Phillips Petroleum Co. said Jan. 25 that its fourth-quarter net operating income, excluding special items, was more than triple fourth-quarter 1999 results.
The $701 million net income, $2.75 a share, compares to $215 million, 85 cents a share, in the fourth quarter of 1999.
Phillips said this strong quarterly operating result was driven by $695 million of net operating income from the company's exploration and production segment and $125 million from refining, marketing and transportation. Total fourth-quarter revenues were $5.8 billion, compared to $4.3 billion a year ago.
Jim Mulva, Phillips' chief executive officer, said in a statement that the quarter's net operating income was 39 percent better than the previous quarter, and credited the improvement to consistent operations and continued strong oil and natural gas prices. He also credited increased production, "primarily due to our Alaskan acquisition and higher output from Norway and Nigeria."
Mulva said that operating cash flows of $1.3 billion in the fourth quarter and proceeds from non-strategic asset dispositions enabled the company to reduce debt by more than $1 billion during the quarter, to $6.9 billion by year end. The company's debt-to-capital ratio is now 51 percent, he said, down from a peak of 61 percent following Phillips' acquisition of ARCO's Alaska assets.
Phillips said that 2000 net operating income, excluding special items, was $1.9 billion, or $7.53 a share, versus $548 million, or $2.17 a share, for 1999. Net income was slightly less than $1.9 billion, or $7.32 a share, compared with $609 million, or $2.41 a share, for 1999.
Exploration and production net operating income for 2000 was $1.9 billion, up from $526 million in 1999, because of increased crude oil production, as well as higher crude oil and natural gas prices, the company said.
Worldwide crude oil production was up 89 percent, while natural gas production was up slightly from 1999 levels. The increase in oil production was due to higher output in the United States as a result of the Alaska acquisition, and higher production in Norway. Higher gas production in Nigeria and Norway more than offset declines elsewhere.
Mulva noted that Phillips doubled its reserves and significantly increased production with its Alaska acquisition and the continued development of legacy assets.
"In 2001, with a full year's production from our Alaskan assets, we expect our average daily worldwide BOE production to be up approximately 15 percent over 2000," he said.
Phillips has allocated 87 percent of its $2.5 billion 2001 capital budget to exploration and production, Mulva said, and is "building on our positions in Alaska, the Lower 48 and Norway, and moving forward with the development of new legacy assets with three international projects — Hamaca in Venezuela, Bohai Bay offshore China, and Bayu-Undan in the Timor Sea."