ConocoPhillips, Houston, has first-quarter 2021 earnings of $1.0 billion, compared with a first-quarter 2020 loss of $1.7 billion. Excluding special items, first-quarter 2021 adjusted earnings were $900,000 million, compared with first-quarter 2020 adjusted earnings of $500,000 million.
Special items for the current quarter included an unrealized gain on Cenovus Energy shares and a gain associated with the Australia-West divestiture following Santos Ltd.’s final investment decision on Barossa development in the Timor Sea (OGJ Online, May 28, 2020; Mar. 30, 2021).
Partially offsetting the benefits were transaction and restructuring expenses related to the acquisition of Concho and realized losses on the Concho hedging program related to positions for which the company accelerated settlement into the first quarter, in addition to deferred tax adjustments.
Cash provided by operating activities (CFO) and cash from operations of $2.1 billion exceeded capital expenditures and investments of $1.2 billion, generating free cash flow (FCF) of $900,000 million. CFO and FCF include about $1.0 billion of cash outflows from one-time items in connection with the Concho acquisition.
Production excluding Libya for first-quarter 2021 was 1.488 MMboe/d, an increase of 210,000 boe/d from the same period a year ago. After adjusting for closed acquisitions and dispositions, first-quarter 2021 production decreased 59,000 boe/d or 4% from the same period a year ago. This decrease was primarily due to normal field decline and production impacts from Winter Storm Uri, partially offset by new production from the Lower 48 and other development programs across the portfolio. Production from Libya averaged 39,000 boe/d.
In the Lower 48, production averaged 715,000 boe/d, including 405,000 boe/d from the Permian basin, 187,000 boe/d from the Eagle Ford, and 86,000 boe/d from the Bakken. Weather-related impacts totaled 50,000 boe/d throughout the Lower 48 with production fully restored in March.
Outlook
Second-quarter 2021 production excluding Libya is expected to be 1.50-1.54 MMboe/d, reflecting the impact of seasonal turnarounds planned in Europe and the Asia Pacific region.
ConocoPhillips owns about 10% of Cenovus Energy common shares, acquired as partial consideration in the 2017 disposition of the company’s Foster Creek Christina Lake (FCCL) oil sands and western Canada Deep basin natural gas assets (OGJ Online, Mar. 30, 2017). ConocoPhillips intends to sell its Cenovus shares in the open market beginning in second-quarter 2021 and expects to complete the sale process by fourth-quarter 2022, utilizing the proceeds to fund incremental repurchases of ConocoPhillips shares.
The company plans to reduce gross debt by $5 billion over the next 5 years.