ConocoPhilips slashes dividend in face of uncertain outlook for commodities

Conoco Philips slashed its dividend payout by two-thirds and unveiled new reductions to its capital investment programme as well as cost cuts alongside its fourth-quarter results.

The integrated US oil company referenced both the weakening outlook for commodity prices and credit tightening across the industry as the reasons why it took those actions to protect its balance sheet.

Ryan Lance, the company´s boss 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.”

Lance added that the actions taken by the outfit would improve its net cash flow in 2016 by $4.4bn.

Shareholders were told to expect a fourth quarter dividend of 25 cents per share, instead of last year´s 74 cent payout.

Houston-based Conoco explained that its net losses for the fourth quarter of 2015 ballooned from $39m or three cents per share one year ago to $3.5bn or -$2.78 for the latest three-month stretch.

Excluding extraordinary items, the company´s loss deepened from $700m one year back to $1.1bn or -90 cents per share.

Company unveils reductions in capex and opex

Those 'one-off' financial charges were mainly related to impairments resulting from price impacts and changes to future exploration plans, partially offset by net gains on asset sales.

Capital expenditures in 2016 were now seen at $6.4bn instead of $7.7bn and operating costs at $7.0bn, down from $7.7bn.

Production guidance was also marked down as a result of the firm´s now lower projections for so-called capex, to "essentially flat" in comparison to 2015 production of 1,525 MBOED.

As of 16:28GMT shares in Conoco Philips were losing 4.38% to $36.96.