ConocoPhillips Reports High Profits
|
|
|
|
Thursday, 24 July 2008 |
|
ConocoPhillips is the first US major oil company to report second-quarter earnings. A number of other major oil companies that include Exxon Mobil Corp. and
Chevron Corp., are scheduled to report results next week.
The one-time charge in the year-ago quarter was linked to ConocoPhillips' refusal to sign deals last spring with the Venezuelan government to keep pumping oil under tougher terms posed by President Hugo Chavez's government. Excluding that impairment, earnings from the most-recent quarter topped those of a year ago by about 13 percent, driven by profits from its exploration and production arm.
As expected, however, spiking crude prices in the second quarter were a drain on earnings at ConocoPhillips' refining and marketing operations. The company said net income from its E&P sector amounted to $4 billion, about 85 percent higher than adjusted earnings from a year ago. Far higher prices for crude and natural gas lifted results, which were somewhat offset by higher production taxes, lower volumes and increased operating costs.
Oil prices have retreated in recent trading sessions to below $130 after climbing above $147 a barrel earlier this month. Still, prices remain about 70 percent above where they were a year ago and up about 35 percent from the start of the year.
ConocoPhillips' daily production in the most-recent quarter averaged 1.75 million barrels of oil equivalent a day, down from 1.91 million barrels a year ago. The company attributed the decline to the expropriation of its Venezuelan oil projects last year and normal field decline.
Earnings fell sharply on the refining and marketing side, to $664 million from $2.36 billion a year ago -- a decline ConocoPhillips said earlier this month was not unexpected. The problem was refining margin, which was squeezed by higher crude prices. Those margins reflect the difference between the cost of crude and what the company makes on refined fuel products.
The company said it generated $5.4 billion of cash from operations in the quarter, which enabled it to repurchase $2.5 billion shares of its own stock -- part of a plan to repurchase $10 billion worth of shares for all of 2008. It also paid $700 million in dividends. Net income for the first six months of 2008 was $9.6 billion, or $6.11 a share, versus $3.85 billion, or $2.31 a share, a year ago, including the Venezuelan charge. Revenue rose to $126.3 billion from $88.7 billion.
PetrolWorld 230708
|
