ConocoPhillips reported third-quarter earnings of $1.9 billion compared with third-quarter 2017 earnings of $400 million. Excluding special items, third-quarter adjusted earnings were $1.6 billion compared with third-quarter 2017 adjusted earnings of $200 million. Special items for the current quarter were primarily for amounts recognized from the Petroleos de Venezuela SA (PDVSA) arbitration settlement, partially offset by unrealized losses on Cenovus Energy Inc. equity (OGJ Online, Aug. 21, 2018).
Cash provided by operating activities was $3.4 billion. Excluding working capital, cash from operations of $3.5 billion exceeded capital expenditures, dividends, and share repurchases by $600 million.
Third-quarter
Production excluding Libya for the third quarter was 1.224 million boe/d, an increase of 22,000 boe/d compared with the same period a year ago. The third-quarter volume impact from closed dispositions was 50,000 boe/d in 2017. Excluding this impact, underlying production increased 6%. The increase was primarily due to growth from the Eagle Ford, Bakken, and Delaware unconventional areas; development programs in Europe and Alaska; and ramp-up of major projects in Asia Pacific. These more than offset normal field decline. Production from Libya was 37,000 boe/d.
In the US Lower 48, production from the company’s Eagle Ford, Bakken, and Delaware unconventional areas increased to 313,000 boe/d, reflecting a 48% increase year-over-year. Production from these three unconventional areas in the third quarter of 2017 was impacted by 15,000 boe/d from Hurricane Harvey. Excluding this impact, growth was 38% year-over-year and production from the three areas is expected to rise more than 35% for the full year.
During the quarter, the company started production at Bohai Phase 3 and from the final phase of drilling at Bayu-Undan. In Alaska, production started from GMT-1 in October. The company also sanctioned GMT-2 (OGJ Online, Oct. 19, 2018). Major turnarounds were completed in the Western North Slope and Prudhoe Bay in Alaska, as well as in China and Malaysia. In Europe, production was impacted by an unplanned outage at a third-party plant that processes gas from the East Irish Sea in the UK. Production from the East Irish Sea is expected to resume in the fourth quarter.
Outlook
Fourth-quarter 2018 production is expected to be 1.275-1.315 million boe/d, reflecting the completion of seasonal turnarounds, growth from several conventional project startups, and ongoing development in the unconventional areas. This guidance includes impacts expected from the previously announced Barnett disposition and excludes Libya (OGJ Online, Aug. 2, 2018).
The company adjusted its 2018 capital guidance to $6.1 billion vs. prior guidance of $6 billion, reflecting higher partner-operated spending. This guidance excludes the previously announced $400-million bolt-on acquisition in the Alaska Western North Slope and $100 million to acquire additional acreage in the Montney in Canada. Full-year guidance for depreciation, depletion, and amortization expense was updated to $6 billion from $5.9 billion. The company’s other guidance items are unchanged.
