Conoco Profit Grows with Prices, Output
US major ConocoPhillips reported Q2 2018 earnings of $1.6bn, compared with a loss of $3.4bn in Q2 2017. Adjusted for special items, the figure was $1.3bn, up from Q2 17's $0.2bn, it said July 26.
Last year's figures suffered from non-cash impairments, at APLNG in Australia among others, while the oil price was the main reason for the higher adjusted profit this year. As with other majors, the cash is going on repaying debt, buying back shares and developing low-cost reserves.
Output excluding Libya was 1.211mn barrels of oil equivalent/day, the high end of guidance; year-on-year underlying production excluding the impact of closed disposals grew 5%; or by 34% on a production per debt-adjusted share basis.
Year-over-year production from the Lower 48 Big Three – Eagle Ford, Bakken and Delaware basin – unconventional plays grew by 37%, with the Big 3 growing by 37%, significantly ahead of schedule.
CEO Ryan Lance said the company could now deliver "top-tier performance through cycles by focusing on free cash flow generation and following clear priorities to maximise returns.” The company was also profiting from its low-cost resource base. He said: "Since we launched our disciplined strategy almost two years ago, we’ve met or exceeded all our key strategic milestones. We achieved our debt target 18 months ahead of plan, we’ve outperformed on our target payout to shareholders, we’re executing our operating plan and remain committed to our disciplined approach to the business.”
In Canada, the company is continuing to implement its alternative diluent program at Surmont and progressing its 14-well pad in the Montney. In Europe, Aasta Hansteen offshore Norway and Clair Ridge offshore UK West of Shetland are both on track to deliver first production by the end of the year. Turnarounds were safely and successfully executed at Darwin LNG and Bayu Undan in Australia, as well as in the UK and Norway. Additional turnarounds and maintenance activity will continue in the third quarter.
The company’s average sales price over the quarter was $54.32/boe, compared with $36.08/boe in the second quarter of 2017, reflecting stronger marker prices and a more liquids-weighted portfolio.