ConocoPhillips reported a loss of US$3.4 billion for the second quarter of the year, up from US$1.1 billion for Q2 2016, the company said today. However, excluding special items, the oil major was in the black with an adjusted result of US$200,000 - an improvement from an adjusted loss of US$1 billion a year earlier.
The company attributed the result to special items including non-cash impairments on its Australia Pacific LNG project, as well as on divestments in the San Juan Basin and the Barnett shale that were carried out in the reporting period, and together worth US$3.3 billion. During the quarter, Conoco also divested most of its Canadian oil sands operations to Cenovus for US$13.3 billion.
Total proceeds from divestments stood at US$10.7 billion, Conoco noted, with cash from operations at US$1.64 billion. Debt payments totaled US$3.2 billion.
Chief executive Ryan Lance said that the quarter had been good for Conoco, with the company on track to complete its debt reduction plan ahead of schedule. Going forward, further production cost reductions and boosting free cash flow remain top priorities, Lance added.
Despite the negative net result, Conoco said it enjoyed higher realized prices during the reporting period, with the average at US$36.08 per barrel of oil equivalent, up from US$27.79 per boe a year earlier. Besides prices, Conoco also benefited from lower exploration costs, the company said.
For the first half of the year, Conoco booked a loss of US$2.9 billion, and an adjusted profit of US$1 million, meaning the company broke even on a per-share basis. During the six months, Conoco pumped 1.503 million barrels of oil equivalent, excluding Libya, a decline from last year's H1 average of 1.562 million boed. The decline was a result of asset sales, Conoco said, noting that output from new projects increased as did well yields generally.
By Irina Slav for Oilprice.com
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