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ConocoPhillips further slashes 2015 capital budget

Xinhua, January 30, 2015 Adjust font size:

ConocoPhillips, the world's largest independent oil and gas company, on Thursday reported a loss in the final quarter of 2014 and slashed its capital budget for the second time this year in response to the plummeting crude prices.

The Houston-based company announced in a statement released Thursday that it saw a net loss of 39 million U.S. dollars, or about 3 cents per share, compared with a 2.5 billion U.S. dollars or 2.00 dollars per share performance in the fourth quarter of 2013.

Its full-year 2014 earnings were 6.9 billion U.S. dollars, or 5.51 U.S. dollars per share, compared with full-year 2013 earnings of 9.2 billion U.S. dollars, or 7.38 U.S. dollars per share.

In anticipation of weak 2015 commodity prices, the company also further reduced its expected 2015 capital expenditures to 11.5 billion U.S. dollars from the 13.5 billion U.S. dollars previously announced.

Reductions will come primarily from the deferral of onshore drilling and exploration programs in the Lower 48, and deferral of major project spending. At this level of capital, the company expects to achieve 2-3 percent production growth in 2015 from continuing operations, excluding Libya.

"We are responding decisively to a weak price outlook in 2015 by exercising our capital and balance sheet flexibility," said Ryan Lance, chairman and chief executive officer. "In this environment our priorities are to protect our dividend and base production, stay on track for cash flow neutrality in 2017, and preserve future opportunities."

ConocoPhillips' latest announcement came as oil companies began announcing spending cuts and job cuts following a steep slide in oil prices since last summer. Analysts expect most energy companies to cut their 2015 spending by 20 percent or more.

ConocoPhillips was created through the merger of Conoco Inc. and the Phillips Petroleum Co. in 2002. It is the world's largest independent pure-play exploration and production company and the third-largest U.S. energy producer behind ExxonMobil and Chevron. Enditem