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ConocoPhillips (NYSE:COP) posted a huge loss for the third quarter, yet the loss was lower than analysts had expected. And while it cut capex guidance again, the exploration and production major raised its midpoint 2016 production guidance.
ConocoPhillips said its third-quarter net loss came in at US$1.0 billion, down from a net loss of US$1.1 billion for the same period last year. Excluding special items, the Houston-based company’s adjusted net loss stood at US$0.66 per share, higher than the US$0.38-per-share loss for the second quarter of 2015.
A Zacks Consensus Estimate had expected the company to report a third-quarter adjusted net loss of US$0.69 loss per share.
ConocoPhillips continued to cut costs, and its adjusted operating costs dropped by 18 percent annually to US$1.654 billion in the third quarter. The full-year guidance for adjusted operating costs was lowered to US$6.6 billion from the previous guidance of US$6.8 billion.
The company also reduced its capital expenditure guidance to US$5.2 billion from US$5.5 billion, as it seeks efficiencies and shifts capital from major projects to Lower 48 unconventionals. ConocoPhillips has been consistently lowering capex guidance this year, from US$6.4 billion to US$5.7 billion in April, and from US$5.7 billion to US$5.5 billion in July, in a sign that oil prices are not high enough to justify more investment.
Regarding cash generation, ConocoPhillips said that it generated US$1.2 billion in cash from operations in July to September.
“In the third quarter we achieved cash flow neutrality, with operating cash flow covering capital expenditures and the dividend,” chairman and CEO Ryan Lance said in the company’s earnings release.
ConocoPhillips has been aiming to reduce its breakeven price, improve its balance sheet, and position itself to generate free cash flow, Lance noted.
On the production side, the company increased the midpoint of its 2016 production guidance, excluding Libya, to 1.565 million barrels of oil equivalent per day, on the back of “strong year-to-date performance across Lower 48, Europe and Asia Pacific”.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.