Exploration company Tullow Oil has reported a $2 billion pre-tax loss - its first in 15 years.
It compared to pre-tax profits of $381m the year before.
Tullow also said it was scrapping a dividend payment as it deals with the consequences of falling oil prices.
The company's shares fell 7.2%, the biggest decline in the FTSE 100 index today.
The Africa-focused oil and gas explorer said it will cut operating and administrative costs on top of a slimmed down investment budget, aiming to save $500m over three years.
Sales for the year to the end of December fell by 16% to $2.2 billion.
Oil companies across the globe have been hit by a 50% drop in crude prices in eight months, putting them under pressure to make new cost cuts.
Tullow scrapped its final dividend payment, resulting in a full-year 2014 payout to shareholders of 4 pence per share compared to the 12 pence paid in each of the past three years.
"2014 was a difficult year for our industry and a challenging one for Tullow as our results today demonstrate," commented the company's CEO Aidan Heavey.
In response to this, and the fall in the oil price, Mr Heavey said that Tullow has "reset" its business and is focusing its capital expenditure on high-quality, low-cost oil production in West Africa.
"We have increased and diversified our sources of debt capital, reduced our exploration expenditure, implemented significant cost saving initiatives and we are suspending the dividend. These measures will provide us with substantial headroom and liquidity to deliver on our strategy," he added.
Tullow said its TEN development project in Ghana is progressing well and is now 50% complete. The project remains within budget and is on track to deliver first oil by the middle of 2016.
Mr Heavey said the TEN project will increase Tullow's net West Africa oil production to over 100,000 bopd by the end of 2016. This will generate substantial cash flows and place Tullow in a strong position when the sector recovers, he added.
