ConocoPhillips posts Q2 adjusted loss of $1 billion

July 30, 2020
ConocoPhillips reported second-quarter 2020 earnings of $260 million, compared with second-quarter 2019 earnings of $1.58 billion. Excluding special items, quarterly adjusted earnings were a loss of $1.0 billion.

ConocoPhillips reported second-quarter 2020 earnings of $260 million, compared with second-quarter 2019 earnings of $1.58 billion. Excluding special items, second-quarter 2020 adjusted earnings were a loss of $1.0 billion, compared with second-quarter 2019 adjusted earnings of $1.1 billion. Special items for the current quarter include a realized gain on the completion of the Australia-West divestiture and an unrealized gain on Cenovus Energy equity.

For the quarter, net cash provided by operating activities was $157 million, down from $2.89 billion for the same quarter a year ago.

“Headline second-quarter performance was dominated by weak realized prices, coupled with our rational economic action to curtail production in favor of expected higher future prices,” said Ryan Lance, chairman and chief executive officer. “Importantly, our underlying business results were strong, reflecting our ongoing commitment to safely executing our plans and the dedication of our workforce during this challenging time. We are monitoring the market closely to develop a view around the timing and path of price recovery and to guide our corresponding actions.”

The company’s total average realized price per barrel of oil equivalent was $23.09/boe, 54% lower than the $50.50/boe realized in the second quarter of 2019, reflecting lower marker prices and regional differentials.

Production excluding Libya for the quarter was 981,000 boe/d after curtailments of 225,000 boe/d, resulting in a decrease of 309,000 boe/d from the same period a year ago. Adjusting for closed dispositions, second-quarter 2020 production was 957,000 boe/d, a decrease of 212,000 boe/d from the same period a year ago.

This decrease was primarily due to curtailments and normal field decline, partially offset by growth from the Big 3, in addition to development programs in Canada and Europe. Excluding disposition and estimated curtailment impacts, second-quarter 2020 production was slightly higher than the same period a year ago. There was no production from Libya as it remained in force majeure during the quarter.

Based on the company’s economic criteria, ConocoPhillips restored curtailed production in Alaska during the month of July. The company also began bringing some curtailed volumes in the Lower 48 back online in July and expect to be fully restored in September. At Surmont, the company began restoring production in July though the ramp up will be slower due to planned turnarounds in the third quarter and limited staffing in the field as a COVID-19 mitigation measure.

During the quarter, ConocoPhillips completed the Australia-West divestiture, generating $800 million in proceeds. The company also announced bolt-on acquisition of adjacent acreage in the liquids-rich Montney in Canada.

ConocoPhillips’ 6-month 2020 earnings were a loss of $1.5 billion, compared with 6-month 2019 earnings of $3.4 billion. Six-month 2020 adjusted earnings were a loss of $0.5 billion, compared with six-month 2019 adjusted earnings of $2.3 billion.