* Q3 EPS ex-items $2.52 vs Street view $2.18
* Shares up 1 percent
* Q3 output falls 10 pct
* No estimate for Bohai restart
By Anna Driver
Oct 26 (Reuters) - ConocoPhillips , the third-largest U.S. oil company, reported a much higher-than-expected quarterly profit on strength in its refining business, sending its shares up 1 percent.
Conoco’s refining margins benefited from the ability to process cheaper U.S. crude oil priced against the oversupplied Cushing, Oklahoma, delivery point.
“I would say about 90 percent of the upside was because of their downstream,” said Oppenheimer analyst Fadel Gheit. “They ran their refineries well.”
Conoco was already in the midst of a massive effort to shed up to $20 billion in assets it no longer considered critical to its business when it announced plans to spin off its refining business in July.
The split, which is aimed at increasing the valuations of both companies, will be accompanied by big share repurchases and higher dividends.
Conoco reported on Wednesday a third-quarter profit of $2.6 billion, or $1.91 per share, compared with $3.1 billion, or $2.05 per share, a year earlier.
Excluding special items, the Houston company posted a profit of $2.52 per share, topping the Wall Street estimate of $2.18.
Refining and marketing earnings nearly tripled from a year earlier to $789 million, helped by higher margins.
Conoco said higher taxes and losses on asset sales hurt results.
Conoco’s oil and natural gas production fell 10 percent to 1.54 million barrels oil equivalent (boe) per day, hurt by asset sales and a loss of output from Libya and from China’s Bohai Bay.
China’s marine authority in early September ordered a subsidiary of Conoco to halt all operations at an oilfield in the northern Bohai Bay after it said the company had failed to seal oil leaks that began in June.
On Tuesday, CNOOC said sources of oil spills had been sealed at the oilfield, a according to Xinhua news agency.
In the third quarter, the shutdown at Bohai cost Conoco 32,000 barrels of oil per day and the company has no estimate when the output will be restored, Jeff Sheets, Conoco’s chief executive officer, told investors on a conference call..
In Libya, Sheets said the company was in the earliest stages of assessing their interests in that country, with security being a top concern, following the turmoil there that eventually caused the ouster of Muammar Gaddafi’s regime.
“We don’t know the condition of our facilities,” Sheets said in a interview.
Shares of Conoco rose 1.2 percent to $71.56 in afternoon New York Stock Exchange trading.