all ten sectors on the S&P 500. Energy firms are reporting a 65.2 percent drop in earnings for the first three months of 2015, compared to the same period in 2014, a FactSet Insight report found. Among those firms, integrated oil and gas companies, including Chevron Corp. and ExxonMobil Corp., are projected to report a 67 percent drop in earnings year-over-year.

Weak earnings in the energy sector are the largest contributor to the overall earnings decline for the S&P 500. “If the Energy sector is excluded, the estimated earnings growth rate for the S&P 500 would jump to 5.6 percent, from -2.8 percent,” the FactSet report said.

Earlier this month, Royal Dutch Shell announced plans to buy liquefied natural gas maker BG Group for $70 billion, sparking predictions of a wave of energy megamergers. “This could be the trigger event that spawns additional mergers and acquisition activity in the industry,” Bill Ebanks, managing director at AlixPartners, a multi-industry consulting firm in New York, said in a previous interview.

Mergers and acquisitions in the industry are typically announced around the time earnings are reported. Glickman and Watts, however, said oil prices seem too volatile for a consolidation boom. “Buyers can seem too vulturous, and sellers are fearful of selling into weakness that might be temporary,” Glickman said. “Stability of crude oil prices, when we get there, is probably going to be helpful in ushering in more M&A activity.”

Here’s a deeper look at three of the major oil companies reporting this week.

1. ExxonMobil

ExxonMobil Corporation (NYSE:XOM) will release its first-quarter financial results on Thursday. Glickman of S&P Capital IQ said he expects the Irving, Texas, company will maintain a production outlook of single-digit growth this year as Exxon focuses on preserving its return on capital.

“They’re not going to be chasing projects that they think are going to be low margin,” he said. “They’ve accepted tepid production growth and are focusing on just the best plays that they have.”

Exxon’s energy production fell 4.9 percent last year from 2013 production. The company in March said it will cut its capital budget every year through 2017, with spending for 2015 reduced to $34 billion, a drop of nearly 12 percent from 2014 levels. “We are capturing savings in raw materials, service and construction costs,” Rex Tillerson, Exxon’s chairman and CEO, said at the time.

Exxon’s fourth-quarter earnings fell 21 percent to $6.5 billion, from $8.3 billion in the fourth quarter of 2013. Lower oil and gas prices in the upstream section and higher maintenance costs in its downstream refinery business were partially offset by improved margins in its chemical production arm, the company said.

2. Chevron

Chevron Corporation (NYSE:CVX), the second-largest U.S. oil company, is holding its quarterly earnings call on Friday. The San Ramon, California, company is expected to announce higher production plans this year compared to Exxon, much of will be driven by Chevron’s investments in liquefied natural gas (LNG) in Asia and Australia, Glickman said.

LNG is a clear, colorless liquid that’s used for heating homes, generating electricity and powering vehicles and takes up much less space during storage and transportation traditional natural gas. Although LNG prices have fallen along with crude oil, demand for the fuel is rising in China and other Asian nations as the countries aim to spur economic growth and limit pollution from burning oil and coal.

Chevron’s LNG production could help offset an overall stagnation in fuel production. The company’s net oil-equivalent production totaled 2.57 million barrels per day last year, down slightly from 2.59 million barrels in 2014, Chevron reported in January. At the same time, Chevron plans to spend $35 billion on oil and gas projects this year, or 13 percent less compared to 2014.  

In the fourth quarter, Chevron’s earnings fell 30 percent, from $4.9 billion to $3.5 billion for the period year-over-year.

3. Royal Dutch Shell

Europe’s largest energy company will post first quarter results on Thursday. Royal Dutch Shell Plc (NYSE:RDS.A) is expected to report that profit has more than halved to £1.6 billion ($2.44 billion), research analysts at the firm Sanford C. Bernstein said.

Like its budget-cutting competitors, Shell has curtailed more than $15 billion in potential spending over the next three years. In the fourth quarter, the Anglo-Dutch company’s net income fell nearly 60 percent to $773 million, compared to $1.78 billion a year earlier, while revenue slipped 15 percent to $93.4 billion last quarter.

“The agenda we set out in early 2014 to balance growth and returns has positioned us well for the current oil market downturn,” Ben van Beurden, Shell’s CEO, said in January. “However, lower oil prices and the impact of our 2014 divestments will likely reduce this year’s cash flow.”

Shell’s plan to buy BG Group would boost the company’s proved oil and gas reserves by 25 percent and raise production by 20 percent. The company put into reserve only about a quarter of the oil and gas it extracted last year -- its worst production performance in 17 years -- due to plunging oil prices. Shell says the deal would give it a market value twice the size of BP’s and larger than Chevron’s. BG Group reports its financial results on May 8.