Lower oil, gas prices slice ConocoPhillips's earnings

By OGJ editors
HOUSTON, Apr. 23 -- Despite a decline in costs from a year earlier, ConocoPhillips reported a steep drop in earnings for the first 3 months of 2009 as a result of lower oil and gas prices.

The company's quarterly earnings fell to $840 million, down from $4.139 billion in the first quarter of 2008.

Revenues were $30.7 billion vs. $54.9 billion a year earlier. Costs and expenses fell to $29.2 billion from $49 billion.

ConocoPhillips's exploration and production segment reported first-quarter earnings of $700 million, compared with $2.887 billion in first quarter 2008. This decline was primarily due to much lower commodity prices, partially offset by lower production taxes, higher volumes, and lower operating costs, the company reported.

The company's averaged realized price for crude and condensate was $41.56/bbl in the recent quarter, down from $92.88/bbl in the first quarter of last year.

Meanwhile, ConocoPhillips's realized price for natural gas declined to average $4.93/Mcf in the first quarter from $8.03/Mcf a year earlier. For natural gas liquids, the company's realized price averaged $27.53/bbl compared to $60.14/bbl in first quarter 2008.

Averaging 1.93 million boe/d, first quarter 2009 production increased 131,000 boe/d compared with first quarter 2008 due to new developments in the UK, Russia, Norway, Vietnam, China, and Canada, which more than offset field decline impacts. Production also increased due to less unplanned downtime and the impact of production-sharing contracts, ConocoPhillips reported.

The company announced that its refining and marketing segment earnings declined to $205 million from $520 million a year earlier, primarily due to lower refining volumes related to increased turnaround activity in the US as well as a first-quarter 2008 net benefit from asset rationalization efforts.

ConocoPhillips's Lukoil investment segment had earnings of $48 million in the first quarter, compared with earnings of $710 million a year earlier. Its chemicals segment, meanwhile, reported first-quarter earnings of $23 million, down from $52 million in first quarter 2008. This decrease was mostly due to lower margins, partially offset by lower operating costs.

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