By Anna Driver
Jan 30 ConocoPhillips, the largest U.S.
oil company without refining operations, said on Thursday its
fourth-quarter profit rose more than expected, helped by the
sale of its Algerian business and production of more North
American crude oil.
Conoco, which shed its refining business in 2012, has sold
billions of dollars of lower-yielding assets to focus on more
profitable oil production from North American shale basins, like
the Eagle Ford in south Texas.
Now that strategy is beginning to pay off, analysts said.
In a note to clients, Ed Westlake of Credit Suisse dubbed
Conoco the best performing large oil company, citing 7 percent
growth in cash flow despite asset sales, a reduced share count
and more cash on the balance sheet.
Profit in the quarter was $2.5 billion, or $2.00 per share,
compared with $1.4 billion, or $1.16 per share, a year earlier.
Excluding items, Houston-based Conoco had a profit of $1.40
per share. Analysts on average had expected a profit of $1.31
per share, according to Thomson Reuters I/B/E/S.
Analysts characterized Conoco's reserve replacement ratio, a
measure of a company's ability to find new oil and gas reserves
to replace what is produced, as strong.
Shares of Conoco were down 0.3 percent at $65.62 in morning
trading on the New York Stock Exchange.
Separately, shares of Exxon Mobil Corp the world's
largest publicly traded oil company by market value, fell after
it posted lower-than-expected quarterly profit due to declining
Better-than-expected results from Conoco's operations in
Alaska, Canada and Europe helped boost profits, according to
analysts at energy-focused investment bank Simmons & Co.
Oil and gas output by Conoco was 1.518 million barrels oil
equivalent per day, down from 1.607 million boepd in the 2012
Earlier this month, Conoco said its fourth-quarter
production from continuing operations would be lower than
expected as severe weather in parts of the United States and the
North Sea hampered operations. Fourth quarter production from
continuing operations was 1.473 million boepd.
In the current quarter, the company forecast oil and gas
output from continuing operations of 1.490 million to 1.530
On a preliminary basis, Conoco's proved reserves rose 3
percent from a year ago to 8.9 billion barrels of oil equivalent
(BOE). Proved organic reserve additions are expected to be
approximately 1.1 billion BOE for a replacement ratio of 179
percent of 2013 production.