ConocoPhillips Company (ticker: COP) reported first quarter 2018 earnings of $0.9 billion, or $0.75 per share. This compares to first quarter 2017 earnings of $0.6 billion, or $0.47 per share.
First quarter production, excluding Libya, was 1,224 MBOEPD. Production from Libya was 45 MBOEPD. Conoco said that it grew year-over-year production in the Eagle Ford, Bakken and Delaware by 20%.
For the quarter, cash provided by operating activities was $2.4 billion. Excluding a $0.1 billion change in working capital, ConocoPhillips generated $2.5 billion in cash from operations, exceeding $1.5 billion in capital expenditures and investments, $0.5 billion of repurchased shares and $0.3 billion of dividends.
In addition, the company paid $2.9 billion to reduce debt and sold $1.6 billion of short-term investments. After the quarter ended, the company said it received the final installment of the Ecuador arbitration award, as well as its first discretionary distribution from APLNG.
The company also increased planned share repurchases by 33% (repurchased $0.5 billion in the first quarter) and is on track for full-year share repurchases of $2 billion.
“We safely delivered our plan again this quarter, while generating a strong improvement in free cash flow, reducing our debt and returning over 30 percent of cash from operations to shareholders through our dividend and buyback program,” said ConocoPhillips Chairman and CEO Ryan Lance.
Operations
- In Europe, progress continued at Aasta Hansteen and Clair Ridge, with both projects expected to deliver first production by the end of the year
- In China, Bohai Phase 3 activities continued as planned
- Off the northwest coast of Australia, the rig for the final phase of Bayu-Undan development was mobilized and drilling began in April
In Alaska, Conoco said that the encouraging results of three Willow appraisal wells support the previous estimate of more than 300 million barrels of recoverable oil. Additionally, three exploration wells represent new discoveries on the Western North Slope. The GMT-1 development drilling has commenced and the project is on track to deliver first oil in the fourth quarter of 2018.
In Canada, the company increased its acreage position by more than 30% in the liquids-rich Montney and continued appraisal drilling – Surmont also began partial use of condensate diluent to improve netbacks.
The company also announced its acquisition of early life-cycle unconventional acreage in the Austin Chalk in central Louisiana.
Outlook
Q2 2018 production guidance, excluding Libya, is expected to be 1,170-1,210 MBOEPD. The company increased its full year 2018 production guidance to 1,200-1,240 MBOEPD to reflect first-quarter outperformance and a change in disposition assumptions.
Conoco said that these, and other improvements, more than offset the impact from a third-party gas pipeline in Malaysia that is now assumed to be out of service for the entire year.
CapEx – 2018
The company’s 2018 capital guidance of $5.5 billion is unchanged. This guidance excludes acquisition investment for the $0.4 billion bolt-on transaction in Alaska and the $0.1 billion acquisition of additional acreage in the Montney in Canada.
The company’s other full year guidance items are also unchanged.
