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ConocoPhillips earns $2.3B in Alaska Despite crash in final quarter, earnings increase slightly, oil and gas production down, natural gas prices aligned with Lower 48 Eric Lidji Petroleum News
ConocoPhillips earned more than $2.3 billion in Alaska in 2008, up around 2.7 percent from the $2.2 billion earned in 2007, according to financial filings released on Jan. 28.
The company earned $456 million on exploration and production in Alaska in the fourth quarter of 2008, up slightly from the $448 million earned during the same period of 2007.
Those numbers show the unusual way ConocoPhillips finished out the last two years, as roughly even production yielded roughly even profits despite falling commodity prices.
In the final quarter of 2007, when ConocoPhillips sold Alaska oil on the West Coast for an average price of $87.88, the company paid some $234 million to comply with a revised tax code that went into effect in November and included retroactive elements.
In the final quarter of 2008, ConocoPhillips watched the delivered price of Alaska North Slope crude oil fall from a high of about $96 a barrel to a low of about $26 a barrel. The company reported an average sales price of $64.13 over that three-month stretch.
Even with that drop, ConocoPhillips saw higher oil prices on average year over year, selling a barrel of Alaska oil for an average of $69.75 in 2007 and $99.23 in 2008.
Companywide, ConocoPhillips lost $31.8 billion in the final three months of 2008 and some $17 billion for the year after a previously announced write down of assets.
ConocoPhillips plans to decrease spending and lay off some of its workforce this year.
Oil and gas production down Higher average prices helped offset a continued decline in North Slope production.
After planned maintenance tempered oil production in the third quarter, ConocoPhillips produced 258,000 barrels of oil per day on average in Alaska in the fourth quarter of 2008, just slightly above the production levels over the same period in 2007.
But despite those steady fourth-quarter figures, ConocoPhillips saw a roughly 6.5 percent decline in oil and condensate production in Alaska between 2007 and 2008. The company produced 244,000 bpd of oil last year, down from 261,000 bpd in 2007.
ConocoPhillips produced 88 million cubic feet of natural gas per day in Alaska in the fourth quarter of 2008, down 13.7 percent from the 102 million cubic feet per day produced in the same period in 2007. For the year, ConocoPhillips produced 97 million cubic feet of gas per day in 2008, down 11.8 percent from the 110 million cubic feet per day produced in 2007.
ConocoPhillips saw prices increase for Alaska natural gas for the quarter and the year. On average, the company sold Alaska natural gas for $4.90 per thousand cubic feet in the fourth quarter of 2008, up from a price of $4.12 per mcf over the same period of 2007.
That jump came as natural gas prices plummeted around the country. As a result, the price ConocoPhillips received for Alaska natural gas was slightly higher than the Lower 48 average price of $4.76 per mcf ConocoPhillips saw in the fourth quarter of 2008.
For decades, Alaska natural gas has typically been cheaper than the Lower 48 average.
For the year, ConocoPhillips sold Alaska natural gas for an average price of $4.38 per mcf in 2008, up from an average price of $3.68 per mcf in 2007, but still much lower than the average price of $7.71 per mcf seen across the Lower 48 in 2008.
In the fourth quarter in 2008, ConocoPhillips sold an average of 74 million cubic feet of liquefied natural gas per day from its export facility on the Kenai Peninsula, down from 78 million cubic feet per day sold during the fourth quarter of 2007. For the year, ConocoPhillips averaged 74 million cubic feet per day in LNG sales, down from 85 million cubic feet per day sold in 2007.
Average LNG prices rose from $6.21 per mcf in 2007 to $7.62 per mcf in 2008.
ConocoPhillips spent $45 million on exploration charges in Alaska in the fourth quarter of 2008, up from the $26 million spent over the same period in 2007. For the year, the company spent $100 million on exploration charges, down from $106 million in 2007.
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