Red ink for ConocoPhillips

U.S. oil major ConocoPhillips recorded a loss in the third quarter of 2020 compared to a profit in the same period last year.

ConocoPhillips on Thursday reported a third-quarter 2020 loss of $0.5 billion compared with third-quarter 2019 earnings of $3.1 billion.

Excluding special items, third-quarter 2020 adjusted earnings were a loss of $0.3 billion compared with third-quarter 2019 adjusted earnings of $0.9 billion.

Special items for the current quarter were primarily due to an unrealized loss on Cenovus Energy equity, partially offset by a favourable outcome from pending claims and settlements.

Production excluding Libya for the third quarter of 2020 was 1,066 thousand barrels of oil equivalent per day (MBOED).

After adjusting for estimated curtailments of approximately 90 MBOED and closed acquisitions and dispositions, third-quarter 2020 production would have been 1,155 MBOED, a decrease of 46 MBOED or 4 per cent from the same period a year ago.

This decrease was primarily due to normal field decline partially offset by growth from the Big 3.

ConocoPhillips ended the quarter with cash, cash equivalents and restricted cash totalling $2.8 billion and short-term investments of $4 billion, equaling $6.8 billion in ending cash and short-term investments.

It is also worth mentioning that ConocoPhillips has recently announced an agreement to acquire Concho Resources in an all-stock transaction for 1.46 shares of ConocoPhillips common stock per share of Concho Resources.

“As we all know, the year has been historically volatile for our industry”, said Ryan Lance, chairman and chief executive officer.

“ConocoPhillips responded with several prudent actions, including economically-driven curtailments, while continuing to run the base business extremely well. In the third quarter, we ended our curtailment program and successfully completed our seasonal turnarounds”.

Lance added: “Now that we’re back to more normal business, we’re focused on continued strong execution of our programs and progressing our announced transaction with Concho Resources”.

Looking ahead, ConocoPhillips’ fourth-quarter 2020 production is expected to be 1,125 to 1,165 MBOED, resulting in full-year 2020 production guidance of 1,115 to 1,125 MBOED.

Operating plan capital for 2020 is expected to be $4.3 billion, excluding approximately $0.5 billion for opportunistic acquisitions completed during the year.