ConocoPhillips (NYSE:COP) today reported a first-quarter 2016
net loss of $1.5 billion, or ($1.18) per share, compared with
first-quarter 2015 earnings of $272 million, or $0.22 per share.
Excluding special items, first-quarter 2016 adjusted earnings were
a net loss of $1.2 billion, or ($0.95) per share, compared with a
first-quarter 2015 adjusted net loss of $222 million, or ($0.18)
per share. Special items for the current quarter were related to
non-cash impairments in the Gulf of Mexico and United Kingdom and
pension settlement expense.
This Smart News Release features multimedia.
View the full release here:
http://www.businesswire.com/news/home/20160428005304/en/
Ryan Lance, ConocoPhillips Chairman and
Chief Executive Officer (Photo: Business Wire)
Summary
- Achieved first-quarter production of
1,578 MBOED.
- Lowered operating costs by more than 20
percent year over year.
- Reduced 2016 capital expenditures
guidance from $6.4 billion to $5.7 billion.
- Raised $4.6 billion of low-cost debt
and ended the quarter with $5.2 billion of cash and short-term
investments.
- Loaded 11 cargoes from APLNG Train 1 in
Australia; on track for first cargo from Train 2 in the fourth
quarter of 2016.
- Continue to progress toward first
production at Foster Creek Phase G and Christina Lake Phase F in
Canada and Alder in Europe in 2016.
“We continue to safely deliver on our operational targets while
taking steps to manage through this period of low prices,” said
Ryan Lance, chairman and chief executive officer. “During the
quarter, we took actions to conserve cash, improve liquidity and
position the company for strong performance as prices improve. We
reduced our dividend, further reduced our 2016 capital expenditures
guidance, raised low-cost debt and continued to improve our cost
structure. These actions, in combination with ongoing strong
execution of the business, allow us to deliver on our value
proposition, which recognizes the importance of distributions to
shareholders, disciplined capital allocation, a focus on returns
and a strong investment-grade balance sheet. As challenging as this
price downturn has been, we are a much stronger company for the
long term.”
First-Quarter Review
Production for the first quarter of 2016 was 1,578 thousand
barrels of oil equivalent per day (MBOED), a decrease of 32 MBOED
compared with the same period a year ago. Normal field decline and
impacts from dispositions exceeded growth from major projects and
development programs, improved well performance, and the impact of
lower prices on royalties and production sharing contracts. When
adjusted for 66 MBOED from dispositions and downtime, production
increased 34 MBOED, or 2 percent.
During the quarter, APLNG loaded 11 cargoes from Train 1 in
Australia. Lower 48 transitioned from 13 operated rigs at year-end
2015 to three operated rigs in April. Drilling continued at CD5 and
Drill Site 2S in Alaska with production continuing to ramp up from
both projects. In the Gulf of Mexico, the Melmar exploration well
was plugged and abandoned as a dry hole. The exploration and
appraisal program continues in Senegal.
Adjusted earnings were lower compared with first-quarter 2015
primarily due to lower realized prices, partially offset by lower
operating costs. The company’s total realized price was $22.94 per
barrel of oil equivalent (BOE), compared with $36.92 per BOE in the
first quarter of 2015, reflecting lower average realized prices
across all commodities.
Operating costs for the quarter were $1.69 billion compared with
$2.13 billion in the first quarter of 2015. Adjusted for $0.12
billion pre-tax of 2016 special items from pension settlement
expense and inventory write-downs in the Gulf of Mexico, as well as
$0.1 billion pre-tax from restructuring costs in 2015, operating
costs were reduced by 23 percent, or $0.46 billion, compared with
first-quarter 2015.
For the quarter, cash provided by operating activities was $0.4
billion. Excluding a $0.3 billion change in operating working
capital, ConocoPhillips generated $0.7 billion in cash from
operations. In addition, the company funded $1.8 billion in capital
expenditures and investments, received proceeds from asset
dispositions of $0.1 billion, paid dividends of $0.3 billion, and
increased debt by $4.5 billion.
Outlook
The company has reduced its 2016 capital expenditures guidance
from $6.4 billion to $5.7 billion, primarily driven by reduced
deepwater exploration activity, deferrals and lower costs across
the portfolio.
The company expects to meet its previously stated full-year 2016
production guidance of approximately 1,525 MBOED, in line with 2015
production adjusted for 64 MBOED for the full-year impact of 2015
dispositions. Second-quarter 2016 production guidance is 1,500 to
1,540 MBOED, which reflects significant planned turnaround activity
during the quarter.
