Conoco cuts dividend for first time in 25 years on crude crash

"We believe it's prudent to plan for lower prices for a longer period of time," Chief Executive Ryan Lance(pic) said in a statement.

NEW YORK: ConocoPhillips slashed its quarterly dividend for the first time in at least 25 years and further lowered its capital budget for 2016 as a relentless fall in crude oil prices took its toll on the largest U.S. independent oil company.

Shares of ConocoPhillips, which reported a bigger-than-expected quarterly loss, fell 4 percent to $37.08.

Global crude oil prices have dropped about 70 percent from their 2014 high of over $100 barrel, eroding profitability at nearly all oil producers and limiting their ability to award shareholders cash.

Exxon Mobil Corp , the world's largest publicly traded oil company, reported its smallest quarterly profit in more than a decade on Tuesday and said it would slow share buybacks. Noble Energy Inc. cut its dividend last week.

With oil prices now hovering at about $30 barrel, producers are cutting investments in new wells and projects, triggering another large wave of spending curbs.

ConocoPhillips on Thursday lowered its 2016 capital expenditure target by 17 percent to $6.4 billion, and its operating cost forecast by 9 percent to $7 billion.

The reduction is the second in two months.

ConocoPhillips also trimmed its quarterly dividend to 25 cents a share from 74 cents. That is the first reduction since at least 1991, according to the web site of the company, which split from refiner Phillips 66 in 2012, assuring investors of faster dividend growth.

"We believe it's prudent to plan for lower prices for a longer period of time," Chief Executive Ryan Lance said in a statement.

The dividend cut and lowered spending will help ConocoPhillips add $4.4 billion to net cash flow in 2016, he said.

The company said it expects 2016 production to be unchanged from 2015, excluding the impact of asset sales.

It produced 1.589 million barrels of oil equivalent per day (mmboe/d) in 2015.

ConocoPhillips forecast current-quarter output of 1.54-1.58 mmboe/d, lower than the 1.599 mmboe/d it produced from continuing operations in the fourth quarter.

The company's net loss widened to $3.5 billion, or $2.78 per share, in the fourth quarter ended Dec.31, from $39 million, or 3 cents per share, a year earlier.

Excluding a $2.7 billion impairment charge and other items, it lost 90 cents per share, wider than estimates of 65 cents, according to Thomson Reuters I/B/E/S.

Up to Wednesday's close of $38.63, Conoco's shares had slipped about 40 percent over the past 12 months. - Reuters