ConocoPhillips Reports Gains on Asset Sales
HOUSTON -- First quarter net income rose 7.7 percent for ConocoPhillips, the third largest U.S. oil company, due to gains on the sale of assets balanced lower energy prices and rising costs, Bloomberg News reported. Earnings for the company reached $3.55 billion, compared to the $3.29 billion seen a year prior.
"Operating performance for the quarter was consistent with our plans and we continued to progress the execution of our financial strategy," said Jim Mulva, chairman and chief executive officer.
An acquisition of Burlington Resources Inc. increased output and made ConocoPhillips the largest publicly traded producer of natural gas, which saw prices fall 25 percent in the first quarter, the report stated.
"Output is up year over year, but that's entirely due to Burlington,'" Matti Teittinen, an analyst at John S. Herold Inc. in Boston, told Bloomberg News. "The price paid for Burlington was somewhat high at the time, so they are more sensitive to gas prices."
The company also gained $500 million from divestitures, the report stated.
ConocoPhillips's first-quarter profit from oil and gas production fell 8.8 percent to $2.33 billion on the decreases in prices and increased costs. Meanwhile, increased production from additional fields in Libya and Canada that were acquired with the Burlington purchase lessened the impact from lowered prices.
Output for the company was 1.3 percent lower than last year's fourth quarter due to unplanned shutdowns the U.S., along with production cuts in Libya and Venezuela, which are part of the Organization of Petroleum Exporting Countries.
However it was a 2.7 percent drop in U.S. gas production that surprised Robert Goodof, of Loomis Sayles & Co. in Boston, who helps manage $20 billion in equities, including about 885,000 ConocoPhillips shares.
"U.S. volumes were a little light, and it was because of Burlington," Goodof told Bloomberg News. "Folks expected a better number."
High refining margins are "more a factor of refinery utilization and outages than anything else," Philip Weiss, an analyst at Argus Research Corp. in New York, told Bloomberg News. "Gasoline demand is rising at a faster pace than it has in the past couple of years, and that's obviously going to benefit the refining margins as well."
The company averaged 94-percent utilization of its refineries during the quarter, compared with a national average of 87 percent, the report stated.
ConocoPhillips expects further gains from asset sales later this year, following its trend of disposing of properties. Total sales should amount to $4 billion by year's end, with first-quarter sales accounting for $1.2 billion in proceeds, the company stated earlier this month.
"Operating performance for the quarter was consistent with our plans and we continued to progress the execution of our financial strategy," said Jim Mulva, chairman and chief executive officer.
An acquisition of Burlington Resources Inc. increased output and made ConocoPhillips the largest publicly traded producer of natural gas, which saw prices fall 25 percent in the first quarter, the report stated.
"Output is up year over year, but that's entirely due to Burlington,'" Matti Teittinen, an analyst at John S. Herold Inc. in Boston, told Bloomberg News. "The price paid for Burlington was somewhat high at the time, so they are more sensitive to gas prices."
The company also gained $500 million from divestitures, the report stated.
ConocoPhillips's first-quarter profit from oil and gas production fell 8.8 percent to $2.33 billion on the decreases in prices and increased costs. Meanwhile, increased production from additional fields in Libya and Canada that were acquired with the Burlington purchase lessened the impact from lowered prices.
Output for the company was 1.3 percent lower than last year's fourth quarter due to unplanned shutdowns the U.S., along with production cuts in Libya and Venezuela, which are part of the Organization of Petroleum Exporting Countries.
However it was a 2.7 percent drop in U.S. gas production that surprised Robert Goodof, of Loomis Sayles & Co. in Boston, who helps manage $20 billion in equities, including about 885,000 ConocoPhillips shares.
"U.S. volumes were a little light, and it was because of Burlington," Goodof told Bloomberg News. "Folks expected a better number."
High refining margins are "more a factor of refinery utilization and outages than anything else," Philip Weiss, an analyst at Argus Research Corp. in New York, told Bloomberg News. "Gasoline demand is rising at a faster pace than it has in the past couple of years, and that's obviously going to benefit the refining margins as well."
The company averaged 94-percent utilization of its refineries during the quarter, compared with a national average of 87 percent, the report stated.
ConocoPhillips expects further gains from asset sales later this year, following its trend of disposing of properties. Total sales should amount to $4 billion by year's end, with first-quarter sales accounting for $1.2 billion in proceeds, the company stated earlier this month.