ConocoPhillips’ natural gas and oil production worldwide rose in the first three months of the year, but its exploration and production (E&P) unit suffered because of lower gas prices in North America, the company said Thursday.
In an interim quarterly earnings update, the Houston-based producer said it expects 1Q2009 production to be about 30,000 boe/d more than in 4Q2008. E&P results, however, are expected to be impacted by “losses in the U.S. Lower 48 and Canada mainly due to lower realized natural gas prices.” Exploration expenses for the quarter were estimated to be around $275 million before taxes.
CEO Jim Mulva early this year projected that the company’s output in 1Q2009 would be flat sequentially (see Daily GPI, Jan. 21). The company swung to a loss of $34 billion in 4Q2008.
Midstream operating results are seen falling in 1Q2009 because of a drop in natural gas liquids prices. However, Conoco expects to record an $85 million gain related to the recognition of deferred gains on shares issued by a unit of DCP Midstream Partners LP, a joint venture of Spectra Energy and Conoco.
Refining and marketing results are forecast to be lower for the quarter because of a decrease of more than 50% in worldwide marketing margins, the producer said.
The company’s debt balance at the end of March was around $29.4 billion, or $1.9 billion more than at the end of 2008, partly because of an increase in working capital, the company said. Conoco is scheduled to issue its quarterly results on April 23.
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