ConocoPhillips on Thursday said it expects to see higher sequential 2Q2006 oil and gas production over 1Q2006, mostly on the acquisition of Burlington Resources Inc. (see Daily GPI, April 3). Meanwhile, BP plc, already beset by safety problems at some of its refinery units and an alleged propane price-fixing scheme (see Daily GPI, June 29), expects its quarterly output to fall about 2.5% from a year ago.

Conoco said it also expects to record a quarterly earnings benefit of about 25 cents/share from tax rate reductions recently enacted in Canada and Texas. It will report its 2Q results on July 26.

Conoco said 2Q production, including Syncrude and excluding its investment in Russian-based LUKOIL, is expected to be about 30% higher than the same period a year ago. In addition to the inclusion of Burlington Resources’ production, the company had initial crude oil liftings from Libya, including the make-up of a portion of the company’s underlift position, partially offset by lower production in the United Kingdom due to planned maintenance.

Quarterly exploration expenses at Conoco are expected to be approximately $155 million before-tax. In addition to the inclusion of the Burlington Resources exploration program, the company expects to have higher “geological and geophysical expenditures” than a year ago, Conoco said in a statement.

“As expected, corporate expenses are anticipated to be significantly higher in the second quarter due to increased interest expense associated with a higher average debt balance attributable to the Burlington Resources acquisition and other related charges,” said Conoco. “In addition, the weakening of the U.S. dollar is expected to result in negative foreign currency impacts.”

Conoco’s debt balance is forecast to be approximately $29.5 billion at the end of the second quarter. The number of weighted-average diluted shares outstanding during the quarter is estimated to be 1.678 billion shares.

London-based BP, which is scheduled to report its quarterly earnings on July 25, said oil and gas output likely will fall for the fourth straight quarter to around 4.01 million boe/d. The figure is just shy of Thomson First Call estimates of between 4.02-4.09 million boe/d, and down from 2Q2005’s 4.112 million boe/d. BP produced 4.035 million boe/d in 1Q2006.

Production climbed 12% percent at BP’s Russian joint venture, TNK-BP, but dropped 4% across the rest of its portfolio, where profits are higher because of lower taxes. BP is forecasting production this year will range between 4.1-4.2 million boe/d, and it said it expects higher production will be weighted toward the second half of 2006.

BP said it lost 20,000 boe/d of production after the Venezuelan government demanded companies convert their contracts into joint ventures with its national oil company PDVSA. Also, last year’s hurricane damage to BP’s Gulf of Mexico facilities weighed once again on the output, it said.

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