ConocoPhillips restoring oil production as prices increase

Petroleum News

On June 30, Houston-based ConocoPhillips, parent of ConocoPhillips Alaska, said its global second quarter production curtailments were primarily related to oil and averaged approximately 225,000 barrels of oil equivalent net per day.

Approximately 65% of the curtailments were in the Lower 48, 15% were in Alaska and 15% were in the Surmont operation in Canada. The remainder of the second-quarter cuts were primarily in Malaysia.

Including impacts from curtailments and planned seasonal turnaround activity, the company expects to report second quarter production volumes of 960,00-980,000 barrels of oil equivalent daily. Excluding Libya, and adjusting for closed dispositions and curtailments, production in the second quarter is expected to be in line with the same period a year ago and approximately 5% below first quarter 2020.

“ConocoPhillips established a consistent set of criteria for evaluating and implementing economic curtailments during the recent weakness in netback oil prices,” said Ryan Lance, company chairman and CEO. “Due to our strong balance sheet, we were in an advantaged position to create value for shareholders by forgoing some production and cash flow in the second quarter in anticipation of receiving higher cash flows for those volumes in the future.”

ConocoPhillips said it continues to monitor netback pricing and evaluate curtailments across its operated assets on a month-by-month basis. It expects to begin restoring curtailed production in Alaska during the month of July, as reported in the June 14 issue of Petroleum News.

In the Lower 48 the company also expects to begin bringing some curtailed volumes back online during July and will continue to make economically driven production decisions at the asset level in the months ahead.

At Surmont, the company is planning to increase output from curtailed levels in third quarter.

Given ongoing variability and uncertainty, ConocoPhillips said it will continue to suspend forward-looking guidance and sensitivities.

- Petroleum News