ConocoPhillips (COP 1.51%) announced that it would reduce its capital spending plan as well as its share repurchase activities in response to the recent plunge in crude oil prices. The company intends to trim its budget by $700 million, or about 10% below its prior guidance. It also plans to slow its share repurchase run rate from $750 million per quarter to $250 million per quarter, starting in the second quarter. 

In commenting on the moves, CEO Ryan Lance stated in the press release that: "Our industry is clearly experiencing an unprecedented event brought about by simultaneous supply and demand shocks. The actions we are now taking reflect an acknowledgement of current events as well as uncertainty around the timing and path of a recovery."

An oil pump at dusk with rows of clouds in the sky.

Image source: Getty Images.

Overall, the energy company plans to slow its development activities in the lower 48 states as well as defer some drilling in Alaska. It expects these moves to impact its full-year production by about 20,000 barrels of oil equivalent per day (BOE/D). That's relatively minor, given the company's guidance that output would average between 1.23 million and 1.27 million BOE/D this year.  

The spending reduction, when combined with the slower repurchasing pace, will reduce ConocoPhillips' cash uses by $2.2 billion this year. That will enable it to preserve most of its financial flexibility -- which included $8.4 billion in cash and equivalents -- during this downturn. Further, the company noted that it would continue reviewing its capital and operating plans, leaving the door open for further spending reductions.