Conoco quarterly profit dips, but beats estimates

HOUSTON, Thu Oct 25, 2012 – ConocoPhillips reported a lower third-quarter profit on Thursday that beat analysts’ estimates, as it produced more crude than expected from high-margin fields such as the Eagle Ford and Bakken.

Shares of the U.S. oil and gas company rose 2 percent to $57.11 in premarket trading.

Conoco and other large oil companies like Exxon Mobil Corp. have been investing more heavily in North American shale formations like the Eagle Ford in south Texas and the Bakken in North Dakota in a bid to boost higher-priced oil production.

“The ramp up in the Eagle Ford is on track or exceeding the market’s expectations,” said Fadel Gheit, oil analyst at Oppenheimer. “They delivered on everything they said they would, and more.”

Third-quarter profit was $1.8 billion, or $1.46 per share, compared with $2.6 billion, or $1.91 per share, in the same period a year earlier.

Excluding items related to asset sales and taxes, the Houston-based company had a profit of $1.44 per share. Analysts on average had expected $1.19.

Oil and gas output in the quarter was 1.53 million barrels of oil equivalent per day, down from 1.54 million a year earlier. Analysts at Barclays had forecast 1.52 million BOE per day.

Conoco said its fourth-quarter production will increase on a sequential basis, as the company speeds the pace of drilling in the Eagle Ford and more output is expected from its Canadian oil sands properties.

ConocoPhillips restarts LNG exports from Alaska going to Japan

ANCHORAGE, Alaska, Thu Jun 14, 2012 – ConocoPhillips has resumed shipments of liquefied natural gas from its Alaska plant, an aged facility that was previously targeted for closure, a company spokeswoman said Wednesday.

The company sent a shipment of LNG last month to Japan, spokeswoman Natalie Lowman said.

ConocoPhillips expects to deliver four or five cargoes of Alaska LNG this year, all of them to Japan, Lowman said. However, she said she could not disclose the customer.

The plant, in the Kenai Peninsula community of Nikiski, is the only LNG export facility in the United States. It began operations in 1969, supplying LNG to Tokyo Gas and Tokyo Electric for most of its operating life.

In early 2011, ConocoPhillips and partner Marathon announced plans to close the facility, citing failure to strike a shipping contract with the Tokyo utilities and difficulties in securing natural gas supplies from the mature Cook Inlet basin.

But new demand for Alaska LNG emerged in the aftermath of Japan’s massive earthquake and tsunami last year that wrecked the Fukushima nuclear power plant.

ConocoPhillips in September bought Marathon’s 30 percent share in the plant and now has full ownership of the facility.

The LNG plant was closed over the winter. The May shipment was the first since last fall.

Plans for the LNG plant beyond 2012 are unclear, Lowman said.

ConocoPhillips profit dips on output decline after oil leak trims output

HOUSTON, Mon Apr 23, 2012 – ConocoPhillips reported a drop in quarterly profit as asset sales and the shutdown of its operations in China after an oil leak there trimmed its oil output.

Net profit at the company, which will split into two separate businesses at the end of the month, fell to $2.9 billion, or $2.27 per share, compared with $3 billion, or $2.09 per share, in the year-earlier quarter.

Excluding $330 million of special items, first-quarter 2012 adjusted earnings were $2.6 billion.

ConocoPhillip’s Garland won’t comment on Trainer

HOUSTON, Mon Apr 9, 2012 – The chief executive officer of ConocoPhillips’ newly minted downstream spinoff told analysts in its inaugural conference call that he would not comment on negotiations for the sales of its 185,000 barrel per day refinery in Trainer, Pa.

CEO Greg Garland said the new company will continue to shore up its refining portfolio and there may be additional portfolio actions in addition to the two refineries currently on the sales block – Trainer and Alliance in Louisiana.

Conoco extends Trainer sale deadline due to interest

NEW YORK, Wed Mar 28, 2012 – ConocoPhillips said on Wednesday it had extended the sale deadline for its 187,000-barrels-per-day refinery in Trainer, Pennsylvania to the end of May because of recent interest from potential buyers.

“Due to recent interest from potential buyers, we are extending the sales process deadline to the end of May to allow more time for discussions to take place,” said Rich Johnson, a spokesman for the company.

ConocoPhillips shut the refinery late last September and put it up for sale. The original sales deadline was March 31.

ConocoPhillips names insiders to head new oil and gas production and refining units

HOUSTON ― Integrated oil major ConocoPhillips named two company insiders on Friday to head its oil and gas production and refining units, whose separation is expected to be completed in the second quarter of next year.

