ConocoPhillips slashes dividend, says it's best to expect oil prices to be lower for a while
The world's largest independent oil and gas driller reported a fourth-quarter earnings loss on Thursday morning, as well as a dividend cut.
The company lowered its quarterly dividend to $0.25 from $0.74, and posted an adjusted earnings-per-share (EPS) loss of $0.65 for Q4.
It also lowered its full-year capital-expenditure projection to $6.4 billion from $7.7. billion.
ConocoPhillips CEO Ryan Lance said in the earnings release (emphasis ours),
"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 actions we have announced will improve net cash flow by $4.4 billion in 2016.
The decision to reduce the dividend was a difficult one. The dividend has been, and will continue to be, a top priority. We still intend to provide a competitive dividend, while significantly lowering the breakeven price for the company and substantially reducing the level of borrowing in 2016."
These comments signify the fallout of the oil crash that is wrecking the energy sector, forcing layoffs and budget cuts to continue production more efficiently.
On Thursday morning, the staffing firm Challenger, Gray & Christmas said in its monthly report that planned layoffs in the energy sector started picking up again in January, after slowing down a bit over the preceding months.
ConocoPhillips shares fell by nearly 5% in pre-market trading, and have dropped nearly 40% over the past 12 months.