ConocoPhillips said Wednesday it plans to slash its 2010 capital spending by 10 percent as it tries to shore up cash amid plunging profits.
The nation's third-largest oil company intends to spend $11.2 billion on capital projects in 2010, 10 percent below its estimated spending in 2009. In its third-quarter report given in late October, ConocoPhillips forecast a 2010 budget of $11 billion.
In 2010, about 86 percent of its capital program will support ConocoPhillips' exploration and production segment, while its hard-hit refining and marketing segment represents about 12 percent of the program, the Houston-based company said.
"We intend to achieve our objectives of organically replacing reserves and increasing our upstream production from a reduced, more strategic asset base, consistent with our recently announced portfolio optimization plan," said Jim Mulva, CEO of ConocoPhillips.
The Houston-based company previously said it would cut capital expenditures and shed $10 billion in assets to help pay off debt and improve its cash position amid sagging profits.
Most recently, ConocoPhillips reported a 71 percent drop in third-quarter earnings, driven by low natural gas prices and thin refining margins. Profits in the most recent quarter suffered for all major producers, skewed by the unprecedented spike in energy prices during the year-ago period
ConocoPhillips, however, is unique among the oil companies because of what it did during the run-up in energy prices several years ago. While Exxon Mobil and other oil companies paid out dividends to shareholders and built up huge reserves of cash, ConocoPhillips reinvested an enormous amount of its cash flow and built itself into a major player.
Now, ConocoPhillips is scaling back and plans to focus its capital spending on exploration and production.
Shares of the company fell 42 cents to close at $51.84 Wednesday.