ConocoPhillips Inc. cut its dividend and capital spending after reporting a widened fourth-quarter loss, as independent producers feel the squeeze from the sharp decline in crude prices.
The quarterly dividend was reduced to 25 cents a share from 74 cents previously. The company also lowered capital expenditures guidance to $6.4 billion from $7.7 billion and operating costs guidance to $7 billion from $7.7 billion.
“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 Chief Executive Officer Ryan Lance in a statement.
The company had previously emphasized it would prioritize maintaining the dividend while being more flexible with capital spending and the balance sheet. Conoco is the second large energy company to cut its dividend since the oil rout started, nearly a year after Eni SpA, the Italian group, became the first to do so.
The fourth-quarter net loss was $3.5 billion, or $2.78 cents a share, the Houston-based company said in a statement Thursday. That’s compared with a loss of 39 million, or 3 cents, a year earlier. The largest U.S. oil company without refining operations reported a full-year net loss of $4.4 billion, its biggest since 2008.
ConocoPhillips is the latest in a string of U.S. oil explorers that have reported losses for the year after grappling with the steep drop in crude prices. Companies have turned to asset sales and cost cuts to weather the slump. Producers are expected by analysts to report losses for 2015 totaling more than $15 billion.
The results were released before the opening of regular trading in New York. Shares fell 4.9 percent to $36.75 in early trading. The stock is down 17 percent this year. The company will hold a conference call with analysts and investors today at noon New York time.
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