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ConocoPhillips, the largest US exploration and production company, has joined other oil and gas companies in reporting a rebound in profits for the first quarter, but has fallen slightly short of analysts’ expectations.
The company reported an adjusted loss per share of 2 cents for the three months to March, excluding one-off items. That was greatly reduced from the 95 cent loss reported for the first quarter of 2016, but slightly worse than the average of analysts’ forecasts, which was that the company would break even.

Revenues were slightly better than expected at $7.52bn, up 47 per cent from the equivalent period of 2016, thanks to the rebound in oil and gas prices.

Like other US E&P companies, Conoco is stepping up its drilling onshore in the US, adding rigs in the Permian Basin shale region of west Texas and the Eagle Ford of south Texas. It now has 12 active rigs in the “lower 48” states of the contiguous US, up from eight at the end of last year.

Ryan Lance, chief executive, said the company’s operating cash flow was covering its capital spending and its dividend, which was cut last year but increased by 6 per cent in the quarter.

He also highlighted the two large disposals the company has announced in recent weeks: the $13.3bn sale of assets in the Canadian oil sands to Cenovus, and the $2.7bn sale of gasfields in the San Juan Basin of Colorado and New Mexico to Hilcorp.

Mr Lance said: “When these transactions close, proceeds will be used to accelerate our
value proposition by significantly reducing debt, and increasing share
repurchases over the next three years.”

Excluding Conoco’s assets in Libya, which continue to be affected by the conflict in the country, oil and gas production in the first quarter was 1.58m barrels of oil equivalent per day, the same as in the equivalent period of 2016.

The company said recently that without the disposals, its production was on course to average 1.555m boe/d this year. Including the disposals, it is on course for a pro forma rate of 1.16m boe/d.

Conoco shares rose 1.1 per cent in pre-market trading.

Over the past 12 months, the stock has performed roughly in line with those of its larger rivals ExxonMobil and Chevron, which unlike Conoco have refining and chemicals operations that are less exposed to volatility in oil and gas prices.

Over the year, Conoco’s shares are down 1 per cent, while Chevron’s are up 4 per cent but Exxon’s are down 7 per cent.

Copyright The Financial Times Limited 2017. All rights reserved.
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