Conoco Earnings Down On Weak Prices

US major ConocoPhillips posted a 11.6% decline in quarterly earnings on July 30, as a result of lower oil prices.

The world’s largest independent oil and gas producer recorded adjusted earnings for the second quarter of $1.14bn, down from $1.29bn in the corresponding period of last year. The decline was driven by a 12.3% dip in the average price the company sold its oil: $50.8/b. Over the half year, it said, natural gas liquids and natural gas prices were lower but these were "partially offset by higher bitumen and liquefied natural gas prices." But it did not give such details for Q2 2019 vs 2018.

The price slump more than offset a 6.6% yr/yr climb in ConocoPhillips’ hydrocarbon production to 1.332mn boe/day. This growth was primarily oil-driven, with gas output remaining relatively unchanged at 2.77bn ft³/day.

"Earnings were lower compared with the second quarter of 2018 primarily due to lower realised prices and a lower unrealised gain on our Cenovus Energy equity, partially offset by higher volumes and a financial tax benefit related to the planned UK disposition," the company explained.

Net profits came to $1.58bn, down from $1.64bn in the second quarter of 2019. But ConocoPhillips noted it managed to generate $1.6bn in free cash flow in the period.

“This was our seventh consecutive quarter of generating free cash flow while executing our disciplined plans and delivering on our targets,” ConocoPhillips CEO Ryan Lance said. “Over that time frame we fully funded our capital expenditures, dividends and buybacks within cash from operations.”