ConocoPhillips Sets 20% Lower 2015 Capital Budget Of $13.5 Bln

(RTTNews) - Energy giant ConocoPhillips (COP) announced Monday a 2015 capital budget that is 20 percent lower than that of 2014, reflecting lower spending on major projects, and deferral of spending on North American unconventional plays. However, the company expects 2015 production from continuing operations, excluding Libya, to grow about 3 percent, despite the lower investment.

"We are setting our 2015 capital budget at a level that we believe is prudent given the current environment. This plan demonstrates our focus on cash flow neutrality and a competitive dividend, while maintaining our financial strength. We are fortunate to have significant flexibility in our capital program, Chairman and CEO Ryan Lance said in a statement.

The Houston, Texas-based oil company set its 2015 capital budget at $13.5 billion, down 20 percent from last year.

The capital is expected to be invested in for base maintenance and corporate expenditures, development drilling programs, major projects, and exploration and appraisal spending.

The lower planned spending in several producing assets across the portfolio will see a slightly reduced budget allocation of about $1.9 billion for base maintenance and corporate expenditures.

Development drilling programs will be allocated about $5 billion from the budget, down from $6.5 billion last year.

Meanwhile, budget allocation for major projects will be about $4.8 billion in 2015, significantly lower than last year, which included peak spending at the APLNG and Surmont Phase 2 projects in 2014.

Exploration and appraisal programs are allocated about $1.8 billion from the budget, slightly lower from last year.

ConocoPhillips noted that it will provide further details on its 2015 capital program and production outlook during its fourth-quarter conference call on January 29, 2015 and at its analyst meeting on April 8, 2015 in New York.

In Monday's regular trading session, COP is currently trading at $66.23, down $1.62 or 2.39% on a volume of 1.33 million shares.