ConocoPhillips shares down as much as 2.4 per cent in early trading
ConocoPhillips reported a surprising first quarter loss on Tuesday due to higher-than-expected operating costs. Analysts say Q1 results from the largest US independent oil producer reflect slow but steady improvement seen across the industry.
The Houston-based company says its total realized price was $36.18/barrel of oil equivalent in the first quarter, compared to $22.94 one year ago.
Excluding operations in Libya, ConocoPhillips’ production was up by 2 per cent to 1.584 million barrels of oil equivalent per day (boe/d) during the first three months of 2017, beating Wall Street expectations.
“Production was above guidance, but this was outweighed by higher costs,” Raymond James analyst Pavel Molchanov told Reuters.
While production topped analysts’ expectations, so too did operating expenses.
According to Reuters, Raymond James expected ConocoPhillips operating expenses to amount to $1.24 billion, however, the company reported operating expenses of $1.30 billion.
In Q2, Conoco expects production between 1.495 and 1.535 million boe/d. The forecast excludes Libyan output and does not reflect recently announced asset sales, including the $3 billion sale of its gas-heavy assets in San Juan basin.
As well, the company is selling its Canadian oilsands and natural gas assets to Cenovus for $17.7 billion.
According to Reuters, Conoco is also looking to sell its gas-weighted assets in the Anadarko basin, the Barnett shale field and the Gulf of Mexico.
In the first quarter, net profit amounted to $800 million, or 62 cents per share, up from a net loss of $1.5 billion or $1.18 per share this time last year.
Excluding a gain on the sale of Canadian assets, Conoco posted a loss of 2 cents per share. On average, analysts were anticipating a profit of 1 cent per share, according to Thomson Reuters.
In morning trading on Tuesday, ConocoPhillips’ shares were down 1.5 per cent to $46.75.
