Conoco Gains on US Tax, Ecuador
US major ConocoPhillips made a Q4 2017 profit of $1.6bn, compared with a net loss of $35mn in the same period of 2016, it said February 2. Excluding special items, adjusted earnings were $500mn, compared with a loss of $300mn. Special items were primarily driven by benefits from US tax reform ($9o0mn) and the settlement of Ecuador arbitration ($337mn).
Full-year earnings were a net loss of $900mn, a quarter of the $3.6bn lost the year before. Preliminary 2017 year-end proved reserves are 5bn barrels of oil equivalent (boe), with a total reserve replacement ratio – excluding the effects of $16bn of disposals – expected to be 200%, on which basis production grew 3%.
“2017 was a very successful year by all measures,” said CEO Ryan Lance. “We accelerated our disciplined, returns-focused value proposition and delivered on our strategic priorities. We transformed our portfolio, strengthened our balance sheet, returned 61% of cash flow from operations to shareholders through our dividend and buyback program, and achieved our operational milestones, including 200% organic reserve replacement.
In Alaska, first production was achieved from its Northeast West Sak oil project in Alaska and additional oil wells were brought online at CD-5 on Alaska's North Slope. In Lower 48, the company acquired additional early life-cycle unconventional acreage to support future development. In Canada, record production levels were achieved at Surmont and exploration drilling progressed in the Montney. In Norway, the first well was spud at Aasta Hansteen and in Malaysia the final well was spud for the initial Malikai drilling campaign.
The company’s average sales price during 2017 was $39.19/boe, compared with $28.35/boe in 2016.
Full-year 2018 production is expected to be 1.2 to 1.235mn boe/d. This results in about 5% percent growth compared with full-year 2017 underlying production, which excludes disposals of 191,000 boe/d. First-quarter 2018 production is expected to be 1.180-1.220 mn boe/d, excluding Libya.
Guidance for 2018 production and operating expenses and 2018 adjusted operating cost is $5.7bn. The company’s 2018 guidance for capital expenditures is $5.5bn