HOUSTON, April 28 (UPI) -- After cutting dividend payouts, ConocoPhillips said Thursday it was in a good position to weather the market downturn, but still posted a quarterly net loss.
Conoco this year cut its dividend by more than 60 percent in an effort to provide protection against a market where crude oil prices are about 25 percent lower than this time last year.
"We reduced our dividend, further reduced our 2016 capital expenditures guidance, raised low-cost debt and continued to improve our cost structure," Chairman and CEO Ryan Lance said in a statement. "As challenging as this price downturn has been, we are a much stronger company for the long term."
With the trimmed spending plans, the company said it still expects to meet its 2016 guidance of producing around 1.52 million barrels of oil equivalent per day. Second-quarter output is expected to range between 1.5 million and 1.54 million bpd.
Early this year, Lance said it was unclear how low oil prices would fall and difficult to predict how long the downturn would last. It's "prudent," he said, to prepare for a long market slump.
In its first quarter release this week, British energy company BP said market conditions suggest the sector could return to a healthy balance between supply and demand by the end of the year. A short-term market forecast from the U.S. Energy Information Administration said, however, that high stockpiles of crude oil should tug on the recent rally in oil prices.
Conoco in February said it lowered its 2016 spending plans by nearly 17 percent to $6.4 billion, primarily by cutting back in operations in the Lower 48 U.S. states. The company said Thursday it was cutting spending another 10 percent to $5.7 billion, cutting back this time on operations offshore in deep waters.
Financially, Conoco reported a first quarter net loss of $1.5 million, against year-on-year earnings of $272 million. Operating costs, meanwhile, were $1.7 billion, compared with $2.1 billion for the first quarter of 2015.