ConocoPhillips Records Loss, to Further Slash Capital Budget

By Chelsey Dulaney 

ConocoPhillips announced plans Thursday to pare its capital budget by another 15% as the exploration and production company swung to a loss in its fourth quarter amid tumbling crude oil prices.

ConocoPhillips in December was the first big U.S. oil producer to slash its 2015 capital spending, shaving 20% off its planned budget to deal with the plunging price of crude. The value of a barrel of oil has slid further since then as a flood of crude from U.S. shale continues to disrupt the global oil market.

ConocoPhillips said Thursday that it will cut its capital budget to $11.5 billion from $13.5 billion as it defers onshore drilling and exploration programs.

In the fourth quarter, ConocoPhillips' average realized price fell 19% to $52.88 per barrel. Meanwhile, its production level edged up to 1,567 million barrels of oil equivalent per day, excluding Libya.

ConocoPhillips has been selling noncore assets to focus on those with higher returns, such as U.S. shale formations, which have fueled the drilling boom. Like many energy companies in the U.S., ConocoPhillips is focusing the largest part of its investment on oil rock formations in North Dakota and Texas.

With oil prices in freefall, ConocoPhillips has said it would cut back on exploring for new sources of oil and gas, as well as on drilling in some shale formations in North America, including the Niobrara in Colorado.

Overall, ConocoPhillips reported a loss of $39 million, or three cents a share, compared with a profit of $2.5 billion, or $2 a share, a year earlier. Excluding special items, earnings were 60 cents a share compared to $1.40 a share a year earlier.

Analysts polled by Thomson Reuters had expected a per-share profit of 59 cents.

In 2012, ConocoPhillips spun off its refining arm as Phillips 66 as part of a multiyear revamp aimed at improving the company's finances.

Write to Chelsey Dulaney at [e-mail]

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