ConocoPhillips said Thursday it was preparing for a sustained period of lower crude oil prices by making significant reductions in capital and operating costs.

"We're setting an operating plan for 2016 that recognizes the current environment, which remains challenging," Chairman and Chief Executive Officer Ryan Lance said in a statement.

The company's overall capital budget of $7.7 billion is a 25 percent reduction in expected full-year capital spending for 2015. Chevron, which has headquarters in California, issued a similar budget forecast.

Oil companies are trimming staff and spending less on exploration and production. The latest report from oil services company Baker Hughes shows drastic reductions in rig deployments across North America, a measurement used to gauge the health of the industry.

Conoco said it was spending about 34 percent of its full-year 2016 budget on the Lower 48 U.S. states. The approximate $2.6 billion is a 30 percent reduction from 2015. Focus there would be on North Dakota and Texas shale basins, as well appraisal activity in the Gulf of Mexico. About $1.3 billion, or 17 percent of the budget, targets Alaska, a decline of 5 percent from this year.

About 10 percent of its budget, or around $800 million, will focus on Canadian operations, with some of the focus centered on exploration prospects off the coast of Nova Scotia. Nova Scotia's government estimates there may be as much as 120 trillion cubic feet of natural gas and 8 billion barrels of oil offshore.

Recent comments from the World Bank and the International Energy Agency suggested oil markets won't see any major recovery for at least a year. The Organization of Petroleum Exporting Countries said some sense of normalcy could appear in late 2016.

"As we enter 2016, ConocoPhillips has greater capital flexibility, a more competitive cost structure, a streamlined portfolio and the ability to deliver profitable growth from a high-quality resource base," Lance said.