(Adds Exxon comments, Shell and BP results)
By Anna Driver and Ernest Scheyder
HOUSTON/NEW YORK May 1 U.S. oil companies Exxon
Mobil Corp and ConocoPhillips both reported
first-quarter earnings that exceeded Wall Street expectations on
Thursday, helped partly by higher natural gas prices.
A brutal winter in North American sapped supplies of natural
gas and boosted prices at key delivery point Henry Hub by more
than 50 percent in the quarter, propping up profit at both
companies, analysts said.
Both Conoco and Exxon have increased investment in North
American shale fields that produce crude oil and natural gas
liquids. On Wednesday, Royal Dutch Shell reported
better-than-expected quarterly results that were also boosted by
Jeff Sheets, chief financial officer of Conoco, said the
company was unlikely to see a similar benefit from natural gas
prices in the current quarter because markets had returned to a
more normal state.
"It was a very unusual quarter because of weather. What you
saw in our results is that we had the ability to supply some of
the markets where prices were higher than supply based on Henry
Hub," Sheets said.
Conoco also said it plans to ship the first of six cargoes
of liquefied natural gas (LNG) from its Kenai plant in Alaska
this month since renewing its export license in April.
The companies appear to have had better luck in U.S. shale
plays than BP PLC, which on Tuesday reported a 24 percent
drop in quarterly profit and wrote off $521 million as it
scrapped a shale project in the Utica basin.
Exxon remains the largest U.S. producer of natural gas and
spent $30 billion in 2010 to acquire gas producer XTO Energy.
Since the XTO deal closed, horizontal drilling and hydraulic
fracturing in shale unlocked vast supplies of natural gas that
had depressed prices until this winter.
"I think that (Exxon's) finally beginning to derive some
benefit from the XTO acquisition even though volumes were
lower," Brian Youngberg, analyst at Edward Jones said, adding
that Conoco also reaped the benefit of higher commodity prices.
Shares of Exxon Mobil fell 96 cents, or 0.9 percent, to
$101.45 in afternoon trading, while Conoco's stock was up 70
cents at $75.01, or nearly 1 percent.
The past winter, which affected much of the country in
January and February, lifted Exxon Mobil's average U.S. natural
gas sale price by 49 percent, helping offset a dip in global
Prices for natural gas rose around the world as well, even
as the price that the Irving, Texas company receives for its
crude oil slipped both in the U.S. and internationally.
Exxon Mobil reported first-quarter net income of $9.10
billion, or $2.10 per share, compared with $9.50 billion, or
$2.12 per share, in the year-ago quarter.
The results surpassed analysts' expectation for profit of
$1.88 per share, according to Thomson Reuters I/B/E/S.
Total production fell about 6 percent to 4.2 million barrels
of oil equivalent per day (boepd).
Conoco's first-quarter profit was flat at $2.1 billion, or
$1.17 per share. Excluding items, the Houston company earned
$1.81 a share, beating analysts' estimates for $1.56 per share,
according to Thomson Reuters I/B/E/S.
Conoco's oil and gas output from continuing operations
excluding Libya edged up to 1.53 million boepd in the three
months through March 31 from a year earlier, in line with
(BreakingViews Column: Benefits of boring )
(Editing by Terry Wade, Bernadette Baum and Marguerita Choy)