ConocoPhillips reported fourth-quarter 2022 earnings of $3.2 billion, compared with fourth-quarter 2021 earnings of $2.6 billion. Special items for the current quarter were primarily driven by impairment of certain aged, suspended wells and corporate expenses. Excluding these special items, fourth-quarter 2022 adjusted earnings were $3.4 billion, compared with fourth-quarter 2021 adjusted earnings of $3 billion. Adjusted earnings increased primarily due to higher volumes and improved realized prices, partially offset by higher operating costs and depreciation, depletion and amortization (DD&A) associated with higher volumes, and commercial and inventory timing.
Full-year 2022 earnings were $18.7 billion, compared with full-year 2021 earnings of $8.1 billion. Excluding special items, full-year 2022 adjusted earnings were $17.3 billion, compared with full-year 2021 earnings of $8 billion.
Production for fourth-quarter 2022 was 1.76 million boe/d, an increase of 150,000 boe/d from the same period a year ago. After adjusting for closed acquisitions and dispositions and the conversion of previously acquired Concho-contracted volumes from a two-stream to a three-stream basis, fourth-quarter 2022 production decreased by 3,000 boe/d or 0.2% from the same period a year ago. Organic growth from Lower 48 and other development programs more than offset decline; however, total company fourth-quarter production was lower overall, primarily due to weather and downtime impacts in the Lower 48.
In the Lower 48, production averaged 997,000 boe/d (Permian basin; 671,000 boe/d, Eagle Ford, 214,000 boe/d; Bakken, 96,000 boe/d). In Canada, drilling and completion activities continued at Montney with the fourth pad coming online during the quarter while construction progressed on the second phase of the company’s central processing plant. In Norway, the company progressed drilling programs on the Tommeliten A and Eldfisk North projects. In Libya, the company acquired an additional 4.1% interest in the Waha concession, bringing current ownership to 20.4%.
The company’s total average realized price was $71.05/boe, 8% higher than the $65.56/boe realized in fourth-quarter 2021. Production remains unhedged, thus realizing the full impact of changes in marker prices.
Full-year 2022 production was 1.74 million boe/d, an increase of 171,000 boe/d from the same period a year ago. After adjusting for closed acquisitions and dispositions, the conversion of previously acquired Concho-contracted volumes from a two-stream to a three-stream basis and 2021 Winter Storm Uri impacts, production decreased 16,000 boe/d or 1% from the same period a year ago.
The company’s total realized price for full-year 2022 was $79.82/boe, 46% higher than the $54.63/boe realized in 2021.
Reserves update
Preliminary 2022 year-end proved reserves are 6.6 billion boe, with total reserve replacement ratio of 176%, including closed acquisitions and dispositions and market factors. Reserve changes excluding closed acquisitions and dispositions result in an organic reserve replacement ratio of 177%.
Outlook
The company’s 2023 total capital expenditure guidance is $10.7-11.3 billion, which includes $9.1-9.3 billion for base capital and $1.6-2 billion for anticipated major project spending at North Field East (NFE), North Field South (NFS), PALNG, and Willow.
Base capital includes funding for ongoing development drilling programs; exploration and appraisal activities; base maintenance; and projects to reduce the company’s Scope 1 and 2 emissions intensity and fund investments in several early-stage low-carbon opportunities that address end-use emissions.
The company’s 2023 production guidance is 1.76-1.8 million boe/d.