ConocoPhillips earned $490 million in Alaska in the second quarter of the year, up nearly 30 percent from the $381 million the company earned during the same period in 2010.
The company earned $327 million in the Lower 48 during the quarter.
Companywide, ConocoPhillips earned $3.4 billion during the quarter, up from $3 billion in the first quarter but down from $4.1 billion earned in the second quarter of 2010.
That bump in profits is largely the result of higher commodity prices.
ConocoPhillips reported an average price of $113.75 per barrel for Alaska North Slope crude oil during the quarter compared to $77.99 per barrel for Lower 48 crude oil.
Those higher prices not only brought higher profits but also higher taxes. Because of a progressivity feature that increases the tax rate as oil prices increase ConocoPhillips paid almost $500 million in production taxes in Alaska in the first quarter, but almost $800 million in the second quarter, according to Chief Financial Officer Jeff Sheets.
Alaska natural gas prices continue to diverge from national trends. ConocoPhillips reported an average price of $4.66 per thousand cubic feet during the second quarter in Alaska, compared to $4.22 per mcf in the Lower 48. But while Alaska prices fell from $4.76 per mcf during the second quarter of 2010, they increased in the Lower 48, where the company reported earning $3.93 per mcf during the second quarter of 2010.
Aside from the large bump in prices, though, ConocoPhillips also reported a rare bump in liquids production in Alaska, not only year over year, but also quarter over quarter.
The company produced 223,000 barrels per day during the second quarter of this year, up from 214,000 bpd in the first quarter and 221,000 bpd in the second quarter of 2010. By comparison, ConocoPhillips produced 160,000 bpd of crude oil and natural gas liquids in the Lower 48 during the second quarter, roughly equally to the second quarter of 2010.
ConocoPhillips expects increased maintenance in Alaska in the third quarter, Sheets said.
Natural gas production down
Natural gas production fell sharply year over year. ConocoPhillips produced 62 million cubic feet per day in Alaska in the second quarter, down from 82 million cubic feet per day during the second quarter in 2010. Although increasingly focusing on liquids, ConocoPhillips is primarily a natural gas company in the Lower 48 and produced 1.6 billion cubic feet per day during the second quarter, down from 1.7 bcf per day in the second quarter of 2010.
That drop in Alaska production is largely attributable to the slowdown and eventual closing of the liquefied natural gas export facility in Nikiski over the past year.
ConocoPhillips sold 18 million cubic feet per day of LNG from Alaska in the second quarter of the year, down from 51 million cubic feet per day in the second quarter of 2010. The company also received lower prices for that LNG, reporting an average price of $9.95 per mcf in the second quarter vs. $12.08 per mcf for the second quarter of last year.
Of the $108 million in exploration charges ConocoPhillips reported in the United States during the second quarter, the company charged $6 million for work in Alaska.
ConocoPhillips also reported $151 million in depletion, depreciation and amortization in Alaska during the second quarter, roughly equal to the second quarter of last year.
