Houston-based ConocoPhillips said Thursday it will accelerate capital and operating cost cuts after reporting a $1.1 billion third quarter net loss.
The company reported a loss of $0.87 per share, compared with third quarter 2014 earnings of $2.7 billion, or $2.17 per share.
Excluding special items, adjusted third quarter earnings came in at a net loss of $466 million, or a loss of $0.38 per share, down from adjusted earnings of $1.6 billion, or $1.29 per share, in the year ago quarter.
The company booked after-tax impacts of $246 million from the termination of a rig contract for a Gulf of Mexico deepwater drillship, $195 million from non-cash impairments in the Lower 48 and Asia Pacific and Middle East segments, $156 million from restructuring costs, $56 million of pension settlement expenses and a $48 million decrease in depreciation from a third quarter revision in the Lower 48.
ConocoPhillips said it will further reduce its 2015 capital expenditures guidance from $11 billion down to $10.2 billion.
The company has also reduced its 2015 operating cost guidance to $8.2 billion from an initial guidance of $9.2 billion.
“For both capital and operating costs, approximately half of these reductions are due to market factors, while the remainder are the result of discretionary actions to lower costs,” the company said.
Corporate segment net expense has been reduced to $800 million while the company’s previous guidance for depreciation, depletion and amortization of $9 billion and exploration dry hole and leasehold impairment expense of $800 million are unchanged.
The guidance figures exclude any special items.
Operating costs for the first nine months of 2015 were $6.96 billion compared with $7.17 billion in 2014.
Adjusted for rig termination, restructuring charges and pension settlement expense, totaling $830 million pre-tax, operating costs improved 15 percent year-over-year.
Special items valued at $654 million pre-tax drove a 9 percent year-over-year increase in operating costs, but adjusted for special items, underlying operating costs improved 18 percent, ConocoPhillips said.
The company saw production grow 4 percent year-over year from continuing operations, adjusted for Libya, downtime and dispositions.
ConocoPhillips produced 1.554 million barrels of oil equivalent per day in the third quarter and is now on track to exceed its full-year 2015 production guidance.
“We are accelerating actions to position our company for low and volatile prices, while improving the underlying performance of the business,” Chairman and CEO Ryan Lance said.
ConocoPhillips expects to release its 2016 capital and operating plan on December 10.