ConocoPhillips posts $1-billion loss, further cuts capex

ConocoPhillips reported a third-quarter net loss of $1 billion, slightly down from a third-quarter 2015 net loss of $1.1 billion. The firm plans to reduce its capital expenditures for the year to $5.2 billion from $5.5 billion.

Excluding special items, adjusted earnings for this year’s third quarter were a net loss of $800 million compared with a third-quarter 2015 adjusted net loss of $500 million.

Special items for the quarter included a tax functional currency change at Australia Pacific LNG (APLNG), restructuring costs across the portfolio, the termination of the contract for the for Maersk Valiant drillship, and a deferred tax benefit from a change in UK tax law (OGJ Online, Aug. 2, 2016).

The firm also repaid $1.25 billion of maturing debt in October.

ConocoPhillips’s 9-month 2016 earnings were a net loss of $3.6 billion compared with a 9-month 2015 net loss of $1 billion. Nine-month 2016 adjusted earnings were a net loss of $3 billion compared with a 9-month 2015 adjusted net loss of $600 million.

Companywide production during the third quarter was 1.557 million boe/d, an increase of 3,000 boe/d from the same period a year ago. The increase was the result of growth from major projects and development programs, improved well performance, and lower planned downtime, partly offset by normal field decline and dispositions, the firm says.

Activity during the quarter included full recovery of the Surmont oil sands facility in the Athabasca region of Alberta from wildfire impacts. It continues to ramp up with gross production exceeding 100,000 boe/d in mid-October. Production launched from APLNG Train 2, and work continued the North Sea’s Alder high-pressure and high-temperature gas condensate field, which is expected to start up in the fourth quarter.

Production for the first 9 months of 2016 was 1.56 million boe/d, compared with 1.586 boe/d for the same period in 2015. Production decreased due to normal field decline and dispositions, partly offset by new production from major projects and development programs as well as improved well performance, the firm says.

The company increased the midpoint of full-year 2016 production guidance to 1.565 million boe/d, reflecting a range of 1,560-1,570 million boe/d on strong year-to-date performance across Lower 48, Europe, and Asia Pacific. Fourth-quarter 2016 production guidance is 1,555-1,595 million boe/d. The guidance excludes Libya.

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