ConocoPhillips kicked off the U.S.-based majors’ 3Q2008 earnings reports on Wednesday, and it delivered much stronger net income than in the same period a year ago, with profit rising to $5.19 billion ($3.39/share) from $3.67 billion ($2.23) in 3Q2007. Revenues also were strong, jumping to $70 billion versus $46.1 billion a year ago.

“Our U.S. operations were impacted by hurricanes Gustav and Ike during the quarter, but despite these impacts, our overall operating performance was good,” said CEO Jim Mulva. “Our upstream business continued to benefit from the strong commodity price environment and we produced 2.2 million boe/d, including an estimated 0.4 million boe/d from our LUKOIL Investment segment…”

The Houston-based producer generated $7.5 billion of cash from operations during the quarter, which enabled it to invest $4 billion in exploring for and developing oil and natural gas supplies, enhancing refining capabilities, and fostering emerging technologies, said Mulva. “It also enabled us to repurchase $2.5 billion of ConocoPhillips common stock and pay $0.7 billion in dividends. We ended the quarter with debt of $22.1 billion and a debt-to-capital ratio of 19%.”

Exploration and production (E&P) quarterly net income was well ahead of the same period a year ago, rising to $3.928 billion, compared with $2.08 billion in 3Q2007. However, the E&P profit was down slightly from 2Q2008, which the producer attributed to lower crude oil and natural gas prices, partially offset by a net benefit from asset rationalization efforts, favorable foreign exchange impacts and lower production taxes. Compared with a year earlier, the company credited the higher E&P earnings to higher commodity prices, partially offset by higher production taxes, increased operating costs and lower volumes.

Daily production from the E&P segment, including Canadian Syncrude, averaged 1.75 million boe/d, which was flat compared with 2Q2008 and in 3Q2007. When compared with 2Q2008, ConocoPhillips said production from new developments in the United Kingdom, Russia and Norway largely offset planned and unplanned downtime, which included hurricane disruptions in the Gulf of Mexico, as well as normal field decline. The production impact from hurricane disruptions was estimated at 17,000 boe/d.

Compared with a year ago, oil and gas output from new developments in the United Kingdom, Russia, Indonesia, Norway and Canada was slightly less than impacts from normal field decline, unplanned downtime and production sharing contracts, the producer said.

In the final three months of the year, “we anticipate the company’s E&P segment production will be higher than the third quarter,” said Mulva. “We expect full-year 2008 production to be slightly below 1.8 million boe/d due to the impact of higher prices on production-sharing-contract volumes and lost production associated with hurricanes Gustav and Ike. We anticipate exploration expenses to be in the range of $400 million for the quarter.”

©Copyright 2008Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.