ConocoPhillips Cuts Cap-Spending Budget,To Sell $10 Billion In Assets

ConocoPhillips (COP) trimmed its 2010 capital budget and will sell about $10 billion of assets over the next two years to strengthen its balance sheet, continuing the belt-tightening for one of the hardest hit of the oil majors.

However, the third-largest U.S. oil company by market capitalization after Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) also said it would boost its quarterly dividend 6.4% to 50 cents. The company has raised the payout every year since 2002.

A number of oil and gas exploration companies, locked out of tight credit markets, have slashed their capital budgets and taken other steps to live within cash flow. Last week, ConocoPhillips said its third-quarter earnings would be hurt by lower natural gas prices and weak refining profits.

On Wednesday, the company trimmed the capital-spending target for 2010, to about $11 billion. ConocoPhillips said that level of funding could support exploration, production and reserve replacement.

That cut comes on top of earlier moves to lay off workers and an 18% reduction in its 2009 capital-expenditure program to $12.5 billion.

ConocoPhillips plans to sell assets across its exploration-and-production and refining-and-marketing portfolios. Proceeds from the sales will be targeted for debt reduction.

"This plan capitalizes on our large resource base and our strong portfolio of projects, while providing flexibility for potential changes in business conditions," said Chairman and Chief Executive Jim Mulva.

The company's latest dividend is payable Dec. 1 to stockholders on record as of the close of business Oct. 30.

Shares of ConocoPhillips were up 1.5% to $49.14 in recent trading.

- By John Kell, Dow Jones Newswires; 212-416-2480; [e-mail]

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