HOUSTON (Reuters) – ConocoPhillips said on Thursday it would sharply reduce oil output in coming weeks, aiming to shut 35% of its volume by June after weak energy prices led to a loss of $1.7 billion in the first quarter.
The world’s largest independent oil and gas producer plans to accelerate output cuts by 40,000 barrels per day (bpd) in May and bring its reduction in North America by June to 460,000 bpd, the largest cut by any producer.
“We’d be curtailing as much as we could right now,” Chief Executive Ryan Lance said on a call with analysts, noting decades-low prices. Industry production cuts are “going to drive supply down to match inventory levels and what the refineries can take,” he said.
The June figure includes a 100,000 bpd reduction in the company’s Alaska oil and gas production. ConocoPhillips is one of the state’s largest oil producers, with 2019 output of 217,000 bpd.
Crude prices have crashed in the past six weeks as the coronavirus outbreak hit demand during a Russia-Saudi price war, leading to a global oil glut and prompting higher cost U.S. producers to sharply curb output.
Houston-based ConocoPhillips reported a first-quarter loss on Thursday as it took big hits from impairments and the falling value of its stake in Canadian producer Cenovus Energy Inc.
ConocoPhillips is the biggest shareholder of Cenovus, with a 17% stake, according to Refinitiv Eikon data, and its unrealized loss on the stake was $1.69 billion during the quarter.
Total realized price per barrel was $38.81 in the quarter compared with $50.59 a year earlier, ConocoPhillips said.
The company posted a net loss of $1.74 billion, or $1.60 per share, in the first quarter ended March 31, compared with a profit of $1.83 billion, or $1.60 per share, a year earlier.
Excluding items, ConocoPhillips earned 45 cents per share, while analysts had expected a profit of 23 cents, according to IBES data from Refinitiv.
ConocoPhillips shares edged lower to $42.10 and are off 36% year to date.
The company’s production, excluding Libya, in the latest quarter was 1.28 million barrels of oil equivalent (BOE) per day, a drop of 40,000 BOE per day from the same period a year ago.
(Reporting by Shradha Singh in Bengaluru; Editing by Amy Caren Daniel, Anil D’Silva and Richard Chang)