Houston-based ConocoPhillips said in July it would spin off its refining arm from its exploration and production operations, abandoning an integrated model for two companies whose sole focuses will be on their own specific businesses.

Ryan Lance, 49, senior vice president of ConocoPhillips’s international exploration and production business since May 2009, will become chairman and chief executive of the upstream company, which will keep the name ConocoPhillips and be headquartered in Houston.Greg Garland, 53, former president and CEO of joint-venture Chevron Philips Chemical Co who has run ConocoPhillips’ exploration and production business in the Americas for a year, will be the chairman and chief executive of the refining, chemical and pipeline company.

ConocoPhillips has yet to announce a name for the downstream company or its headquarters location.

ConocoPhillips Chief Executive Jim Mulva, 65, will retire when the split is complete.

The appointments surprised some analysts, who had expected former Exxon Mobil Corp exploration executive Alan Hirshberg to run the upstream company and Willie Chiang, current head of the refining arm, to run that company.

ConocoPhillips brought in Garland to oversee exploration and production and Hirshberg to head planning and strategy a year ago in a management shake-up that included the retirement of former Chief Operating Officer John Carrig, who had been seen as Mulva’s successor.

ConocoPhillips spokesman John Roper said Chiang would continue as senior vice president of refining, marketing, transportation and commercial in the downstream company, while Hirshberg would remain senior vice president of planning and strategy in the upstream company.

Deutsche Bank analyst Paul Sankey said in a note that Hirshberg is likely “locked up” at the company, “but we believe that Chiang sees himself as a future CEO, and he would have to find that role in a different company.”

Brian Youngberg, an analyst with Edward Jones, said Lance’s background as a petroleum engineer puts a leader in operations at the top, rather than a leader from a finance and treasury background like Mulva.

And Garland’s experience running the chemical company as well as a long tenure as a project engineer at Phillips Petroleum brings a wider view including chemicals, the likely growth engine for the downstream company, Youngberg said.

Youngberg said ConocoPhillips will continue to de-emphasize refining over time, so “having someone with a broader background like Garland makes sense.”

Lance has been with ConocoPhillips, predecessor Phillips Petroleum and various divisions of ARCO for 26 years, ConocoPhillips said.

Garland was the president and chief executive of Chevron Phillips, a joint venture of ConocoPhillips and Chevron , from 2008 through 2010. He has been associated with ConocoPhillips, its predecessors and affiliated companies for 31 years, starting as a project engineer with Phillips Petroleum.

ConocoPhillips oil company to split into two; shares rise

NEW YORK/HOUSTON ― ConocoPhillips will split itself into two by spinning off its refining arm in a bet that each operation would be worth more as a separate company, it said on Thursday.

Shares of ConocoPhillips, the third-largest U.S. oil company, rose as much as 7.5 percent on the news.

The split will create the largest refining company in the United States based on capacity and the largest exploration and production company by far based on oil and gas reserves.

With the move, ConocoPhillips becomes the first of the so-called super majors to shift away from the strategy that led the industry to consolidate into a handful of players with global reach in the oil and gas production and oil products businesses.

ConocoPhillips’ move comes just two weeks after smaller peer Marathon Oil Co. spun off its refining arm into Marathon Petroleum Corp., and analysts said it could help close a valuation gap with other energy companies.

“We believe more value is created in the formation of two very clear stand-alone companies,” Chief Executive Jim Mulva told analysts on a conference call.

Two separate companies will allow their management teams to focus more intently on running their businesses, as well as allow investors a choice, Mulva said.

Mulva “built this company in a different commodity price environment and different outlook,” said Barrow, Hanley, Mewhinney & Strauss Inc analyst and portfolio manager R. Lewis Ropp, “and now we have an opportunity to separate back and really get peer group multiples that are much higher than the integrated multiples investors are assigning to the company.”

The split should unlock value in the exploration and production business, which is very undervalued, said Ropp, who is a long-time owner of ConocoPhillips shares.

Over the past two years, ConocoPhillips has embarked on a massive portfolio shift to sell up to $17 billion in assets and reduce its debt load, while aggressively buying back shares and increasing its dividend.

The plan to return cash to shareholders will continue at both companies. The exploration company will contemplate share repurchases in 2012, when the split is expected to be complete, while both companies will pay a dividend, Mulva said.

Strategies at both companies will remain the same, the executive told analysts.