MELBOURNE, Oct. 21 (UPI) -- Australian energy company BHP Billiton said it was cutting spending in its petroleum division, but maintained production would stay the same.
"We continue to reduce costs in both our onshore U.S. and conventional businesses, and will meet our production targets with $200 million less capital investment," Chief Executive Officer Andrew Mackenzie said in a statement.
BHP reported revenue from continuing operations down 21.4 percent, total revenue down 22.2 percent and capital spending down 24 percent for the period ending June 30 compared with last year. The Australian company said it was taking a reigned-in approach moving forward.
Profits after tax for the year ending June 30 declined 85 percent to $1.9 billion.
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Energy companies are struggling to generate cash while lower crude oil prices crimp operating expenses. Crude oil prices are at historic lows because of oversupply concerns and signs of weakness in the global economy.
BHP Billiton said total oil and natural production for the period ending in September was down, primarily because of the slowdown in activity in the United States. Data reported last week from oil services company Baker Hughes show rig activity, a metric used to gauge the health of the industry, declined for the seventh straight week in U.S. basins.
Spending for BHP Billiton to oil and gas operations for 2016 is down 6 percent to $2.9 billion. Nevertheless, the company said it expects to produce 237 million barrels of oil equivalent next year, a guidance that's unchanged from previous estimates.
"BHP Billiton remains on track to meet full-year production and cost guidance after a solid operational performance this quarter," Mackenzie said.
