ConocoPhillips said on Thursday it aims to cut capital and operating costs by $1 billion in 2026, after the U.S. oil and gas producer missed Wall Street estimates for fourth-quarter profit due to weaker crude prices.
Benchmark Brent crude prices averaged at $63.13 a barrel during the October-December quarter, 11.3% lower than a year earlier, as concerns about oversupply and tariffs outweighed geopolitical risks.
ConocoPhillips’ production for the reported quarter was 2.32 million barrels of oil equivalent per day (boepd), compared with 2.18 million boepd a year ago.
Although the company achieved higher production levels and tighter cost controls following the $22.5 billion acquisition of Marathon Oil in 2024, it still faced challenges due to weaker energy prices.
CEO Ryan Lance said the cost-reduction push builds on more than $1 billion in run-rate synergies captured in 2025 following the integration of Marathon Oil, as the company sharpens its focus on capital efficiency.
A fall in oil prices has put ConocoPhillips and its rivals under pressure, forcing them to cut staff, curb capital spending, and reduce drilling. The company said last year it would cut 20%-25% of its workforce as part of a broad restructuring.
Its average realized price was $42.46 per barrel of oil equivalent (boe) for the fourth quarter, 19% lower than the year earlier.
ConocoPhillips forecast 2026 output to be between 2.33 million and 2.36 million boepd, and outlined annual capital spending of about $12 billion and adjusted operating costs of $10.2 billion.
The largest U.S. independent oil and gas producer posted an adjusted profit of $1.02 per share for the quarter ended December 31, compared with analysts’ average estimate of $1.11 per share, according to data compiled by LSEG.
(Reporting by Pooja Menon in Bengaluru; Editing by Maju Samuel and Shilpi Majumdar)