By Chelsey Dulaney
ConocoPhillips disclosed Tuesday that it will book a pretax
charge of $400 million in its current quarter related to its
decision to curtail deep-water exploration spending.
ConocoPhillips said the charge resulted from the cancellation of
a contract for deepwater drilling in the Gulf of Mexico that was
scheduled for delivery in late 2015. The company also plans to take
a charge of $60 million to write off some rig costs.
ConocoPhillips announced its plans to pare back deep-water
drilling last week, as the Houston company reported a loss of $179
million in its second quarter amid tumbling crude prices.
At the time, the company said it was expecting capital
expenditures of $11 billion this year, down from its previous
guidance of $11.5 billion. It also lowered its operating cost
guidance to $8.9 billion from $9.2 billion.
ConocoPhillips was the first big U.S. oil producer to slash its
2015 capital spending to deal with the falling price of crude
ConocoPhillips has been scaling back expenses by the billions
and cutting head count since oil prices began to tumble last year.
Meanwhile, the company has continued to expand production.
Write to Chelsey Dulaney at chelsey.dulaney@wsj.com
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