Continuing a global trend, ConocoPhillips used rising commodities prices to overcome production declines and tax increases and post $603 million in net income from its operations in Alaska in the first quarter of the year, nearly 19 percent more than the first quarter of 2007.
Companywide for the quarter, the Houston-based major earned $4.1 billion in net income.
Crude oil production in Alaska dropped nearly 8 percent quarter-over-quarter to 254,000 barrels per day in the first three months of the year. Natural gas production in the state dropped 18 percent over the first quarter of 2007 to 100 million cubic feet per day.
ConocoPhillips sold that oil for $89.07 per barrel on average, up 45 percent from the average sale price in the first quarter of last year.
Sales at the liquefied natural gas facility on the Kenai Peninsula dropped nearly 40 percent quarter-over-quarter to 63 million cubic feet per day. However, ConocoPhillips recovered some of that loss through increased sales prices, which jumped 13.2 percent to $6.72 per thousand cubic feet. The average price of natural gas in Alaska rose slightly to $4.31 per mcf, up from $4.19 per mcf over the same period last year.
ConocoPhillips spent less money exploring Alaska in the first quarter of the year, even as the company spent considerably more money exploring other parts of the world.
So far in 2008, ConocoPhillips has spent $11 million looking for oil and gas in Alaska, down from the $17 million spent by this same time last year. Companywide in the first quarter of the year, ConocoPhillips spent $309 million on exploration costs, up 15.2 percent over the same period last year.
The first quarter results cover a busy time for ConocoPhillips. In February, the company bid several million dollars for the right to drill in the Chukchi Sea, and earlier this month the company announced a partnership with BP to build a natural gas pipeline from the North Slope to markets in the Lower 48 through Canada.
Editorís note: See story in May 4 issue of Petroleum News, available to subscribers online at noon, Friday, May 2, at www.petroleumnews.com.