ConocoPhillips Profit Down, but Revenue Buoyed by Gas Prices

ConocoPhillips (COP) said first-quarter profit slipped, but revenue rose, boosted by higher average selling prices for natural gas and increased production at its continuing operations, excluding Libya.

ConocoPhillips reported a profit of $2.12 billion, or $1.71 a share, down from $2.14 billion, or $1.73 a share, a year earlier. Excluding the impact of asset sales and other items, adjusted earnings from continuing operations rose to $1.81 from $1.42. Total revenue and other income increased 9.5% to $16.05 billion.

Analysts polled by Thomson Reuters expected per-share profit of $1.56 and revenue of $15.13 billion.

The oil and gas production and exploration company has been selling noncore assets to focus on those with higher returns, such as U.S. shale formations, which have been fueling a drilling boom.

"Our operational performance was strong and our margins continued to grow," Chairman and Chief Executive Ryan Lance said on Thursday. "Production increased due to strong performance in our North American unconventional plays, ongoing growth in our Canadian liquids and major project ramp ups in the Europe segment."

ConocoPhillips late last year said it plans to spend $16.7 billion on capital projects in 2014, with the bulk of it directed toward continuing oil and gas production in North America.

ConocoPhillips said about 39% of the budget will be directed to development-drilling programs. Most of that portion will be spent on U.S. formations such as Eagle Ford and Permian Basin in Texas and Bakken in North Dakota, among others. In the latest reporting period, combined production in Eagle Ford and Bakken rose 41%.

Conoco also from benefited from marketing third-party natural gas, which contributed $100 million of after-tax income.

Production from continuing operations, excluding Libya, rose 24% on an oil-equivalent basis during the quarter. Total average realized prices increased 3.9% reflecting higher natural-gas, bitumen and natural-gas-liquids price that offset lower crude prices.

ConocoPhillips spun off its refining arm as Phillips 66 in 2012 as part of a multiyear revamp aimed at improving the company's finances.

Write to Tess Stynes at [e-mail]

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