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ConocoPhillips Slashes Oil Drilling Budget Again

"We are responding decisively to a weak price outlook in 2015 by exercising our capital and balance sheet flexibility," said CEO Ryan Lance.

NEW YORK -- Oil company ConocoPhillips (IW 500/22) Thursday slashed its 2015 drilling budget, cutting it for the second time in less than two months as falling oil prices pressure petroleum-sector earnings.

ConocoPhillips now plans $11.5 billion in capital spending for 2015, down from the $13.5 billion announced in December, which was itself a cut of 20% from the 2014 level.

The move came as ConocoPhillips reported a net loss of $39 million for the fourth quarter, compared with $2.5 billion in profits a year ago, due in part to lower commodity prices.

"We are responding decisively to a weak price outlook in 2015 by exercising our capital and balance sheet flexibility," said CEO Ryan Lance.

"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."

ConocoPhillips said the cuts would entail delays in some U.S. drilling and deferrals on some major projects. 

Also Thursday, Anglo-Dutch oil giant Royal Dutch Shell (IW 1000/1) unveiled plans to slash spending by more than $15 billion over the next three years after posting lower annual profits on tumbling oil prices.

And Occidental Petroleum (IW 500/48) said it would spend $5.8 billion in capital investment in 2015, down from $8.7 billion in 2014, as it reported a swing into a fourth-quarter loss of $3.4 billion.

Oil prices have dropped about 60% since June due to copious supplies, weak demand and a decision by the Organization of the Petroleum Exporting Countries to resist calls for it to cut output in response to low prices.

Copyright Agence France-Presse, 2015

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