The first major oil companies to report earnings amid the worst oil crash since 2009 all pledged to protect shareholder payouts even as they announced more than $20 billion in spending cuts in a span of five hours.

By preserving and even increasing dividends, energy companies are attempting to keep investors on board while they wait for oil and natural gas prices to rebound to more profitable levels. Producers, meanwhile, are choosing to cut drilling programs and workforces to weather a downturn that could extend for years.

Royal Dutch Shell Plc, Occidental Petroleum Corp. and ConocoPhillips pledged to slash spending by almost $10 billion this year alone -- enough to drill more than 1,400 shale wells. The risk: cannibalizing budgets to feed cash to shareholders may leave companies with reserves too anemic to fuel future output, said Timothy Doubek, who helps manage $26 billion in corporate debt at Columbia Management Advisors.

“It’s a pretty impressive ax they’re taking to their drilling budgets, but when the stock is down 30 or 50 percent, what are they trying to protect by preserving dividends?” Doubek said in a telephone interview from Minneapolis. “You’re protecting a stock price that can’t be protected. Why don’t you keep as much cash as possible so you can be the first one to take advantage when assets go up for sale?”

Cash Outlay

Shell, Occidental and ConocoPhillips handed over more than $17 billion in dividends to shareholders last year, according to data compiled by Bloomberg. For the full year, Shell and ConocoPhillips paid out $11.8 billion and $3.5 billion, respectively. Occidental’s dividend bill for the first nine months of 2014 was $1.69 billion; the company hasn’t yet disclosed its fourth-quarter payout.

The scaled-down 2015 investment programs overshadowed a mixed bag of results the companies announced as they closed the books on the fourth quarter. “We see pressure on our investment program,” Shell Chief Executive Officer Ben van Beurden said on Bloomberg TV. “It’s a game of being prudent, but at the same time not overreacting.”

Crude oil fell below $44 a barrel in New York trading today, the lowest in almost six years, as rising U.S. production adds to oversupplies.

Statoil ASA, Tullow Oil Plc and Premier Oil Plc said they’ve delayed projects or cut exploration spending. BP Plc has frozen wages and Chevron Corp. delayed announcing its 2015 drilling budget so that it could reassess the market.

Protecting Returns

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