ConocoPhillips reports 1Q earnings gains

ConocoPhillips reported first-quarter 2019 earnings of $1.8 billion compared with first-quarter 2018 earnings of $900 million. Excluding special items, first-quarter adjusted earnings were $1.1 billion compared with first-quarter 2018 adjusted earnings of $1.1 billion.

ConocoPhillips reported first-quarter 2019 earnings of $1.8 billion compared with first-quarter 2018 earnings of $900 million. Excluding special items, first-quarter adjusted earnings were $1.1 billion compared with first-quarter 2018 adjusted earnings of $1.1 billion.

Special items for the current quarter included an unrealized gain on Cenovus Energy equity, recognition of deferred revenue, and amounts recognized from the PDVSA International Chamber of Commerce (ICC) settlement.

Production excluding Libya for the first quarter was 1.32 million boe/d, an increase of 94 million boe/d compared with the same period a year ago. The volume impact from acquisitions and dispositions was a net benefit of 30 million boe/d. Excluding this impact, production increased by 64 million boe/d. This remaining increase was primarily due to growth from the Big 3 unconventionals, major projects in Alaska, Europe and Asia Pacific, and development programs. Growth more than offset normal field decline, downtime from a planned turnaround in Qatar, and mandated production curtailment in Canada. Production from Libya was 43 million boe/d.

Earnings were higher compared with the first quarter of 2018 primarily due to an unrealized gain on Cenovus Energy equity, higher volumes and recognition of deferred revenue. Excluding special items, adjusted earnings improved compared with first-quarter 2018 primarily due to higher volumes, partially offset by depreciation expense and production and operating expenses associated with the higher volumes.

For the quarter, cash provided by operating activities was $2.89 billion. Excluding a $500 million change in operating working capital, ConocoPhillips generated $2.94 billion in cash from operations (CFO), which included $100 million from the PDVSA ICC settlement and $100 million from APLNG distributions. The company also incurred $1.6 billion in capital expenditures and investments, $800 million for share repurchases and $300 million for dividends, entirely funded by CFO.

Guidance for second-quarter production is 1.24-1.28 million boe/d, reflecting the impact from seasonal turnarounds planned in Alaska, Canada, and Europe. The guidance excludes Libya and does not include impacts from the recently announced UK divestiture agreement. Full-year guidance for depreciation, depletion, and amortization has been decreased to $6.1 billion, reflecting the held-for-sale impact of the UK divestiture agreement.

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