Nearly two months after shedding 10% of its workforce, ConocoPhillips slashed billions from its guidance for capital expenditures (capex) and operating costs for the remainder of 2015. It also reported a net loss of $1.06 billion for 3Q2015.

On Thursday, the largest independent producer said it was reducing its capex guidance for the full year 2015 to $10.2 billion, down from an initial estimate of $11.5 billion and a 40.4% decline from the $17.1 billion the company spent on capex in 2014. ConocoPhillips also cut its operating cost guidance for 2015 to $8.2 billion, down from an initial estimate of $9.2 billion and 15.5% below the $9.7 billion spent in 2014.

ConocoPhillips’ 3Q2015 loss of $1.06 billion (minus 8 cents/share) compared to a profit of $2.73 billion ($2.17/share) during the previous third quarter.

The company said it plans to release its capex budget and operating plan for 2016 on Dec. 10.

“We all know this is a difficult time for the industry, but we’re focused on what we can control, and that’s our production, our capital and our operating cost,” Matt Fox, executive vice president for exploration and production, said during Thursday’s call to discuss third quarter earnings.

“We’re really not just focused on the short-term. When we look at what it’s going to take to win in a more cyclical and volatile future, we think it’s a diverse low decline production base that gives us stable source of funding to sustain the dividend. And we have that.”

Production totaled 1.55 billion boe/d during 3Q2015, a 3.9% increase from the 1.5 billion boe/d produced during 3Q2014. The latest total included 577,000 b/d of crude oil from continuing operations (up 2.9% from 561,000 b/d in 3Q2014); 156,000 b/d of natural gas liquids (NGL) (down 0.6% from 157,000 b/d); and 3.98 Bcf/d of natural gas (up 3.9% from 3.83 Bcf/d).

Lower 48 production accounted for 551,000 boe/d of the latest total (up 1.4% from 543,000 boe/d in 3Q2014), while Canada produced 315,000 boe/d (up 14.1% from 276,000 boe/d) and Alaska had 160,000 boe/d (up 3.2% from 155,000 boe/d). In terms of natural gas, between 3Q2014 and 3Q2015 production fell 1.9% in the Lower 48 (from 1.49 to 1.46 Bcf/d); rose 0.7% in Canada (from 707 to 712 MMcf/d); and declined 29.2% in Alaska (from 48 to 34 MMcf/d).

ConocoPhillips said it is on track to exceed its full-year production guidance of 1.56-1.6 million boe/d for 2015. It added that it expects 4Q2015 production to total 1.59-1.63 million boe/d.

The company said it is continuing to run a 13-rig program in the Lower 48, the same as 2Q2015. It has six rigs deployed in the Eagle Ford Shale, four in the Bakken Shale and three in the Permian Basin.

“If we stay at our current level of rigs in the Eagle Ford and Bakken, we would expect to see some modest decline [in future production],” Fox said, adding that without an increase in rigs, the company expects a 3-5% decline in its unconventional production. He said additional details on the rig count into 2016 would be presented on Dec. 10.

“Clearly, 2016 production will depend on the level of capital flexibility we choose to exercise. However, you should not expect us to increase capital in these plays at current prices.”

During 3Q2015, ConocoPhillips achieved its first oil production from Surmont Phase 2, an oilsands project in Alberta (see Shale Daily, Dec. 8, 2014). It also successfully completed downstream mechanical runs at its Australia Pacific Liquefied Natural Gas (APLNG) project, and it expects its first cargo by year’s end (see Shale Daily, March 4, 2013). ConocoPhillips holds a stake (37.5%) in the project, along with Origin Energy (37.5%) and Sinopec (25%).

“As we move from 2015 into 2016, we’re seeing about $2 billion of major project spend roll-off as we complete, in particular, Surmont and APLNG,” Fox said. “We have a choice as to what to do with that and the additional capital flexibility that’s appearing. We could redirect it to shorter cycle, or we could just hold onto those opportunities for another time.”

In separate statements last July, ConocoPhillips said it was curtailing spending in the deepwater Gulf of Mexico and that its Alaskan unit, ConocoPhillips Alaska, would sell its North Cook Inlet Field and one-third interest in the Beluga River Field (see Daily GPI, July 29;July 17). Two months later, it announced a 10% reduction in its workforce (see Daily GPI,Sept. 2).

Fox said the company would provide more details over the sale of its non-core natural gas assets in North America on Dec. 10, but divulged that “on average, over any period of time, we should be cleaning the portfolio and that could be $1 billion to $2 billion a year.”

ConocoPhillips’ investor presentation for 3Q2015 said the company was progressing with the sale of its noncore gas assets in the Lower 48 and Canada.

“These are predominantly going to be asset sales that we would be doing regardless of a commodity price environment,” said CFO Jeff Sheets. “[With] a portfolio of our size, we’re always going to be in the process of trying to find the assets someone else would value more highly than we do…things like some parts of our North American natural gas portfolio might fit in that category.”