Making good on its previous warnings to its shareholders, ConocoPhillips said Thursday that its 2Q2004 worldwide natural gas and crude oil production levels are expected to be lower than they were during 1Q2004.
The company estimated that crude oil and natural gas production for the second quarter is expected to be approximately 3-4% below that of the previous quarter, as anticipated. Similarly, the company said in April that first quarter oil and natural gas production would be “slightly less” sequentially from the fourth quarter of 2003 (see Daily GPI, April 6).
For the first quarter, ConocoPhillips Exploration & Production segment saw daily production, including Canadian Syncrude, average 1.61 MMboe for the first quarter, which was flat sequentially from 4Q2003, and slightly less than last year’s 1.63 MMboe (see Daily GPI, April 29).
“Increased output from Bayu-Undan in the Timor Sea is expected to be more than offset by the impact of scheduled maintenance, normal seasonal declines, and the impact of asset sales,” the company said. “Full-year production is still expected to be approximately 1.56 million boe/d, including Syncrude. Although domestic natural gas prices were higher for the quarter, international gas prices are expected to offset these increases.”
ConocoPhillips said it expects to record higher worldwide crude oil prices in the second quarter, but added that worldwide natural gas prices are expected to remain similar to 1Q2004. The company also noted that its exploration expenses are expected to be higher than those of the previous quarter as a result of leasehold impairments in Brazil and Nigeria.
In its Refining and Marketing division, ConocoPhillips said it expects to see significantly higher worldwide refining margins and slightly lower capacity utilization rates in the second quarter. Turnaround costs are also expected to be approximately $65 million before-tax. ConocoPhillips added that the company has already taken into account lower midstream volumes.
The company expects its debt-to-capital ratio to be approximately 29%, down from 32% at the end of 1Q2004. ConocoPhillips will unveil its actual results for the second quarter on July 28.
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