NEW YORK (The Deal) -- With all the focus on what Exxon Mobil's (XOM - Get Report) next move will be in this opportunistic age of lower oil prices, one large company seems to have been forgotten in the mix: ConocoPhillips (COP - Get Report).

The Houston-based company is now a pure-play oil and gas explorer and producer, having spun off its refining and marketing operations into Phillips 66 (PSX - Get Report). It is still a giant in the industry, with operations in 27 countries, $53 billion in annual revenue, $117 billion in assets, 19,100 employees, production of 1.532 million barrels of oil equivalent per day (excluding Libya) and proved reserves of 8.9 billion barrels of oil equivalent.

The company, however, faces a tough environment without its downstream assets now that oil prices are lower, which has punished the stocks of oil and gas producers but helped boost the shares of some refiners. Indeed, ConocoPhillips' shares are down around 22% since the slide began in early August, while Phillips 66's shares have slipped only 5% and Valero Energy's (VLO - Get Report) stock has jumped 20.5%.

Given what may be a prolonged period of low oil prices, Conoco announced on Tuesday that it plans to slash its capital expenditures by 32% by 2017 while still boosting its production by 2% to 3% this year and 11% come 2017.

"As commodity prices declined in late 2014, we took decisive action to adjust our 2015 spending. We now believe it is prudent to position the company for lower, more volatile prices for the foreseeable future," Conoco Chairman and CEO Ryan Lance said in a statement. "Our new plan will continue to focus on delivering a compelling dividend while also achieving sustainable, modest volume growth and competitive returns."

One of Conoco's primary goals this year has been to keep intact its dividend payout, which, at a yield of 4.7%, is rich compared with other oil and gas explorers. But that is coming at the cost of cutting its capital spending along with tapping its cash reserves and taking on more debt. It's been spending more than it's bringing in (it had a free cash flow deficit of $3.4 billion last year), but its aim is to become cash-flow neutral by 2017 on "reasonable commodity assumptions," which Simmons & Co. International analyst Guy Baber thinks will require $80 Brent oil prices and gas prices of $4 per thousand cubic feet equivalent.

Some haven't been willing to wait for that to happen. Last month, news came that billionaire Warren Buffett dumped his entire stake in Conoco in the fourth quarter while boosting his investment in Phillips 66. And earlier this month Goldman Sachs analyst Neil Mehta said he was only neutral on ConocoPhillips' shares, preferring ExxonMobil for its free cash flow generation, premium returns, dividend growth and improving refining margins.

Moody's Investors Service also downgraded its rating outlook for Conoco to negative last month, citing its expectation that the company's debt balance will rise over the next two years, leading to leverage in excess of targets for its A1 rating.

"There is uncertainty to the amount and durability of increased debt, which will primarily be a function of realized oil and natural gas prices and COP's capital discipline and ability to achieve its production growth targets," Moody's vice president Gretchen French said in a release.

Moody's did note Conoco's considerable scale and global geographic diversification of reserves and production, as well as its large cash-flow profile generated from a wide base of mature producing assets, with its liquids production and oil-linked liquefied natural gas projects supporting relatively stronger revenue realizations and cash margins than some of its peers.

However, Moody's said those projects are still subject to volatility and cyclicality and a quarter of the company's production comes from North American natural gas, which will continue to be hurt by weak prices. It also noted that Conoco's finding and development costs are increasing, but that its strategy to restructure and refocus its operations will help it replace reserves and expand production once oil prices recover.

The ratings firm also slammed Conoco for having more leverage than its peers, despite those larger and more diversified reserves and production, and expects Conoco's leverage metrics will deteriorate further this year compared with its competitors so that it can maintain its high dividend payout and still heavy capital-spending program in excess of internal cash flows. Moody's expects Conoco will generate a jaw-dropping $7 billion of negative free cash flow this year after capital spending and dividends, twice as much as last year, and be negative free cash flow again next year if oil and gas prices don't recover. Moody's also estimates Conoco's retained cash flow-to-debt ratio will decline to 14% from 51% at the end of the third quarter.

Given its situation, would Conoco consider divestitures to bring in more cash? While the company shed $1.6 billion worth of assets last year, analysts don't expect the company to do much of that this year -- who would when its properties would fetch considerably less than just six months ago?

Fadel Gheit, a longtime oil and gas company watcher at Oppenheimer, expects divestitures will be "minimal in a depressed market."

GimmeCredit bond analyst Philip Adams notes Conoco's plans to fund deficits from asset sales, cash on hand and debt capacity, but he doesn't expect asset sales to make up a big chunk of that. "(The) dramatic commodity price decline has altered the proportions, and maybe the timing, but probably not the mix," he said. "So, yeah, some asset sales, (but there's a) low probability of anything major."

In November Conoco did hire RBC Richardson Barr to sell properties in West Texas' Delaware Basin, which observers expected would fetch around $175 million. But there's been no word on the sale and the company didn't respond to requests seeking comment. Like ExxonMobil, Conoco could be an acquirer, but more on the modest end, with Adams saying Conoco may add acreage within or adjacent to places where it already has a presence.

Gheit agrees that the company could do a bolt-on acquisition to add to its position in the Bakken shale or other places, but he's a little dubious.

"They have a full plate and their balance sheet gives them enough financial flexibility to take care of business, not to make acquisitions," he said. "But if a perfect fit comes by, they would not pass it up."

The picture could clear up at Conoco's analyst and investor meeting on April 8 in New York. Lance is also scheduled to speak at popular industry conference IHS CERAWeek, also in April.

In the meantime, the Conoco CEO joined a dozen other oil executives on Capitol Hill earlier this month to persuade lawmakers to lift the 40-year ban on U.S. oil exports, which would help get rid of some of the domestic excess supply and possibly boost oil prices. He also shared his thoughts in a speech to the U.S. Chamber of Commerce, emphasizing that the move would create jobs and boost the economy.

"The U.S. can't spend its way to success or cut its way to success. But we can grow our way to success, and the oil industry can be a big part of that," he said. "We can help ensure that by recognizing the new realities - and allowing oil exports."

Some are still bullish on Conoco's prospects. BlackRock (BLK - Get Report), the world's largest asset manager, put Conoco in its portfolio recently.

And, as Oppenheimer wrote in a report last month, Conoco has outperformed its peers in the last three- and five-year time periods. Oppenheirmer noted, however, that Conoco's stock performance will continue to reflect its operating performance "and how quickly it can adjust to industry conditions."

That's something to watch.

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