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ConocoPhillips reported better than expected third quarter earnings before the market opened Thursday. Houston based $COP is the largest U.S. based independent exploration and production firm based on production volumes. 


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ConocoPhillips Q3 Earnings

Conoco Phillips Inc. (NYSE: $COP) Reported Earnings Before Open Tuesday

$0.82 Beat $0.78 EPS Forecast And $7.76 Billion Missed $7.92 Bil Revenue Forecast

Earnings

ConocoPhillips (COP) on Tuesday reported third-quarter earnings of $3.06 billion, On a per-share basis net income was $2.74. Earnings, adjusted for non-recurring gains,was 82 cents per share. The results beat Wall Street expectations average estimate of four analysts of 78 cents per share. Revenue was $7.76 billion in the period.

ConocoPhillips NYSE: $COP

Market Reaction $57.89  +2.21 (+3.97%)

Highlights

"This business is all about having a sustainable strategy with consistent execution. We believe ConocoPhillips offers both - a shareholder-friendly, returns-oriented value proposition and strong delivery on our commitments," said CEO Ryan Lance.

Production

ConocoPhillips eported that total production, excluding Libya, rose 98,000 barrels per day to 1.322 million barrels per day thanks in part to increased production at the Eagle Ford, Bakken and Permian basins.

Guidance

For the fourth quarter, the company expects production to range between 1,265 million barrels and 1,305 million barrels per day.

What Analysts Will Be Watching

ConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, LNG, and natural gas liquids (NGLs) worldwide.

  • ConocoPhillips production of oil equivalent per day (BOE/D)  to BOE/D guidance range. 
  • Seasonal maintenance activities.
  • Update on third-party gas pipeline issue in Malaysia
  • $COP's share repurchase program. Conoco Phillips this year announced a 50% increase in this year's share buyback plan to $3 billion. The company also reported it reduced debt by $2.1 billion during Q2 and has already reached its 2019 year-end debt target of $15 billion.
  • ConocoPhillips capital budget, look for changes in CapEx.

ConocoPhillips' big three shale plays, Bakken, Eagle Ford, and Permian Basin are its key growth drivers in 2018, delivering 20% production growth versus last year. Haliburton in their earnings report warned that pipeline constraints in the Permian have had producers rethinking their plans.

ConocoPhillips has in the past hinted that it might reduce its drilling activities in the Permian due to the pipeline issues. CEO Ryan Lance said last month he is "not sure it makes sense to drill into that headwind."  Will $COP reallocate capital away from the Permian and toward the Bakken and Eagle Ford.

Conoco’s portfolio includes resource-rich North American tight oil and oil sands assets; lower-risk legacy assets in North America, Europe, Asia and Australia; various international developments; and an inventory of conventional and unconventional exploration prospects. $COP has reloaded portfolio depth in the Bakken and Eagle Ford, and with visibility on future growth from a sizable position in the Permian.

About ConocoPhillips

ConocoPhillips explores for, produces, transports and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG) and NGLs worldwide. Conoco’s portfolio includes resource rich North American tight oil and oil sands assets; lower-risk legacy assets in North America, Europe, Asia and Australia; various international developments; and an inventory of conventional and unconventional exploration prospects.

Source: ConocoPhillips

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