ConocoPhillips to slash capex, dividend. Posts quarterly loss of $3.5B

ConocoPhillips, a U.S. oil and gas company, on Thursday posted losses both for the fourth quarter and full year, and said it would slash the dividend and capital expenditure.

The company posted a fourth-quarter 2015 net loss of $3.5 billion compared with a fourth-quarter 2014 net loss of $39 million.

ConocoPhillips blamed the quarterly result mostly on non-cash impairments due to price impacts and changes to future exploration plans, partially offset by net gains on asset sales.

Full-year 2015 earnings were a net loss of $4.4 billion, or ($3.58) per share, compared with full-year 2014 earnings of $6.9 billion.

Dividend cut down

The company also said it would reduce its quarterly dividend to 25 cents per share, compared with the previous quarterly dividend of 74 cents per share. The dividend is payable on March 1, 2016 to stockholders of record at the close of business on Feb. 16, 2016.

Furthermore, ConocoPhillips said it would revise its previously announced 2016 operating plan. The company lowered capital expenditures guidance from $7.7 billion to $6.4 billion and operating cost guidance from $7.7 billion to $7.0 billion.

Production flat in 2016

Production in 2016 is expected to be approximately flat with 2015 volumes, adjusted for the full-year impact of 2015 asset divestitures. The company achieved full-year 2015. production of 1,589 MBOED; 5 percent production growth from continuing operations, adjusted for Libya, downtime and dispositions.

Production from continuing operations for the fourth quarter of 2015 was 1,599 thousand barrels of oil equivalent per day (MBOED), an increase of 32 MBOED compared with the same period a year ago, excluding Libya.

“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,” said Ryan Lance, chairman and chief executive officer.

Lance said that the actions the company has announced would improve net cash flow by $4.4 billion in 2016. “The decision to reduce the dividend was a difficult one,” he said

Lance added: “The dividend has been, and will continue to be, a top priority. We still intend to provide a competitive dividend, while significantly lowering the breakeven price for the company and substantially reducing the level of borrowing in 2016. Our actions also position us to deliver strong absolute and relative performance as prices recover.”

Offshore Energy Today Staff