Mixed Bag For ConocoPhillips: Q3 Production Gains Amidst Earnings Pressure

Author: Lekha Gupta | August 01, 2024 08:45am

ConocoPhillips (NYSE:COP) shares are trading higher after the company released second-quarter 2024 results.

Here’s a breakdown of the report.

• Revenue of $14.136 billion missed the consensus of $14.919 billion
• Adjusted EPS of $1.98 missed the consensus of $1.96. 
• Operating cash flow stood at $4.9 billion.
• $3 billion of capital expenditures and investments funded.
• $900 million in ordinary dividends and VROC paid.
• Repurchased $1 billion of shares.
• Quarter ended with $6.3 billion in cash and short-term investments and $1 billion in long-term investments.

Dividend: ConocoPhillips declared a quarterly ordinary dividend of 58 cents per share and a VROC of 20 cents per shar. Both are payable on Sept. 3, 2024, to stockholders of record as of Aug. 12, 2024.

Outlook: The company produced 1,945 thousand barrels of oil equivalent per day (MBOED). That’s an increase of 140 MBOED from the same period a year ago.

Lower 48 production averaged 1,105 MBOED, which includes 748 MBOED from the Permian, 238 MBOED from the Eagle Ford, and 105 MBOED from the Bakken assets. The average realized price rose 4% Y/Y to $56.56 per barrel of oil equivalent (BOE).

ConocoPhillips projects third-quarter production of 1.87 to 1.91 million barrels of oil equivalent per day (MMBOED), which includes around 90 MBOED of turnaround impacts across Canada, Lower 48, Alaska, Norway, Malaysia, and Qatar.

The company revised the outlook for FY24 production to 1.93 to 1.94 MMBOED (from 1.91 to 1.95 MMBOED) and capital expenditures guidance to about $11.5 billion (from $11.0 to $11.5 billion earlier).

Ryan Lance, chairman and chief executive officer, touted “record production” and the advancement of a “global LNG strategy.”

“We announced a 34% increase in our ordinary dividend starting in the fourth quarter and remain committed to returning at least $9 billion of capital for 2024,” he added.

What’s Next: The “previously announced plan to acquire Marathon Oil is progressing,” Lance said. The deal should close late in the fourth quarter.

Investors can gain exposure to the COP stock via Westwood Salient Enhanced Energy Income ETF (NASDAQ:WEEI) and IShares U.S. Oil & Gas Exploration & Production ETF (BATS:IEO).

Price Action: COP shares are up 0.72% at $112.00 premarket at the last check Thursday.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Posted In: COP IEO WEEI