ConocoPhillips reports $31.8 billion earnings loss

By OGJ editors
HOUSTON, Jan. 28 -- ConocoPhillips posted a fourth-quarter 2008 loss of $31.76 billion.

Slumping oil prices hurt upstream results, although the company's production volumes moved higher and production taxes declined. Downstream earnings, while still positive, were down from a year earlier due to weaker US refining margins.

In fourth quarter 2007, the company earned $4.37 billion.

Revenues in the recent quarter were $44.5 billion, down 16% from a year earlier.

The company's exploration and production business reported a $24.3 billion fourth-quarter 2008 loss, compared with net income in the final 2007 quarter of $2.6 billion.

Production increased due to improved well performance and seasonality in Alaska and the Lower-48, as well as less planned and unplanned downtime, the company reported. When compared with fourth quarter 2007, production from new developments—primarily in the UK, Russia, Canada, Norway, and Indonesia—more than offset the impact of field decline.

The company also reported that higher dry-hole costs and lease impairments drove up exploration expenses in the recent quarter. Before-tax exploration expenses were $473 million in fourth quarter 2008, compared with $268 million in fourth quarter 2007.

ConocoPhillips's refining and marketing segment reported fourth-quarter net income of $289 million, compared with $1.1 billion in fourth quarter 2007.

Lower natural gas liquids prices reduced midstream earnings for the quarter to $69 million, down from $162 million a year earlier. And the chemicals segment posted a $6 million quarterly loss on lower margins and volumes.

Meanwhile, the company's Lukoil Investment segment recorded a net loss of $7.4 billion in the recent quarter.

For 2008, the company recorded a net loss of $17 billion, compared with 2007 earnings of $11.89 billion. But revenues were $240.8 billion, up from $187.4 billion a year ago.