As oil prices look set to expand their almost 2-year rout, major energy companies are accelerating their dividend cuts and further chopping costs in an effort to shore up dwindling cash flows.

However, it’s not only the smaller, more-leveraged exploration outfits that have been busy housecleaning. Even the fairly large producers – considered safe harbors with strong balance sheets and substantial dividends – are being forced to cut/suspend high yielding payouts in order to survive the cataclysmic energy-price scenario.

Negative Announcements Galore

Oil sector’s fast deterioration has forced producers to make deep cost cuts by reducing/suspending their payouts.

Let’s look at four big energy companies that slashed/eliminated their dividends in 2016:

1.  ConocoPhillips (COP – Analyst Report): In Feb, Houston, TX-based energy major ConocoPhillips became the first large U.S. production company to chop its dividend to deal with more challenging times ahead. The Zacks Rank #3 (Hold) energy finder – which no longer possesses a downstream segment that could have benefitted from cheap oil – slashed its payout by 66%. The dividend cut announcement was accompanied by a leaner capital spending for 2016. At $6.4 billion, it compares with $10.1 billion in 2015 and $17 billion spent in 2014. 

2. Anadarko Petroleum Corp. (APC – Analyst Report): With an aim to endure the precipitous commodity price downturn, The Woodlands, TX-headquartered Anadarko Petroleum lowered its dividend by 81% to 5 cents per share from 27 cents per share. The Zacks Rank #3 company also plans to cut capital spending nearly 50% from the previous year while reducing its U.S. onshore rig count by 80%.   

3.  Devon Energy Corp. (DVN – Analyst Report): Lower oil prices also forced Devon Energy to slash its dividend by 75% to 6 cents a share. The large-cap energy explorer, sporting a Zacks Rank #3, also announced plans to lay off 20% of its workforce in the first quarter, apart from reducing 2016 capital spending by three-fourths to a range of $900 million to $1.1 billion.