ConocoPhillips (NYSE: COP) reported second quarter 2015 results before markets opened Thursday morning. For the quarter, the oil & gas production company posted adjusted diluted earnings per share (EPS) of $0.07 on revenues of $8.66 billion. In the same period a year ago, the company reported EPS of $1.67 on revenues of $14.7 billion. Third-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.04 on revenues of $9.55 billion.

Conoco also lowered its capex guidance from $11.5 billion to $11 billion for the 2015 fiscal year and reduced operating cost guidance from $9.2 billion to $8.9 billion.

Conoco boosted its dividend earlier this month from $0.73 per quarter to $0.74 and now boasts a dividend yield of 5.70%, the best of the major U.S. oil companies. That modest increase was greeted with drop in the share price.

The company’s outlook for 2015 now calls for production to rise to the upper end of its growth target of 2% to 3% from continuing operations, excluding Libyan production. For the third quarter Conoco forecasts production of 1.51 to 1.44 million barrels of oil equivalent per day. Cost and expense control is forecast to add $900 million to net cash flow.

In the second quarter production totaled 1.6 million barrels of oil equivalent per day of which 608 million barrels was crude oil, up slightly from 605 million barrels of oil per day in the same period last year. The average realized price per barrel of oil fell from $103.53 in the second quarter of 2014 to $58.00. Sequentially, the average realized price per barrel of crude rose by $9.95.

CEO Ryan Lance said:

We are lowering our operating cost and capital expenditures guidance, while maintaining our operational targets. To further increase our capital flexibility, we are continuing to shift the portfolio to investments with shorter cycle times, including reductions to deepwater spending. In July, we announced an increase to our quarterly dividend as part of our ongoing commitment to return value to shareholders. This increase was more modest than in prior years, but we believe that is prudent given the current environment.

Conoco did not indicate the size of the charge it will take in the third quarter for the cancellation of a drillship the company had previously contracted for with Ensco. That charge could be as high as $396 million, the full day rate for the two years of the original contract. Conoco is still negotiating the charge with Ensco.

The company appears to be determined to maintain its dividend yield. Cutting capex, reducing operating costs, and chopping 10% from corporate expenses amounts to a savings of about $900 million, roughly equal to one quarter’s dividend payment on about 1.24 billion shares outstanding. That should soothe shareholders a little today.

Conoco’s shares traded up about 0.6 in Thursday’s pre-market at $53.22 in a 52-week range of $50.54 to $84.56. Thomson Reuters had a consensus analyst price target of $73.35 before today’s report.

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