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    Conoco Shrinks Loss, and Reserves

Summary

Conoco managed to reduce losses in the latest quarter, but its year-end reserves were sharply down on a year earlier.

by: Mark Smedley

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Natural Gas & LNG News, Africa, Americas, Europe, Corporate, Litigation, Exploration & Production, News By Country, Australia, , Senegal, United Kingdom

Conoco Shrinks Loss, and Reserves

ConocoPhillips reported a 4Q2016 net loss of $35mn, an improvement from its $3.5bn net loss in the same quarter of 2015. The latest quarter benefited from gains on an asset sale in Senegal to Woodside. Excluding special items, 4Q net loss was $318mn, down from a year-before net loss of $1.1bn.

Full-year 2016 Conoco made a net loss of $3.6bn, only slightly less than its 2015 net loss of $4.4bn.

Preliminary year-end 2016 proved reserves are 6.4bn boe. Conoco said its reserve replacement ratio, net of disposals, is expected to be minus 194%.

Fourth quarter production excluding Libya was 1.587mn barrels of oil equivalent per day, 12,000 boe/d less than in 4Q 2015, with first production achieved at UK gas field Alder (26.3% equity) while development drilling continued in Norway’s Greater Ekofisk Area.

APLNG train 2 loaded its first cargo in Australia on October 10. Conoco and Australia's Origin each have 37.5% in the Queensland venture; China's state Sinopec has 25%. APLNG has a twin-train, 9mn mt/yr coalbed methane LNG complex. Train 1 shipped its first cargo on January 9 2016.

CEO Ryan Lance said: “For the second quarter in a row our cash from operating activities exceeded capital expenditures and dividends paid.” He also said Conoco’s cost structure was much lower. The company expects full-year 2017 production to be 1.54 to 1.57mn boe/d, excluding Libya.

The sale in Senegal to Woodside is contested by Australian independent FAR; it says a valid pre-emptive rights notice was not issued by Conoco.

Austria's OMV said February 2 it “restarted and expanded” production at Libya's Sirte and Sharara oilfields and expects to average 10,000 b/d in 2017.

 

Mark Smedley