ConocoPhillips revises down $2 billion from budget

ConocoPhillips has shed an additional $2 billion from its capital expenditures for 2015, decreasing total spending to $11.5 billion from the previously reported $13.5 billion, in response to the continued decline in oil prices. The $13.5 billion was already down 20% from 2014 (OGJ Online, Dec. 8, 2014).

The reductions come primarily from the deferral of onshore drilling and exploration programs in the US Lower 48, and deferral of major project spending. The company in December said it plans to significantly reduce its unconventional exploration programs in 2015.

ConocoPhillips reported a fourth-quarter 2014 net loss of $39 million, compared with fourth-quarter 2013 earnings of $2.5 billion. Excluding special items, fourth-quarter 2014 adjusted earnings were $700 million, compared with fourth-quarter 2013 adjusted earnings of $1.7 billion.

Full-year earnings were $6.9 billion, compared with full-year 2013 earnings of $9.2 billion. Excluding special items, full-year 2014 adjusted earnings were $6.6 billion, compared with full-year 2013 adjusted earnings of $7.1 billion.

“We are responding decisively to a weak price outlook in 2015 by exercising our capital and balance sheet flexibility,” said Ryan Lance, ConocoPhillips chairman and chief executive officer. “In this environment our priorities are to protect our dividend and base production, stay on track for cash flow neutrality in 2017, and preserve future opportunities.”

With the revised budget, the company now expects 2-3% production growth in 2015 from continuing operations, excluding Libya. First-quarter production for this year from continuing operations is expected at 1.57-1.61 million boe/d, also excluding Libya.

The company, along with Chevron Corp. and BP PLC, agreed on Jan. 28 to together explore and appraise 24 jointly-held offshore leases in the northwest portion of Keathley Canyon in the deepwater Gulf of Mexico (OGJ Online, Jan. 28, 2015).