ConocoPhillips swings to loss and slashes budget, again

(Reuters) - ConocoPhillips, the largest U.S. independent oil company, on Thursday reported a quarterly loss after a year-earlier profit and slashed its 2016 budget for the second time this year, its latest response to the slump in crude prices.

The company, like many of its peers, has had to grapple with shrinking margins resulting from low oil prices. It has slashed its dividend, cut staff and curbed the drilling of new wells, all while trying to preserve growth options should crude prices recover.

Oil prices touched a low of $27.10 per barrel during the first quarter before recovering to close at $39.60 at end of March.

Conoco Chief Executive Ryan Lance, trying to balance both approaches, said he would continue to curb costs while also trying to generate strong returns.

“As challenging as this price downturn has been, we are a much stronger company for the long term,” Lance said in a statement.

Conoco reported a first-quarter net loss of $1.5 billion, or $1.18 per share, compared with a profit of $272 million, or 22 cents per share, a year earlier.

Excluding special items, the company lost 95 cents per share, compared with a loss of $1.05 per share expected by analysts on average.

The Houston-based company cut its forecast for capital spending in 2016 to $5.7 billion from $6.4 billion, just two months after reducing it and slashing its dividend by 25 percent.

Production fell to 1.58 million barrels of oil equivalent per day (mboe/d) from 1.61 million barrels.

For the year, Conoco said it still expects to reach a previously announced production target of roughly 1.53 mboe/d.

Total revenue and other income fell 37 percent to $5.02 billion.

Conoco’s shares were up 51 cents, or 1 percent, at $48.62 in early trading on Thursday.

Standard & Poor’s on Monday downgraded Exxon Mobil Corp’s prestigious AAA credit rating, because slumping crude prices may crimp its ability to fund projects and return big amounts of cash to shareholders.

Reporting by Ernest Scheyder in Houston and Swetha Gopinath and Kanika Sikka in Bengaluru; Editing by Shounak Dasgupta and Savio D’Souza