ConocoPhillips Narrows Q4 Loss

ConocoPhillips on Feb. 2 released its fourth-quarter 2016 earnings report.

The company significantly narrowed its loss to $35 million, or $0.03 per share, compared with a fourth-quarter 2015 loss of $3.5 billion, or $2.78 per share.

Its adjusted earnings, excluding special items, were a loss of $318 million, or $0.26 per share, versus an adjusted loss of $1.1 billion, or $0.90 per share a year ago.

Special items were primarily driven by gains on a sale in Senegal and a Minnesota iron ore reversionary interest, as well as net benefits from non-cash impairments, the company said in an emailed statement to Asia Energy Central.

On a full-year basis, earnings were a loss of $3.6 billion, or $2.91 per share, versus a full-year 2015 loss of $4.4 billion, or $3.5 per share.

Excluding special items, full-year adjusted earnings were a loss of $3.3 billion, or $2.66 per share, versus an adjusted loss of $1.7 billion, or $1.40 per share, a year ago.

Oil Production

Production, excluding Libya, for the quarter was 1,587 thousand barrels of oil equivalent per day (MBOED), a decrease of 12 MBOED compared with the same period a year ago.

The company said that the decrease was the result of normal field decline and dispositions, partly offset by new production from major projects and development programs, improved well performance, and lower downtime.

Excluding the impact from dispositions of 70 MBOED and reduced downtime of 13 MBOED, production rose 45 MBOED, or 3 percent, ConocoPhillips said in the statement.

The company said that first oil was achieved at Malikai in Malaysia and at the Bohai wellhead platform J in China.

For the quarter, cash provided by operating activities was $1.44 billion. Excluding a $0.31 billion change in operating working capital, the company generated $1.75 billion in cash from operations.

In addition, ConocoPhillips received proceeds from asset dispositions of $0.9 billion, funded $1.0 billion in capital expenditures and investments, repaid debt of $1.4 billion, paid dividends of $0.3 billion, and repurchased company common stock for $0.1 billion.

Full-Year 2016 Production

For full-year 2016, production, excluding Libya, was 1,567 MBOED, compared with 1,589 MBOED for the same period in 2015.

The company said that production decreased due to normal field decline and dispositions, partly offset by new production from major projects and development programs, improved well performance, and lower downtime.

Excluding the impact from dispositions of 72 MBOED and reduced downtime of 6 MBOED, production jumped 44 MBOED, or 3 percent.

Outlook

For full-year 2017, ConocoPhillips expects its oil production to be in a range of 1,540 to 1,570 MBOED. This results in flat to 2 percent growth compared with full-year 2016 production of 1,540 MBOED (excluding Libya,) when adjusted for 2016 dispositions of 27 MBOED.

For first-quarter 2017, production is expected to be 1,540 to 1,580 MBOED, the company said.

Production guidance for thus year excludes Libya and the impact of future dispositions.

Guidance for production and operating expenses is $6.1 billion, which results in adjusted operating cost guidance of $6.0 billion.

“Our recent performance highlights the significant changes we’ve made as a company to respond to a world of lower and more volatile commodity prices,” Chairman and CEO Ryan Lance said in a statement.

“For the second quarter in a row our cash from operating activities exceeded capital expenditures and dividends paid. Our capital intensity and cost structure are dramatically lower, we’ve increased our dividend, and our debt reduction and share buyback programs are underway. We are delivering our operational milestones and our 18 BBOE of resources with an average cost of supply less than $40 per barrel Brent represents a deep source of high-return future investments. Our disciplined, returns-focused value proposition will enable us to deliver predictable performance to shareholders through the cycles.”

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