ConocoPhillips Reports Biggest Loss Since 2008 on Oil Crash

  • Loss of $1.07 billion most in six years, tempers shale growth
  • High dividend payout is investor focus amid low crude price

ConocoPhillips reported its widest quarterly loss in more than six years as a crash in oil and natural gas prices tempered growth from Texas to Canada.

The largest major U.S. oil company without refining operations said it further reduced 2015 spending by $800 million for an anticipated total of $10.2 billion. ConocoPhillips lost $1.07 billion, or 87 cents a share in the third quarter, compared with a gain of $2.17 a share a year earlier, the Houston-based company said in a statement Thursday. It was the biggest loss since the fourth quarter of 2008.

The loss mirrored those of other major oil companies, including Royal Dutch Shell Plc, which reported a third-quarter net loss of $7.42 billion Thursday, the most in more than a decade. Exxon Mobil Corp. and Chevron Corp. report earnings Friday.

Chairman and Chief Executive Officer Ryan Lance has said ConocoPhillips will continue to support its dividend, which has a yield of about 5.6 percent and is among the highest for companies that explore for and produce oil and gas. Some analysts have questioned whether the company can continue to make those investor payments while funding new drilling and limiting spending to what it receives in cash from operations.

“That will be a challenge for them,” Brian Youngberg, an analyst at Edward Jones & Co. in St. Louis, said in an interview before the earnings release. “Operationally, they’re doing well with what they can control, but they can’t control prices.”

Asset Sales

ConocoPhillips is among producers that have turned to asset sales to help shore up their finances, pay dividends and continue drilling after oil fell by more than half and natural gas declined to the lowest level in more than three years. The company will continue to sell assets to the tune of $1 billion to $2 billion a year, Matthew Fox, an executive vice president, told investors Thursday. ConocoPhillips is also cutting spending on exploration in deepwater prospects such as in the Gulf of Mexico.

Oil and gas production rose 5.5 percent to the equivalent of 1.55 million barrels a day. Excluding one-time items, the company lost 38 cents a share in the third quarter, in line with the 38-cent average of 21 analysts’ estimates compiled by Bloomberg.

ConocoPhillips, which has 14 buy, 12 hold and two sell ratings from analysts, rose 28 cents to $53.62 at the close in New York. The shares have fallen 22 percent this year.

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