Shale companies benefited when the oil prices were trading higher. However, the same companies are now struggling since the global oil price witnessed a sharp drop on oil prices on YOY basis. Any improvement in the oil price appeared to have been a short-lived one. Though ConocoPhillips (NYSE:COP)’s earnings topped the Street expectations, the company slashed its capital expenditures for the current year. It is not the only company to do that. There more than twenty companies that have reduced their budget on capital expenditures.
CAPEX
The oil firm’s Chairman and CEO, Ryan Lance, said that the company exceeded its target and made good progress on big startup projects. ConocoPhillips (NYSE:COP)’s CEO said that its plans were safely executed in the June quarter for a turnaround performance. While maintaining its operational targets, he said that the company was lowering its operating cost, as well as, capital expenditures outlook. It is also shifting its investment portfolio to shorter cycle times.
Accordingly, the company reduced its capital expenditure outlook to $11.0 billion for the current year from $11.5 billion while operating cost forecast is reduced to $8.9 billion from $9.2 billion.
2Q Results
ConocoPhillips (NYSE:COP) suffered a net loss of $179 million or a loss of 15 cents a share in the second quarter compared to a profit of $2.1 billion or $1.67 a share in the year-ago quarter. Excluding adjustments, earnings would have been $81 million or seven cents a share in the second quarter. The quarterly dividend has been boosted to 74 cents a share in July.
Budget Cut
About twenty energy companies have slashed their budget on capital expenditures between 12% and 74%. All of them are having operations in Pennsylvania. Chesapeake Energy Corporation (NYSE:CHK) has reduced the CAPEX by 43% or $3.5 billion while Royal Dutch Shell plc (ADR) (NYSE:RDS.A) reduced it by $15 billion. Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) also slashed their budget by 12% each.
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