Lossmaker Conoco 'Turns Corner' in 2Q

US major ConocoPhillips racked up a $3.4bn loss in the second quarter, it said July 27.

That was three times its 2Q2016 loss of $1.1bn. However, impairments on legacy US shale asset sales made up much of its recent quarterly loss.

Adjusted earnings – a clearer indicator of business performance -- were positive $0.2bn, reversing a loss of $1bn in the year-ago quarter.

CEO Ryan Lance said: “This quarter highlights the significant progress we’ve made in transforming our company. In just six months we’ve exceeded the three-year plan we laid out in late 2016."

Special items in 2Q2017 were net charges of $3.62bn, included impairment of APLNG in Australia (some $2.4bn), US Lower 48 impairments including from its previously announced San Juan and Barnett disposals (some $2.5bn), offset by gains from its Canada divestment to Cenovus.

Production excluding Libya in 2Q2017 of 1.425mn barrels of oil equivalent per day (boe/d) was lower by 8% (0.121mn boe/d) on a year ago, but up 3% if the impact of closed and signed dispositions is excluded. Production in 2Q2017 from Libya was 12,000 boe/d.

Conoco foresees underlying production rising in full year 2017, having ended 2Q upstream turnarounds in Malaysia, Alaska, Europe, Canada and Australia, the latter including APLNG which completed a 90-day operational phase test to satisfy lenders, and loaded 60 LNG cargoes in 1H2017.

Conoco also said it expects to reach a total of $16bn of divestments during 2017, chiefly of western Canada oilsands to Cenovus (for $13.3bn) and its Lower 48 San Jean and Barnett shales.

Mark Smedley