Phillips reports 37% boost in operating income in second quarter

Phillips Petroleum Co. Thursday reported second-quarter net operating income, excluding special items, of $601 million, up 37% from $439 million for the same period a year ago. Total revenues were $5 billion, versus $5.4 billion a year ago.


By the OGJ Online Staff

HOUSTON, July 26 -- Phillips Petroleum Co. Thursday reported second-quarter net operating income, excluding special items, of $601 million, up 37% from $439 million for the same period a year ago.

Total revenues were $5 billion, versus $5.4 billion a year ago. Net income was $618 million, compared with $442 million a year ago, but was increased by special items totaling $17 million.

CEO Jim Mulva said, "We had a solid quarter. Our exploration and production operations were good, and our refining, marketing, and transportation segment turned in a very strong quarter. Compared with a year ago, our earnings were up due to increased crude oil production, higher US natural gas prices, and significantly improved refining, marketing."

Phillips had daily production of 823,000 boe/d, up 21% from the same quarter last year. The increase was primarily due to higher crude oil production in Alaska, as the company acquired properties and Alpine field began production. Overall, US crude production was up 61%, while non-US output was up 2%, primarily due to increased output in Norway and Nigeria.

"Our gas gathering, processing, and marketing segment results were up from the same period last year, primarily due to lower operating costs. Natural gas liquids prices were slightly higher than a year ago, but declined from average prices in the first quarter."

Mulva said Phillips refineries ran at 99% of capacity. "We continue to see the benefits from processing lower-cost crudes as a result of the new coker at our Sweeny, Tex., refinery." The plant has 205,000 b/d of capacity.

Phillips' second-quarter average worldwide crude sales price was $25.83/bbl, down from $26.96 in the same period a year ago. The company's Lower 48 and foreign natural gas prices averaged $3.91/Mcf and $2.48/Mcf, respectively, compared with $2.99 and $2.48 in the second quarter of 2000.

Worldwide crude oil production was up 34 percent from the same period a year ago, reflecting higher production in Alaska and continued strong operations in Norway and Nigeria. Natural gas production declined 2%.

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