ConocoPhillips posts smaller Q4 loss, boosts 2021 spending as oil steadies
ConocoPhillips reported a smaller-than-expected quarterly loss, thanks to steadying crude prices that also saw the top U.S. independent oil producer raise its capital budget for 2021.
Crude oil prices are holding on to gains from a rebound in late-2020 after a coronavirus-induced slump, with Brent crude hovering around $58 per barrel on Tuesday.
ConocoPhillips, which completed its $13.3 billion takeover of rival Concho Resources in January, the biggest pure shale acquisition since 2011, set a $5.5 billion spending budget for 2021, much of which will be used to sustain current production.
Only about $400 million will be invested in major projects, primarily in Alaska, and ongoing exploration appraisal activity, the company said.
Fourth-quarter results plus initial outlook highlights continued improvements in the cost structure and synergies related to the Concho merger, RBC Capital Markets said.
ConocoPhillips anticipates entering 2022 at an annual adjusted operating cost run rate of about $6 billion.
Shares in the company were up 3.5% in morning trade.
While some shale drillers have restored volumes as prices have seen a recovery, producers are still wary of increasing output, as rising coronavirus infections and new travel restrictions in some parts of the world have dampened demand forecasts.
On a sequential basis, fourth-quarter production excluding Libya climbed 7.3% to 1.1 million barrels of oil equivalent per day. Average realized price was $33.21 per barrel of oil equivalent, 7% higher than the third quarter.
The company's net loss widened to $772 million from $450 million.
Excluding non-cash impairments in Alaska and Lower 48, it posted a loss of 19 cents per share, while analysts were expecting a loss of 28 cents per share, according to Refinitiv IBES data.
ConocoPhillips earned a profit of $720 million in the year-ago quarter. (Reporting by Arundhati Sarkar in Bengaluru; Editing by Vinay Dwivedi)
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