in fourth-quarter 2017, compared with $357 million a year
earlier. The decrease in earnings was largely due to lower
margins on refined product sales. Foreign currency effects
had an unfavorable impact on earnings of $115 million between periods.
ConocoPhillips reports full-year,
4Q earnings gains
ConocoPhillips recorded fourth-quarter 2017 earnings of
$1.6 billion, up from third-quarter 2017 earnings of $400
million (OGJ Online, Oct. 26, 2017), and up from the fourth-quarter 2016 net loss of $35 million. Full-year earnings were
a net loss of $0.9 billion compared with a full-year 2016 net
loss of $3.6 billion.
Benefits from US tax reform, higher realized prices, and
the $337-million settlement of Ecuador arbitration were primary drivers of the jump in earnings quarter-over-quarter,
the company said. For the quarter, cash provided by operating activities was $2.5 billion, exceeding $1.5 billion in
capital expenditures and investments and $300 million in
dividends. Also in the fourth-quarter, ConocoPhillips re-paid debt of $1.3 billion, repurchased $1 billion in company
stock, sold $800 million of short-term investments, and received $100 million in asset sale proceeds.
Production for the fourth quarter, excluding Libya, was
1.219 million boe/d, a decrease of 360,000 boe/d compared
with fourth-quarter 2016. Excluding the impact of dispositions, underlying production increased 45,000 boe/d, or 4%.
Production from Libya was 37,000 boe/d.
Full-year 2017, cash from operating activities was $7.1
billion, exceeding $4.6 billion in capital expenditures and
investments and dividends of $1.3 billion. The company received cash proceeds from asset dispositions of $13.9 billion,
paid $7.9 billion to reduce debt, repurchased stock for $3
billion reducing ending share count by 5% year-over-year,
purchased a net $1.8 billion in short-term investments, and
contributed $600 million to the US pension fund. At yearend, ConocoPhillips has $6.3 billion of cash and cash equivalents, $1.9 billion of short-term investments, and held 208
million shares of Cenovus Energy. The company ended the
year with debt of $19.7 billion.
Production excluding Libya for 2017 was 1.356 million
boe/d compared with 1.567 million boe/d for the same period in 2016. Excluding the impact of dispositions, underlying
production increased 32,000 boe/d, or 3%. The increase was
due to major projects, development programs and improved
well performance, which offset normal field decline, ConocoPhillips said. Production from Libya was 21,000 boe/d.
billion in the year-ago period.
Full-year 2017 earnings were $9.2 billion compared with a
loss of $497 million in 2016. Included in 2017 were noncash
provisional tax benefits of $2.02 billion related to US tax reform, gains on asset sales of $1.44 billion, and impairments
and other noncash charges of $840 million. Foreign currency
effects decreased earnings in 2017 by $446 million.
The company achieved its goal of being cash flow positive through a reduction in capital expenditures, a lower cost
structure, the start and ramp-up of projects, and planned asset sales, said Chairman and Chief Executive Officer Michael
Wirth. “Higher commodity prices helped as well,” he said.
In 2017, the company replaced 150% of the reserves it
produced, with the largest additions coming from the Permian basin in the US and the Gorgon project in Australia.
“Our net oil-equivalent production grew by 5% in 2017,
including the effects of asset sales,” Wirth said. “Importantly,
we expect that our 2018 production will continue to grow by
4-7%, driven primarily by Australian LNG and the acceleration of development activities in the Permian, where investment economics continue to improve.”
Wirth added, “In the downstream, we made significant progress on our growth investments.” Chevron Phillips Chemical Co. LLC achieved start-up of two polyethylene units and reached mechanical completion of an ethane
cracker at its US Gulf Coast Petrochemicals Project in Texas.
Worldwide net oil-equivalent production was 2.74 million b/d in fourth-quarter 2017 compared with 2.67 million
b/d from a year ago. Net oil-equivalent production for the
full year 2017 was 2.73 million b/d compared with 2.59 million b/d from the prior year.
US upstream operations earned $3.69 billion in fourth-quarter 2017 compared with earnings of $121 million from
a year earlier. The improvement reflected a benefit of $3.33
billion from US tax reform along with higher crude oil realizations, partially offset by the absence of gains on fourth-quarter 2016 asset sales.
International upstream operations earned $1.6 billion in
fourth-quarter 2017 compared with $809 million a year ago.
The increase in earnings was mainly due to higher crude oil
realizations and higher natural gas sales volumes, partially
offset by higher depreciation expense associated with higher
production. Foreign currency effects had an unfavorable impact on earnings of $20 million between periods.
US downstream operations earned $1.2 billion in fourth-quarter 2017 compared with breakeven a year earlier. The increase was primarily due to a $1.16 billion benefit from US tax
reform. Also contributing to the increase were higher margins
on refined product sales primarily reflecting the absence of
fourth quarter 2016 planned turnaround activity at the Richmond refinery, and lower operating expenses. Partly offsetting
these effects were impacts from Hurricane Harvey at Chevron
Phillips Chemical Co.’s Cedar Bayou, Tex., petrochemical plant.
International downstream operations earned $84 million