The company’s other guidance items remain unchanged, with 2016
operating costs of $7.0 billion; corporate segment net expense of
$1.0 billion; depreciation, depletion and amortization of $8.5
billion; and exploration dry hole and leasehold impairment expense
of $0.8 billion. Guidance excludes any special items.
ConocoPhillips will host a conference call today at 12:00 p.m.
EDT to discuss this announcement. To listen to the call, as well as
view related presentation materials and supplemental information,
go to www.conocophillips.com/investor.
--- # # # ---
About ConocoPhillips
ConocoPhillips is the world’s largest independent E&P
company based on production and proved reserves. Headquartered in
Houston, Texas, ConocoPhillips had operations and activities in 21
countries, $20 billion in annualized revenue, $100 billion of total
assets, and approximately 15,600 employees as of March 31, 2016.
Production, excluding Libya, averaged 1,578 MBOED for the three
months ended March 31, 2016, and proved reserves were 8.2 billion
BOE as of Dec. 31, 2015. For more information, go to
www.conocophillips.com.
CAUTIONARY STATEMENT FOR THE PURPOSES
OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
This news release contains forward-looking statements.
Forward-looking statements relate to future events and anticipated
results of operations, business strategies, and other aspects of
our operations or operating results. In many cases you can identify
forward-looking statements by terminology such as "anticipate,"
"estimate," "believe," "continue," "could," "intend," "may,"
"plan," "potential," "predict," "should," "will," "expect,"
"objective," "projection," "forecast," "goal," "guidance,"
"outlook," "effort," "target" and other similar words. However, the
absence of these words does not mean that the statements are not
forward-looking. Where, in any forward-looking statement, the
company expresses an expectation or belief as to future results,
such expectation or belief is expressed in good faith and believed
to have a reasonable basis. However, there can be no assurance that
such expectation or belief will result or be achieved. The actual
results of operations can and will be affected by a variety of
risks and other matters including, but not limited to, changes in
commodity prices; changes in expected levels of oil and gas
reserves or production; operating hazards, drilling risks,
unsuccessful exploratory activities; difficulties in developing new
products and manufacturing processes; unexpected cost increases;
international monetary conditions; potential liability for remedial
actions under existing or future environmental regulations;
potential liability resulting from pending or future litigation;
limited access to capital or significantly higher cost of capital
related to illiquidity or uncertainty in the domestic or
international financial markets; and general domestic and
international economic and political conditions; as well as changes
in tax, environmental and other laws applicable to our business.
Other factors that could cause actual results to differ materially
from those described in the forward-looking statements include
other economic, business, competitive and/or regulatory factors
affecting our business generally as set forth in our filings with
the Securities and Exchange Commission. Unless legally required,
ConocoPhillips undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Use of Non-GAAP Financial Information – This news release
includes the terms adjusted earnings, adjusted earnings per share,
operating costs, and liquidity. These are non-GAAP financial
measures. These terms are included to help facilitate comparisons
of company operating performance across periods and with peer
companies. Operating costs represent controllable costs and include
production and operating expenses, selling, general and
administrative expenses and exploration expenses excluding dry
holes and leasehold impairments. Liquidity includes available
borrowing capacity under our revolving credit facility of $6.75
billion, of which $6 billion was available, ending cash and cash
equivalents of $4.9 billion, and short-term investments of $0.3
billion less $0.5 billion of certain cash required for operations.
Liquidity is used to provide additional information regarding the
Company’s access to cash, both immediately and over a short-term
time horizon.
References in the release to earnings refer to net income/(loss)
attributable to ConocoPhillips.
ConocoPhillips Reconciliation of Earnings
to Adjusted Earnings $ Millions, Except as Indicated
1Q
2016 2015 Earnings $
(1,469 ) 272 Adjustments: Impairments 232 -
Pension settlement expense 58 - International tax law changes -
(555 ) Restructuring - 61
Adjusted earnings / (loss) $ (1,179
) (222 ) Earnings (loss) per
share of common stock (dollars)
$ (1.18 )
0.22 Adjusted earnings / (loss) per share of
common stock (dollars)
$ (0.95 )
(0.18 )
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160428005304/en/
ConocoPhillipsDaren Beaudo, 281-293-2073
(media)daren.beaudo@conocophillips.comorSidney J. Bassett,
281-293-5000 (investors)sid.bassett@conocophillips.comorVladimir R.
dela Cruz, 281-293-5000
(investors)v.r.delacruz@conocophillips.com
ConocoPhillips (NYSE:COP)
Historical Stock Chart
From Mar 2024 to Apr 2024
ConocoPhillips (NYSE:COP)
Historical Stock Chart
From Apr 2023 to Apr 2024