ConocoPhillips further lowered its capital budget for 2016 and slashed its quarterly dividend as a relentless fall in crude oil prices takes a toll on the largest US independent oil and gas company.
Shares of ConocoPhillips, which also reported a bigger-than-expected quarterly loss, were down 4 per cent at US$37 (RM155) in light premarket trading on Thursday.
Global crude oil prices have dropped about 70 per cent from their 2014 high of over US$100 (RM420) per barrel, eroding profitability at nearly all oil producers.
Exxon Mobil Corp, the world’s largest publicly traded oil company, reported its smallest quarterly profit in more than a decade on Tuesday.
With oil prices now hovering at about US$30 (RM126) per barrel, producers are slashing investments in new wells and projects, triggering another large wave of spending cuts.
ConocoPhillips on Thursday lowered its 2016 capital expenditure target by 17 per cent to US$6.4 billion (RM26.9 billion), and its operating cost forecast by 9 per cent to US$7 billion (RM29.4 billion).
The reduction comes less than two months after the company outlined its spending plans for the year.
ConocoPhillips also slashed its quarterly dividend to 25 cents (RM1.05) per share from 74 cents (RM3.10) per share.
“While we don’t know how far commodity prices will fall, or the duration of the downturn, we believe it’s prudent to plan for lower prices for a longer period of time,” Chief Executive, Ryan Lance said in a statement.
The dividend cut and lowered spending will help ConocoPhillips add US$4.4 billion (RM18.5 billion) to net cash flow in 2016, he said.
The company said it expects 2016 production to be unchanged from 2015, excluding the impact of asset sales.
The company produced 1.589 million barrels of oil equivalent per day (mmboe/d) in 2015.
ConocoPhillips forecast current-quarter output of 1.54-1.58 mmboe/d, lower than the 1.599 mmboe/d it produced from continuing operations in the fourth quarter.
The company’s net loss widened to US$3.5 billion (RM14.7 billioin), or US$2.78 (RM11.68) per share, in the fourth quarter ended Dec 31, from US$39 million (RM164 million), or 3 cents (13 sen) per share, a year earlier.
Excluding a US$2.7 billion (RM11.3 billion) non-cash impairment charge and other items, loss was 90 cents per share, bigger than the average analyst estimate of 65 cents (RM2.73), according to Thomson Reuters I/B/E/S.
Up to Wednesday’s close of US$38.63 (RM162.2), Conoco’s shares had slipped about 40 per cent over the past 12 months, steeper than a more-than 25 per cent fall for the Dow Jones US Oil & Gas Index.
– Reuters