[Editor's note: This story was updated from a previous version posted at 7:56 a.m. CT March 9.]

U.S. shale producers Diamondback Energy Inc. and Parsley Energy Inc. said they would scale back drilling as crude prices extended their free fall, marking on March 9 their biggest daily plunge since the 1991 Gulf War.

The fall was triggered as Saudi Arabia and Russia signaled they would hike output in an already well-supplied market against the backdrop of the coronavirus outbreak crimping demand.

Diamondback expects to cut two rigs in April and another in the second quarter, while Parsley will reduce the number of rigs to 12 from the 15 it operated on average in the last two months and projected further reduction in the near term.

Diamondback's shares, which have nearly halved in value so far this year, tumbled about 49% while Parsley dropped 39% amid a broader slump in oil and gas stocks. The S&P energy index touched its lowest level since August 2004.

Early leadership from Diamondback should resonate well while more oil and gas producers should follow suit, analysts at Tudor Pickering Holt & Co. said in a note.

Diamondback said the reduced activity will lead to lower production and spending this year but vowed to protect its free cash flow and dividend.

"Diamondback has never been about growth for growth's sake... Because the expected returns of our 2020 program have decreased, we have decided to wait for higher commodity prices to return to growth," CEO Travis Stice said in a statement.

On the other hand, Parsley now expects its free cash flow to be just $85 million, 57.5% lower than its previous forecast, as the company resets its U.S. crude price expectations.

Parsley is now preparing for the U.S. West Texas Intermediate crude to remain between $30 and $35 per barrel for the rest of this year, down from its earlier assumption of $50 per barrel.

Smaller player Riviera Resources Inc. also said March 9 it was delaying plans to start drilling in the Ruston Field of North Louisiana.

In another grim forecast, oilfield services provider KLX Energy Services Holdings Inc. said it expects coronavirus to force producers to cut spending and investment in the coming months.

Onshore