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ConocoPhillips suffers biggest earnings loss since ’08 crash

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ConocoPhillips reported its widest quarterly loss in more than six years as a crash in oil and natural gas prices tempered growth from Texas to Canada.

The largest major U.S. oil company without refining operations said it further reduced 2015 spending by $800 million for an anticipated total of $10.2 billion. ConocoPhillips lost $1.07 billion, or 87 cents a share in the third quarter, compared with a gain of $2.17 a share a year earlier, the Houston-based company said in a statement Thursday. It was the biggest loss since the fourth quarter of 2008.

The loss mirrored those of other major oil companies, including Royal Dutch Shell Plc, which reported a third-quarter net loss of $7.42 billion Thursday, the most in more than a decade. Exxon Mobil Corp. and Chevron Corp. report earnings Friday.

Chairman and Chief Executive Officer Ryan Lance has said ConocoPhillips will continue to support its dividend, which has a yield of about 5.6 percent and is among the highest for companies that explore for and produce oil and gas. Some analysts have questioned whether the company can continue to make those investor payments while funding new drilling and limiting spending to what it receives in cash from operations.

“That will be a challenge for them,” Brian Youngberg, an analyst at Edward Jones & Co. in St. Louis, said in an interview before the earnings release. “Operationally, they’re doing well with what they can control, but they can’t control prices.”

Asset Sales

ConocoPhillips is among producers that have turned to asset sales to help shore up their finances, pay dividends and continue drilling after oil fell by more than half and natural gas declined to the lowest level in more than three years.

Oil and gas production rose 5.5 percent to the equivalent of 1.55 million barrels a day. Excluding one-time items, the company lost 38 cents a share in the third quarter, in line with the 38-cent average of 21 analysts’ estimates compiled by Bloomberg.

Results were released before the start of regular trading in New York. ConocoPhillips, which has 14 buy, 12 hold and two sell ratings from analysts, rose 3.2 percent yesterday to $53.34. The shares have fallen 23 percent this year. The company will hold an earnings call today at noon New York time.
www.bloomberg.com

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