FILE PHOTO: Logos of ConocoPhillips are seen in its booth at Gastech, the world’s biggest expo for the gas industry, in Chiba, Japan, April 4, 2017. REUTERS/Toru Hanai
Independent oil and gas producer ConocoPhillips reported an 11.6per cent drop in quarterly profit on Tuesday, as fears of slowing global economy weighed on crude prices.
REUTERS: ConocoPhillips missed Wall Street estimates for quarterly profit on Tuesday as it spent more than expected and took a hit from lower crude prices due to fears of a slowing global economy.
The OPEC and Russia have put a lid on production, but that has not translated into higher prices due to surging shale oil output from the United States.
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Shares of Conoco fell 2per cent as the Houston, Texas-based company reported US$1.73 billion in capital expenditure during the quarter, above average estimates of US$1.53 billion, according to IBES data from Refinitiv.
The company also raised its capital spending for 2019 by US$200 million to US$6.3 billion, citing more drilling in Alaska and the Eagle Ford shale of Texas.
Raymond James analyst Muhammed Ghulam called the results “mixed” and said the share price movement was in line with recent market reactions to other oil companies raising capital budgets.
Investors have been pressing oil producers to cut spending on expansion and increase returns with share buybacks or dividends. The company said it would increase full-year buyback target by US$500 million to US$3.5 billion and could spend up to US$300 million on acquisitions.
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U.S. light crude prices averaged US$59.91 per barrel in the second quarter, 11.8per cent lower than a year earlier, while Brent crude averaged US$68.47 per barrel, 8.7per cent lower than a year earlier.
That led to a drop in realized prices per barrel for the company, which earned US$50.50 for each barrel sold in the latest quarter, compared with US$54.32 a year earlier.
ConocoPhillips, the world’s largest independent oil and gas producer, said production, excluding Libya, rose to 1.29 million barrels of oil equivalent per day (boepd), an increase of 79,000 boepd from a year earlier.
For the full-year, Conoco tightened its production outlook to a range of between 1.31 million boepd and 1.34 million boepd compared with a previous forecast of between 1.30 million boepd and 1.35 million boepd.
Adjusted earnings fell to US$1.14 billion, or US$1.01 per share, in the second quarter ended June 30 from US$1.29 billion, or US$1.09 per share, a year earlier.
Analysts on average had expected the company to post a profit of US$1.03 per share, according to IBES data from Refinitiv.
(Reporting by Debroop Roy in Bengaluru; Editing by Anil D’Silva and Arun Koyyur)
