It's unclear how long the oil market will remain suppressed so the best course of action is to cut back and wait for recovery, Conoco Phillips said Thursday.

The company said Thursday it lost $3.5 billion during the fourth quarter, against a net loss of $39 million year-on-year. Revenues for the third-largest oil company in the United States declined 42 percent to $6.8 billion.

Crude oil prices are down about 25 percent since the start of the fourth quarter and more than 70 percent lower that mid-2014 peaks above $100 per barrel. That's deprived energy companies of capital needed for future investments.

Conoco said it lowered its 2016 spending plans by nearly 17 percent to $6.4 billion, primarily by cutting back in operations in the Lower 48 U.S. states. Oil field services company Weatherford International, which announced plans to trim 6,000 from its payrolls, said most of its revenue loss for the fourth quarter came from U.S. declines.

"While we don't know how far commodity prices will fall, or the duration of the downturn, we believe it's prudent to plan for lower prices for a longer period of time," Conoco Chairman and CEO Ryan Lance said in a statement.

Lance added the company has made the difficult decision of reducing dividends in response to the downturn.

When reflecting on the company's reduced spending plans for the year, Conoco maintained its full-year production levels should be relatively stable when compared with last year.

A string of quarterly reports out Thursday show the sector was battered by slumping oil prices last year. Weatherford described the market conditions as brutal. Royal Dutch Shell said Thursday its full-year 2015 earnings declined an astonishing 80 percent to $3.84 billion.

Shareholders from Shell and British company BG Group backed their $7 billion merger last month. Shell CEO Ben Van Buerden confirmed Thursday the combined unit would see an estimated 10,000 layoffs from staff and direct contractor positions.

"Shell will take further impactful decisions to manage through the oil price downturn, should conditions warrant that," he said in a statement.