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ConocoPhillips Alaska 2Q profits down 26% Oil, gas production continue to fall while commodity prices hold steady; company reports $381M 2nd quarter Alaska earnings Eric Lidji For Petroleum News
ConocoPhillips earned $381 million in Alaska in the second quarter of the year, down 26 percent from the first quarter and nearly 6 percent from the second quarter of 2009.
Despite those declines, rising oil prices year over year are lifting profits. Over the first six months of the year, ConocoPhillips has earned $898 million in Alaska, up nearly 28 percent from $648 million it earned through the first half of 2009. ConocoPhillips’ exploration and production activities continue to be more profitable in Alaska than across the Lower 48, where the company earned $155 million, down from $240 million in the first quarter, but up from a loss of $68 million in the second quarter of 2009.
Companywide, ConocoPhillips earned $4.16 billion in profits on $50 billion in revenues, up from $2.1 billion earned in the first quarter on $45.7 billion in revenues.
ConocoPhillips is the largest oil and gas producer in Alaska by volume, and the only major oil company to break out Alaska earnings figures on a quarterly basis.
The filings are the first since the explosion of the Deepwater Horizon drilling rig caused an oil spill in the Gulf of Mexico, prompting the federal government to issue a moratorium on offshore drilling that is impacting Alaska projects, such as ConocoPhillips’ assets in the Chukchi Sea.
“There has been heightened public focus on the safety of the oil and gas industry during this past quarter, and we are committed to improve our ability to respond immediately to offshore incidents,” Jim Mulva, ConocoPhillips’ chairman and chief executive officer, said in the company’s earnings release. “Safety and environmental stewardship, including the operating integrity of our assets, remain our highest priorities.”
Production down, prices even Production typically falls in Alaska in the second quarter.
ConocoPhillips produced 221,000 barrels of liquids per day, down from 247,000 bpd in the first quarter and 252,000 bpd in the second quarter of 2009. Natural gas production fell to 82 million cubic feet per day, down from 94 mmcfpd in the first quarter, but roughly level with the 83 mmcfpd the company produced in the second quarter of 2009.
In the Lower 48, ConocoPhillips produced 161,000 barrels of liquids per day, up 3 percent from the first quarter, but down 5 percent from the second quarter of 2009. The company produced 1.7 billion cubic feet of gas in the Lower 48 during the quarter.
Oil prices increased only 19 cents quarter over quarter to $77.44 per barrel, but jumped substantially year over year from the $55.25 ConocoPhillips reported in the second quarter of 2009. Natural gas prices fell to $4.73 per thousand cubic feet, from $5.28 per mcf reported in the first quarter and $6.38 per mcf in the second quarter of 2009.
Those prices show Alaska oil and gas trading at a premium to the Lower 48, where ConocoPhillips reported oil prices of $55.70 per barrel and gas prices of $3.93 per mcf.
LNG prices keep rising ConocoPhillips’ liquefied natural gas sales from the Kenai Peninsula export terminal averaged 51 mmcfpd, down from 56 mmcfpd in the first quarter, but up from 47 mmcfpd in the second quarter of 2009. ConocoPhillips and co-owner Marathon Oil are currently seeking a two-year extension of their export license from the U.S. Department of Energy.
ConocoPhillips reported an average LNG sales price of $12.08 per mcf, perhaps the highest nominal price ever recorded by the company. ConocoPhillips sold Kenai LNG for $11.70 per mcf in the first quarter and $7.20 per mcf in the second quarter of 2009.
ConocoPhillips also reported $10 million in “exploration charges,” up from the $7 million spent in the first quarter and the $8 million spent in the second quarter of 2009.
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