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HOUSTON -- ConocoPhillips Inc. kept a streak of higher earnings alive in the first quarter, benefiting from its merger, higher oil and gas prices and improved refining margins.
The Houston-based refiner/marketer on Wednesday reported net income of $1.44 billion, compared with a net loss of $102 million a year earlier. Revenue tripled to $27.1 billion from $8.5 billion, according to The Wall Street Journal.
ConocoPhillips was created with the August merger of Conoco Inc. and Phillips Petroleum Co., and the year-earlier figures are for Phillips as a standalone company. The company sells fuel at more than 17,000 outlets in the United States under the 76, Circle K, Conoco, breakplace and Phillips 66 brands and has a refining capacity of 2.6 million barrels per day.
"We are very pleased with our first quarter performance," Jim Mulva, the company's president and chief executive, said in a statement. "Operationally, we performed well, with upstream production of 1.6 million barrels of oil equivalent per day, and downstream, we ran at 92 percent of capacity."
The downstream refining and marketing operations reported income from continuing operations of $371 million, up from $105 million in the previous quarter and a loss of $87 million in the first quarter of 2002. Improvements in that segment over the fourth quarter were primarily driven by higher worldwide refining margins and a full quarter of operations at the company's Humber refinery in Britain. The company noted that improvements were partially offset by higher energy costs.
Improved results from a year earlier were a result of the addition of the Conoco assets and higher refining and marketing margins, as well as benefits from implementing synergy initiatives following the merger.
"This is the first quarter in which we can measure our progress against the operating plan we presented in November," Mulva said. "Our solid operating performance allowed us to secure the benefits of higher oil and gas prices and higher world-wide refining margins. These factors contributed to our debt reduction of $1.5 billion."
Earnings from continuing operations at the company's upstream, or exploration and production, business, rose to $1.14 billion from $808 million in the fourth quarter and $142 million in the first quarter of 2002. Improvement from the fourth quarter primarily came from higher realized crude oil and natural-gas prices, the company said. Daily first-quarter production of 1.62 million barrels of oil equivalent was similar to fourth-quarter production. ConocoPhillips noted that decreased production in Venezuela due to the nation's national labor strike was offset by higher output from Alaska and Asia.
Total debt at the end of the first quarter was $18.2 billion, down $1.5 billion from the end of the previous quarter. The company last year announced plans to cut its 2003 budget by 25 percent, sell up to $4 billion in assets and capture $1.25 billion in merger savings.