ConocoPhillips profit slips on lower oil prices

U.S. oil major ConocoPhillips recorded a smaller quarterly profit in 3Q 2019 due to lower realized oil prices and higher exploration expenses. 

ConocoPhillips on Tuesday reported third-quarter 2019 earnings of $3.1 billion, compared with third-quarter 2018 earnings of $1.9 billion.

Excluding special items, third-quarter 2019 adjusted earnings were $0.9 billion, compared with third-quarter 2018 adjusted earnings of $1.6 billion. Special items for the current quarter were primarily due to a gain realized on the completed United Kingdom divestiture.

Namely, ConocoPhillips last April entered into an agreement to sell two of its UK subsidiaries to Chrysaor for $2.675 billion, plus interest and customary adjustments. The transaction was completed at the end of September.

Earnings increased compared with third-quarter 2018 primarily due to the gain from the UK divestiture, partially offset by lower realized prices.

Excluding special items, adjusted earnings were lower compared with third-quarter 2018 due to lower realized prices and higher exploration expenses from increased dry hole costs, partially offset by higher volumes.

The company’s total realized price was $47.07 per barrel of oil equivalent (BOE), 18 percent lower than the $57.71 per BOE realized in the third quarter of 2018, reflecting lower market prices.

ConocoPhillips has also recently announced the Australia-West divestiture agreement for $1.4 billion, plus customary closing adjustments, subject to regulatory and other approvals.

Production up 

Production excluding Libya for the third quarter of 2019 was 1,322 thousand barrels of oil equivalent per day (MBOED), a 98 MBOED increase over the same period a year ago.

Adjusting for closed dispositions and acquisitions, underlying production increased 83 MBOED primarily due to production growth from the Big 3 unconventionals, development programs, and major projects in Alaska, Europe, and Asia Pacific. This growth more than offset normal field decline. Production from Libya averaged 44 MBOED.

Ryan Lance, chairman and chief executive officer, said: “This quarter extends our successful track record of performance since we reset our value proposition in 2016. In November, we’ll present a 10-year capital and financial plan at our Analyst & Investor Meeting that emphasizes free cash flow generation with competitive returns on capital and returns of capital.”

ConocoPhillips’ fourth-quarter 2019 production is expected to be 1,265 to 1,305 MBOED. The guidance excludes Libya and reflects the impacts from the completed UK divestiture.

Offshore Energy Today Staff

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