Conoco, Occidental slash 2015 budgets amid crude price collapse

HOUSTON (Reuters) - ConocoPhillips and Occidental Petroleum Corp on Thursday slashed exploration spending plans for this year, as the third- and fourth-largest U.S. oil companies attempt to cope with a steep slide in crude prices.

Rising supplies of oil, from sources including North American shale basins, and weakening demand have flooded global markets with crude, sending prices plummeting almost 60 percent since June. On Thursday, crude traded in New York at around $44 a barrel, much lower than many oil and gas projects require to make money.

In response to the price collapse, oil and gas companies have made drastic cuts to budgets, idled drilling rigs, and in some cases, cut jobs.

ConocoPhillips, which said in December it would cut 2015 spending by 20 percent to $13.5 billion, now expects spending to be scaled back even further - by 15 percent to $11.5 billion. Occidental said it would slash its capital budget by 33 percent to $5.8 billion this year.

Conoco said it would defer drilling some U.S. onshore exploration programs and delay spending on some major projects. Occidental will pull back spending in North Dakota's Bakken Shale and in Bahrain, it said.

Analysts at Houston-based investment bank Simmons & Co said Conoco's plan to further reduce capital spending is the right move to make, in this "challenging environment."

Still, both companies expect oil and gas output to rise next year, although possibly at a slower rate. Conoco now expects oil and gas output to grow 2 percent to 3 percent. That compares with a previous forecast for growth of 3 percent.

Occidental said its production will ramp up 6 percent to 10 percent, helped by wells in the Permian Basin.

Excluding one-time items, both companies reported earnings that topped analyst expectations. Conoco was helped by better-than-expected results in its Asia Pacific and Middle East segment, while Occidental's adjusted earnings were lifted by its chemicals business.

On a net basis, both companies reported a quarterly loss.

Conoco had a fourth-quarter loss of $39 million, or 3 cents per share, compared with a profit of $2.5 billion, or $2.00 a per share. One time-items including the termination of the Freeport LNG agreement.

Occidental reported a fourth-quarter net loss of $3.41 billion, or $4.41 per share. It earned an income of $1.6 billion, or $2.04 a share, a year earlier.

(Additional reporting by Ernest Scheyder in Williston, North Dakota; Editing by Terry Wade and Bernadette Baum)

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