ConocoPhillips profit slightly higher; output rises
(Reuters) - ConocoPhillips (COP.N), the largest U.S. independent oil and gas company, on Thursday reported a quarterly profit that just beat Wall Street expectations, helped by a bigger-than-expected increase in oil and gas production.
ConocoPhillips, like many other oil and gas companies, is drilling more in U.S. shale fields where wells bring better profits and steady production growth is easier to achieve.
For example Conoco's production in the Eagle Ford Shale in South Texas and the Bakken Shale in North Dakota rose 38 percent in the second quarter.
Income totaled $2.08 billion, or $1.67 per share, compared with $2.05 billion, or $1.65 per share in the year-ago period.
Excluding one-time items, Conoco's profit was $1.61 per share. Analysts, on average, expected $1.60, according to Thomson Reuters I/B/E/S.
"Conoco posted a clean operational beat with higher production and in-line margin performance," Wells Fargo analyst Roger Read said in a note to clients. "In spite of the beat, we take a neutral stance, as natural gas drove the out-performance."
The Houston company's oil and natural gas output from continuing operations was 1.56 million barrels oil equivalent per day (boed) in the quarter, up from 1.51 million boed a year earlier.
On a conference call with analysts, the company said it had put its 50 percent interest in Rosneft's (ROSN.MM) Polar Lights project on the market.
So far U.S. sanctions have not affected that process, Chief Financial Officer Jeff Sheets said in an interview.
"Once we made the decision to exit the joint venture we had with Lukoil, it doesn't make sense for us to have this really small asset in Russia," said Sheets.
Conoco completed the sale of its 20 percent stake in Russian oil company Lukoil in 2011. Polar Lights produces only about 3,000 to 4,000 barrels per day for Conoco, Sheets said.
While production was forecast to be lower in the third quarter due to maintenance, Conoco said it was raising the midpoint of its full-year production outlook for continuing operations. It now expects output of about 1.525 million boed to 1.550 million boed.
Shares of Conoco closed down $2.13, or 2.5 percent at $82.50 on the New York Stock Exchange.
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