ConocoPhillips said on Thursday it will pursue $1 billion in cuts to capital and operating expenditures in 2026 after reporting quarterly profit that fell short of Wall Street estimates amid weaker oil prices.
Benchmark Brent crude averaged $63.13 a barrel in the October-December quarter, down 11.3% from the same period a year earlier as supply worries and tariff concerns outweighed geopolitical tensions, the company said. The decline in crude pricing weighed on ConocoPhillips' realized revenue even as production rose.
For the fourth quarter, ConocoPhillips produced 2.32 million barrels of oil equivalent per day (boepd), up from 2.18 million boepd a year prior. The company attributed the higher output and tighter cost control in part to integration gains following its 2024 acquisition of Marathon Oil, a deal valued at $22.5 billion.
CEO Ryan Lance said the planned cost reductions build on more than $1 billion in run-rate synergies captured in 2025 after bringing Marathon Oil into the company, and reflect a renewed emphasis on capital efficiency.
Still, weaker energy prices have pressured ConocoPhillips and its peers, prompting workforce reductions, scaled-back capital plans and less drilling activity. Last year the company announced a broad restructuring that would reduce headcount by 20%-25%.
The firm's average realized price for the fourth quarter was $42.46 per barrel of oil equivalent (boe), 19% lower than the comparable quarter a year earlier. ConocoPhillips posted adjusted earnings of $1.02 per share for the quarter ended December 31, below the analysts' average estimate of $1.11 per share compiled by LSEG.
Looking ahead to 2026, ConocoPhillips forecast output between 2.33 million and 2.36 million boepd. The company outlined annual capital spending of about $12 billion and adjusted operating costs of $10.2 billion for the year.
About the company and market context
The company is the largest U.S. independent oil and gas producer. A fall in oil prices has put pressure on producers across the sector, affecting staffing levels, investment plans, and drilling programs.
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