BP Plc reported a 91 percent decline in fourth-quarter earnings after average crude oil prices dropped to the lowest in more than a decade. The company’s shares fell the most since August.

Profit adjusted for one-time items and inventory changes totaled $196 million, the London-based company said Tuesday. That missed the $814.7 million average estimate of 10 analysts surveyed by Bloomberg. The net loss for the year was $6.5 billion, the most in at least 30 years.

While Chief Executive Officer Bob Dudley has trimmed billions of dollars of spending, cut thousands of jobs and deferred projects in response to the plunge in crude prices, BP’s cash flow still doesn’t cover spending and dividends. The CEO said in an interview that he’s re-tooling BP to balance cash flows at below $60 a barrel. The slump has driven BP’s market value below $100 billion for the first time since the Gulf of Mexico oil spill in 2010.

“It’s very disappointing,” Ahmed Ben Salem, oil and gas analyst at Oddo & Cie in Paris, said by phone. “We were expecting lower profit from upstream, but not a loss. The dividend payout is probably safe for this year, but if oil stays around $30 then they would have to cut capex further.”

Profit has been lower year-on-year for six consecutive quarters as oil prices tumbled. The average price of benchmark Brent crude slumped 42 percent in the fourth quarter from a year earlier to $44.69 a barrel, the lowest since 2004.

BP’s shares slumped as much as 7.8 percent and traded at 338.65 pence as of 9:37 a.m. in London, giving it a market value of $90 billion. The stock has declined 3.6 percent this year following last year’s 14 percent retreat. It is still the third-best performer on the eight-member FTSE 350 Oil & Gas Producers Index.

PetroChina Co. said last week it expects 2015 profit to fall at least 60 percent. Chevron Corp. on Friday reported its first quarterly loss since 2002, while Royal Dutch Shell Plc said last month that fourth-quarter profit is likely to drop at least 42 percent. The European oil major is scheduled to report full earnings on Thursday.

BP started cutting costs and selling assets following the 2010 oil spill. In October, it lowered its 2015 capital-spending forecast to about $19 billion after investing about $23 billion in 2014. The company said then it expects to spend $17 billion to $19 billion a year through 2017.

Job Cuts

BP, which earlier said it plans to reduce its oil and gas exploration and production workforce by 4,000 people this year, will also cut 3,000 jobs in downstream businesses by 2017.

The company’s adjusted loss from the upstream, which includes oil and gas exploration and production, was $728 million in the quarter, compared with a profit of $2.2 billion a year earlier. Earnings from downstream, made up of refining, chemicals and trading, were $1.2 billion, similar to a year earlier and 48 percent lower than the preceding quarter.

The company expects refining margins in the first quarter of 2016 to be lower than the previous three months. Refining countered declining profit from crude oil and natural gas sales for much of 2015 as demand stayed high. A mild winter has curbed demand for some fuels including heating oil, narrowing margins and putting further pressure on companies such as BP and Shell.

The company’s ratio of net debt to equity jumped to 21.6 percent at the end of 2015, an increase of almost five percentage points from a year earlier. BP’s aim is to maintain the net debt ratio at about 20 percent and for it to be above that level while oil prices remain weak, according to a statement.

Debt Ratio

“I’m very comfortable with 21 percent net gearing right now,” CEO Dudley said in a Bloomberg television interview. “We’ll be flexible around the gearing levels, we’ll see what oil prices do.”

The company’s debt level is rising and BP was among several major oil producers given a negative credit outlook by Standard & Poor’s Monday.

BP maintained its quarterly dividend at 10 cents a share and reiterated its commitment to sustain it throughout the downturn.

The company’s capital expenditure last year was $18.7 billion compared with about $23 billion the previous year. Barclays Plc analyst Lydia Rainforth said the BP could reduce that further to $14 billion if oil stays at about $40 a barrel. That would allow the company to balance its books by 2018 and still maintain dividend payouts to shareholders, she said.

“A painful fourth quarter does not bode well for the first quarter for BP,” William Hares, a London-based analyst with Bloomberg Intelligence, wrote in a report. “Downstream operations become less of a safety net for weak upstream results” for BP and its peers in early 2016, he said.

bloomberg