RPT-WRAPUP 2-Big Oil struggles with costs as results fall flat
By Andrew Callus LONDON, Aug 1 (Reuters) - Some of the western world's top oil companies this week abandoned output targets, missed profit forecasts and promised a tight rein on spending after turning in disappointing quarterly results. Thursday's slew of industry results saw Royal Dutch Shell and Exxon Mobil disappoint market analysts. The pair are two of the industry's top three investor-controlled companies in the world. The third, Chevron, is due to report on Friday. Shell did what several of its peers did some time ago - abandon a promise to increase production growth so that it can meet its financial targets for cash flow growth and spending. The earnings reports follow a profit miss from industry number four BP on Tuesday. Only Total, Europe's No. 3 behind Shell and BP, impressed investors with its first quarterly rise in production in three years. "It's a difficult time for the big integrateds. They are not seeing production growth, refining margins are deteriorating and costs are going up. That's not a good combination," said Brian Youngberg, oil analyst with Edward Jones in St Louis. In contrast, smaller U.S. producers, which tend to have more of their operations in the United States and relatively more exposure to shale deposits, reported surging output. That is largely thanks to the drilling method known as hydraulic fracking that has unlocked oil and gas from shale deposits. SHALE OUTPUT SURGES FOR SMALLER PRODUCERS Among the smaller U.S. firms, ConocoPhillips reported a better-than-expected profit and raised its full-year production forecast. It said its output from the Eagle Ford shale field in Texas almost doubled to 121,000 BOE per day. Conoco's combined oil and gas production in the Eagle Ford shale field, the Bakken shale field in North Dakota, and Permian Basin in Texas rose 47 percent in the second quarter. Apache Corp, which reported a higher quarterly profit that matched Wall Street's expectations, sold its Gulf of Mexico shelf assets last month to focus more on onshore production. It said its North American onshore liquids production rose 42 percent to 175,000 barrels per day in the quarter. "We expect Apache to have an improved asset mix that will drive more predictable production growth and strong returns," Chief Executive Steve Farris said in a statement. Chesapeake Energy Corp's new Chief Executive Doug Lawler said the company was reviewing its partnerships and assets as the second largest U.S. natural gas provider tries to simplify its structure and improve financial discipline. The company, which experienced a severe liquidity crunch in 2012 after spending heavily for years to acquire drilling acreage, reported a better-than-expected quarterly profit as it produced more crude oil than Wall Street targeted. Its shares rose 7 percent to the highest level in more than a year.