Conoco to offer 4% dividend to investors

Conocophillips will court income-focused investors with a dividend yield quadruple that of its peers after spinning off its refining business this month to become more of a pure oil and natural gas producer.

The plan to pay at least four per cent will help compensate shareholders for production and earnings growth that trails rivals.

The company forecasts output will shrink 4.3 per cent in 2012, before growing a compound three to five per cent in subsequent years, compared with Marathon Oil Corp. and Anadarko Petroleum Corp.’s five to seven per cent estimates.

Paying the highest dividend of a major U.S. oil producer without cutting capital spending will challenge ConocoPhillips compared with its new competitors that have lower dividend burdens. Chief Executive designate Ryan Lance gave an update to investors in a webcast on the company’s outlook.

Conocophillips’s annual dividend of $2.64 a share divided by its closing stock price on Friday of $73.63 produced a yield of 3.6 per cent. The yield for the Russell 1000 crude producers’ index was 0.9 per cent