Sale of Nigerian Unit lifts ConocoPhillips Q3 profit

31 October 2014, Lagos – ConocoPhillips, the largest United States independent oil and gas company yesterday reported higher third-quarter profit from the sale of its Nigerian unit but lowered its fourth-quarter production outlook.

Over the last several years, Conoco had shed lower-margin assets, directing more capital to projects like shale drilling in the United States that offered higher returns and higher production growth.

ConocoPhillips-logoReuters quoted analysts at energy-focused investment bank Simmons & Company to have said it was important for Conoco, which shed its refining operations in 2012, to meet its targets.

Conoco has executed very well since spinning off into a pure-play exploration and production (company) and the cut to fourth-quarter production doesn’t change this narrative,” the analysts wrote in a note to clients.

“However, this is an execution story, and for the stock to work, there must be confidence in Conoco’s ability to achieve and potentially outperform its growth targets.”

Its profit rose to $2.7 billion, or $2.17 per share, from $2.5 billion, or $2.00 per share, in the 2013 third quarter.

Excluding items such as the proceeds from the sale of its Nigerian business in July and a tax benefit, Conoco had a profit of $1.29 per share. The proceeds from the Nigerian sale were $1.4 billion.

Even as crude prices have fallen more than 20 per cent in recent weeks on increased supply and waning demand, Conoco’s chief executive officer expressed optimism about next year.

“We expect strong growth in 2015 driven by ongoing success in the North American unconventional and startup of several major projects, including Surmont 2 and APLNG”,its CEO, Ryan Lance said in statement.

Surmont is an oil sands project in Canada and APLNG is a liquefied natural gas project in Australia. Unconventional drilling refers to shale drilling.

ConocoPhillips had third-quarter oil and gas production from continuing operations, excluding Libya, of 1.473 million barrels oil equivalent per day (boed), up 25,000 boed from a year ago.

For the fourth quarter, Conoco forecast production from continuing operations rising to 1.545 million boed to 1.575 million boed, excluding Libya. Previously, it said it would produce as much as 1.590 million boed to 1.640 million boed.


– This Day

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