ConocoPhillips Earnings on the Rise

ConocoPhillips today reported third-quarter 2013 earnings of $2.5 billion, or $2.00 per share, compared with third-quarter 2012 earnings of $1.8 billion, or $1.46 per share.

Excluding special items, third-quarter 2013 adjusted earnings were $1.8 billion, or $1.47 per share, compared with third-quarter 2012 adjusted earnings of $1.7 billion, or $1.38 per share. Special items for the current quarter primarily related to gains from asset sales of the Clyden undeveloped oil sands leasehold in Canada and the Phoenix Park midstream asset in Trinidad and Tobago.

Highlights

• Achieved third-quarter guidance with production of 1,514 MBOED, including continuing operations of 1,470 MBOED and discontinued operations of 44 MBOED, which reflects two months of disruptions in Libya.
• Successfully completed major turnarounds and tie-in activities as planned.
• Eagle Ford, Bakken and Permian production increased 40 percent compared with third-quarter 2012.
• Started up major projects at Christina Lake Phase E in July and Ekofisk South in October, with final preparations underway for full-field startup at Gumusut, Jasmine and Siakap North-Petai.
• High level of exploration activity continues with drilling in the Gulf of Mexico, Australia’s Browse Basin, and unconventional plays in Canada and the Lower 48.
• Completed sale of Clyden and our interest in Phoenix Park.

“We have made significant progress toward positioning the company for 3 to 5 percent growth in volumes and margins,” said Ryan Lance, chairman and chief executive officer. “We successfully completed our major turnaround activity and have brought two major projects on line, with another three major projects expected to start production in the coming months. We completed the sale of our Clyden and Phoenix Park assets, and continue to make progress on our announced disposition program of additional nonstrategic assets. We met our production targets, despite unplanned disruptions in Libya, and increased our dividend rate in early July, reaffirming our commitment to shareholders.”

Production from continuing operations for the third quarter of 2013 was 1,470 MBOED, flat compared with the third quarter of 2012. This was primarily due to new production from development programs and major projects, offset by normal field decline and the impact of the disruption in Libya. Adjusted for dispositions, downtime and the impact from Libya, production grew by 29 MBOED, or 2 percent, compared with third-quarter 2012.

Adjusted earnings increased compared with third-quarter 2012 primarily due to higher overall liquids and natural gas prices, a higher proportion of production in higher-margin areas, and a continued portfolio shift to liquids. The company’s total realized price was $69.68 per barrel of oil equivalent (BOE), compared with $65.62 per BOE in the third quarter of 2012.

For the quarter, cash provided by continuing operating activities was $3.6 billion. Excluding a $0.2 billion increase in working capital, ConocoPhillips generated $3.8 billion in cash from operations. The company also received $1.5 billion in proceeds from asset dispositions, funded a $4.4 billion capital program and paid dividends of $0.9 billion. During the quarter, ConocoPhillips increased the quarterly dividend by 4.5 percent to $0.69 per share.

Outlook

The company’s fourth-quarter production outlook remains unchanged, with the exception of a 50 MBOED reduction for ongoing production disruptions in Libya. Full-year 2013 production from continuing operations is expected to be 1,505 to 1,515 MBOED. Full-year production from discontinued operations is expected to be 35 to 45 MBOED.

The company has announced plans to dispose of its interest in Kashagan and its Algeria and Nigeria businesses. These transactions are expected to generate proceeds of approximately $8.9 billion plus customary adjustments.

[mappress]
October 31, 2013