ConocoPhillips unveiled deep cost-cutting measures today, as it became the first US oil major to slash its quarterly dividend, due to the increasingly gloomy outlook for commodities and tighter credit conditions across the industry.
Shares in ConocoPhillips, the largest US independent oil and gas company, slumped 1.24 per cent to $38.15.
It cut capital expenditure forecasts for 2016 to $6.4bn (£4.4bn) from $7.7bn, and operating cost forecasts to $7bn from $7.7bn. The firm also shrank its quarterly dividend to 25 cents per share from 74 cents per share.
Ryan Lance, chairman and chief executive officer, said: "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.
"The decision to reduce the dividend was a difficult one. The dividend has been, and will continue to be, a top priority."
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Lance said that the spending cuts and smaller dividend are expected to improve ConocoPhillips' net cash flow by $4.4bn this year.
Oil prices have fallen around 70 per cent from a high of more than $100 per barrel over the last 18 months, eating into the profitability of oil producers. This has forced many to abandon new wells and projects, as well as axing jobs.
ConocoPhillips expects 2016 production to be unchanged from 2015, excluding the impact of asset sales. It produced 1.589m barrels of oil last year.
The company's net loss widened to $3.5bn in the fourth quarter ended 31 December, up from $39m a year earlier.
During this period its total realised price per barrel of oil equivalent nearly halved to $28.54, from $52.88 in the fourth quarter of 2014.