ConocoPhillips cuts 2010 capital program 3/12/2009 7:49:11 AM ConocoPhillips said on Wednesday it plans to slash its 2010 capital spending by 10 per cent as it tries to shore up cash amid plunging profits.
The third-largest US oil company intends to spend $US11.2 billion ($A12.11 billion) on capital projects in 2010, 10 per cent below its estimated spending in 2009.
In its third-quarter report given in late October, ConocoPhillips forecast a 2010 budget of $US11 billion ($A11.89 billion).
In 2010, about 86 per cent of its capital program will support ConocoPhillips' exploration and production segment, while its hard-hit refining and marketing segment represents about 12 per cent of the program, the Houston-based company said.
"We intend to achieve our objectives of organically replacing reserves and increasing our upstream production from a reduced, more strategic asset base, consistent with our recently announced portfolio optimisation plan," said Jim Mulva, CEO of ConocoPhillips.
The Houston-based company previously said it would cut capital expenditures and shed $US10 billion ($A10.81 billion) in assets to help pay off debt and improve its cash position amid sagging profits.
Most recently, ConocoPhillips reported a 71 per cent drop in third-quarter earnings, driven by low natural gas prices and thin refining margins. Profits in the most recent quarter suffered for all major producers, skewed by the unprecedented spike in energy prices during the year-ago period
ConocoPhillips, however, is unique among the oil companies because of what it did during the run-up in energy prices several years ago. While Exxon Mobil and other oil companies paid out dividends to shareholders and built up huge reserves of cash, ConocoPhillips reinvested an enormous amount of its cash flow and built itself into a major player.
Now, ConocoPhillips is scaling back and plans to focus its capital spending on exploration and production.
Shares of the company fell 58 cents to $51.68 in afternoon trading.
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CTP Price at posting:
15.7¢ Sentiment: None Disclosure: Held
