ConocoPhillips reported 1.59 million boe/d of production in 2Q2014, a 6.5% increase year-over-year, and the Houston-based oil independent's Eagle Ford and Bakken shale wells once again had the lion's share of the growth.
In the Lower 48, 2Q2014 production averaged 540,000 boe/d, a 10% increase from 2Q2014, including a 30% increase in crude oil production, "and the biggest contributors to growth in the quarter were the Eagle Ford and Bakken," exploration chief Matt Fox said during a conference call with analysts Thursday. The Eagle Ford and Bakken combined delivered 208,000 boe/d, a 38% increase compared with 2Q2013.
Production in the Eagle Ford was 157,000 boe/d in 2Q2014, due in large part to ConocoPhillips bringing on a higher-than-average number of wells in March, commissioning several compressor projects, and experiencing flush production coming from the recovery of first quarter weather impacts.
"The remainder of 2014 will see a flatter production profile as we continue to move to multi-well pad drilling" in the Eagle Ford, Fox said.
Production in the Bakken, which averaged 51,000 boe/d in 2Q2014, was helped by flush production and backlog reduction. The company expects the rate of growth in the Bakken to slow in the second half of the year due to multi-pad drilling effects and winter weather impacts. "The net effect of this is we're still on track to achieve our 2014 volume targets for both the Eagle Ford and Bakken, but we do expect rates to flatten in both the third and fourth quarters and then begin to ramp up as we head into 2015," Fox said. Unconventional appraisal also continues in the Permian and Niobrara, and the company remains optimistic about those emerging plays.
ConocoPhillips also reported production increases in Canada (284,000 boe/d, up 13,000 boe/d compared with 2Q2013) and Europe, along with a small decrease in Alaska (193,000 boe/d, down 4,000 boe/d) and flat production in Asia Pacific and the Middle East (322,000 boe/d).
All of that additional production, combined with higher average selling prices, contributed to a 1.5% increase in earnings. ConocoPhillips reported earnings of $2.08 billion ($1.67/share) compared with $2.05 billion ($1.65/share) in 2Q2013.
"Operational and financial performance was very strong in the second quarter," said CEO Ryan Lance. "We continue to grow in our North American unconventional plays while progressing our major projects. We expect to complete our major turnarounds in the third quarter and maintain a high level of both conventional and unconventional exploration activity. All of this positions us for strong momentum as we exit the year."
ConocoPhillips is on track to achieve 3-5% volume and margin growth in 2014, and production guidance for 3Q2014 (1.435-1.485 million boe/d) and 4Q2014 (1.590-1.640 million boe/d) is unchanged. The company raised the midpoint of its 2014 full-year production outlook for continuing operations, excluding Libya, to 1.525-1.550 million boe/d.
The earnings release came a day after ConocoPhillips announced the sale its Nigerian oil assets to Oando Energy Resources, resulting in net proceeds of $1.4 billion.