ConocoPhillips reported fourth-quarter 2018 earnings of $1.9 billion compared with fourth-quarter 2017 earnings of $1.6 billion. Excluding special items, fourth-quarter 2018 adjusted earnings were $1.3 billion compared with fourth-quarter 2017 adjusted earnings of $500 million.
Special items for the most recent quarter included a gain from the sale of a partial interest in UK Clair field, deferred tax adjustments, and amounts recognized from the PDVSA International Chamber of Commerce (ICC) settlement, partially offset by unrealized losses on Cenovus Energy equity.
Full-year 2018 earnings were $6.3 billion compared with a full-year 2017 net loss of $900 million. Excluding special items, full-year 2018 adjusted earnings were $5.3 billion compared with full-year 2017 adjusted earnings of $700 million.
Production for the fourth quarter, excluding Libya, was 1.31 million boe/d, an increase of 94,000 boe/d compared with the same period a year ago. The increase was primarily due to growth from the Big 3 unconventionals, development programs primarily in Europe and Alaska, and production from major project startups, which more than offset normal field decline. Production achieved the high end of guidance largely due to partner-operated production in Lower 48 and resumption of gas exports at the Kebabangan (KBB) field in Malaysia. Production from Libya was 44,000 boe/d.
For the quarter, cash provided by operating activities was $3.8 billion. Excluding a $600 million change in operating working capital, ConocoPhillips generated $3.2 billion in CFO. CFO included some $300 million from APLNG distributions and $100 million from the PDVSA ICC settlement. In addition, the company generated $700,000 million in disposition proceeds largely related to customary adjustments from the UK Clair Field and Alaska Greater Kuparuk Area transactions, as well as from the sale of Barnett and other non-core assets in Lower 48. The company also incurred $1.6 billion in capital expenditures and investments, $900 million for share repurchases and $400 million for dividends.
Guidance for 2019 capital expenditures is $6.1 billion. First-quarter 2019 production is expected to be 1.29-1.33 million boe/d, reflecting the impacts of a planned turnaround in Qatar of some 15,000 boe/d and government-mandated production curtailment in Canada of about 10,000 boe/d. Production is expected to ramp-up in year’s second half, with full-year 2019 production guidance unchanged from the previously reported 1.3-1.35 million boe/d, excluding Libya.
Guidance for 2019 production and operating expenses is $5.4 billion, which results in adjusted operating cost guidance of $6.1 billion; corporate segment net expense is $900,000 million or $1 billion adjusted corporate segment net expense; depreciation, depletion and amortization is $6.3 billion; and exploration dry hole and leasehold impairment expense is $200 million.
