ConocoPhillips' 4Q Shows Sequential Production Gains But Drop from 4Q02
ConocoPhillips expects to report fourth quarter oil and gas production of about 1.59 MMboe/d, up sequentially from the 1.56 MMboe/d reported in the third quarter, but down from a year earlier when the Houston-based major's output was 1.62 MMboe/d.
The sequential gains were boosted by higher upstream earnings, but refinery margins are expected to be sharply lower. Final results will be issued Jan. 28.
The sequential improvement, said Conoco, results from seasonality, new Vietnam production and lower overall maintenance activity. However, the earnings are expected to be offset by operating interruptions in Venezuela, Alaska and Indonesia. Also, higher international natural gas prices are expected to be largely offset by lower U.S. prices, with exploration expenses for the full year expected to be approximately $600 million.
In its downstream, Conoco reported it will have "significantly lower" U.S. refinery margins, which resulted from higher feedstock costs and lower U.S. wholesale and retail fuel marketing margins. Refinery capacity utilization for the quarter is averaging in the low 90% range, the company said.
Merger-related cost cutting continues to help the company trim its balance sheet. The debt level at the end of the fourth quarter is expected to be $17.8 billion, nearly $900 million less than at the end of the third quarter. Part of its debt reduction came from the completed sale of The Circle K Corp.
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