ConocoPhillips (NYSE: COP) reported fourth-quarter and full-year 2015 results before markets opened Thursday. For the quarter, the oil and gas production company posted an adjusted diluted net loss per share of $0.90 on revenues of $6.77 billion. In the same period a year ago, the company reported a net loss of $0.03 per share on revenues of $11.85 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for a net loss of $0.65 on revenues of $9.06 billion.

For the year, Conoco posted an adjusted net loss of $1.40 per share and revenues of $30.94 billion. In 2014 the company posted earnings per share of $5.30 and revenues of $55.52 billion. Analysts were expecting a net loss of $1.14 and revenues of $32.11 billion.

The worse news for investors is Conoco’s decision to whack its quarterly dividend by two-thirds, from $0.74 to $0.25 per share for the payment due March 1.

Regarding its plans for 2016, the company said it is slashing capital spending from its prior guidance of $7.7 billion to $6.4 billion and its operating cost guidance from $7.7 billion to $7.0 billion. Adjusted for asset divestments in 2015, Conoco expects production to be “approximately flat” with last year’s volumes.

The company reported $10.1 billion in capital spending for 2015. Adjusted operating costs totaled $8.84 billion.

CEO Ryan Lance said:

While we don’t know how far commodity prices will fall, or the duration of the downturn, we believe it’s prudent to plan for lower prices for a longer period of time. The actions we have announced will improve net cash flow by $4.4 billion in 2016. The decision to reduce the dividend was a difficult one. The dividend has been, and will continue to be, a top priority. We still intend to provide a competitive dividend, while significantly lowering the breakeven price for the company and substantially reducing the level of borrowing in 2016. Our actions also position us to deliver strong absolute and relative performance as prices recover.

While investors may hate the cut in the dividend, from Conoco’s point of view its projected adjusted reserves replacement ratio for 2015 is just 86%. The company had to lower its proved reserves by 464 million barrels of oil equivalent due to low prices for both oil and natural gas. The company disposed of 175 million barrels through asset sales.

The company’s annual average realized price per barrel of oil equivalent fell from $64.59 in 2014 to $34.34. Net production for the year averaged 1.59 million barrels of oil equivalent per day, an increase of about 5% compared with 2014 production, excluding Libya and adjusted for dispositions and downtime.

Conoco’s shares traded down about 4% in Thursday’s premarket, at $37.10 in a 52-week range of $32.71 to $70.11. Thomson Reuters had a consensus analyst price target of $51.76 before the report.

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