Even with the hit, high oil prices helped the company earn $2.255 billion in income from exploration and production activities in Alaska in 2007, a $92 million drop from the $2.347 billion earned in 2006.

In the fourth quarter of 2007, ConocoPhillips earned $448 million from exploration and production in Alaska, a 4.6 percent drop over the $470 million earned in the fourth quarter of 2006.

Company-wide, ConocoPhillips earned around $4.4 billion across its global operations in the fourth quarter, a nearly $700 million increase over the third quarter of the year and an increase of more than $1.1 billion over the fourth quarter of 2006.

But CEO Jim Mulva said it could have been higher.

“The fourth quarter earnings were negatively impacted by the effect of the tax changes in Alaska, which increased our production taxes,” Mulva said during a conference call with investors.

The tax, dubbed Alaska’s Clear and Equitable Share, increased the base tax rate from 22.5 percent to 25 percent and, among other things, limited certain deductions and added several retroactive elements.

Of the $234 million after tax impact, $95 million applied to earlier reporting periods as a result of the retroactive elements of the tax.

“We also had increased production taxes in the fourth quarter, the result of higher crude oil prices and production volumes,” Mulva said. “The majority of this is related to Alaska.”

See full story in the Jan. 27 issue of Petroleum News, available online at noon, Jan. 25, at www.PetroleumNews.com.