ConocoPhillips Slips To Loss In Q3; Cuts 2015 Capex

(RTTNews) - ConocoPhillips (COP) reported a net loss for the third-quarter 2015, reflecting termination of a rig contract for a Gulf of Mexico deepwater drillship, non-cash impairments, restructuring costs and pension settlement expense. The company has reduced its 2015 capital expenditures guidance and operating cost guidance.

The company has further reduced its 2015 capital expenditures guidance to $10.2 billion compared with initial 2015 guidance of $11.5 billion. The company has also reduced 2015 operating cost guidance to $8.2 billion compared with initial guidance of $9.2 billion. For both capital and operating costs, approximately half of these reductions are due to market factors, while the remainder are the result of discretionary actions to lower costs.

Corporate segment net expense has been reduced to $0.8 billion. Guidance for depreciation, depletion and amortization of $9.0 billion, and exploration dry hole and leasehold impairment expense of $0.8 billion are unchanged. Guidance excludes any special items.

"We are on track to deliver seven major project startups and exceed our volume targets for the year. We are exercising flexibility in our capital program, dramatically lowering our cost structure and divesting assets that do not compete for funding in our portfolio. These steps will make us more flexible and resilient for the future. We remain committed to a compelling dividend, affordable growth and strong financial performance," said Ryan Lance, chairman and chief executive officer.

Fourth-quarter production guidance is 1,585 to 1,625 MBOED. Full-year 2015 production guidance is 1,585 to 1,595 MBOED, resulting in expected year-over-year growth of 3 to 4 percent from continuing operations, excluding Libya.

Net loss for the third-quarter 2015 was $1.1 billion or $0.87 per share, compared with third-quarter 2014 earnings of $2.7 billion or $2.17 per share.

Excluding special items, third-quarter 2015 adjusted earnings were a net loss of $466 million, or $0.38 per share, compared with third-quarter 2014 adjusted earnings of $1.6 billion, or $1.29 per share. Analysts polled by Thomson Reuters expected the company to report a loss of $0.38 per share for the quarter. Analysts' estimates typically exclude special items.

Adjusted results were lower compared with third-quarter 2014 primarily due to lower realized prices. The company's total realized price was $32.91 per barrel of oil equivalent (BOE), compared with $64.78 per BOE in the third quarter of 2014, reflecting lower average realized prices across all commodities.

Special items for the quarter resulted in after-tax impacts of $246 million from the termination of a rig contract for a Gulf of Mexico deepwater drillship, $195 million from non-cash impairments in the Lower 48 and Asia Pacific and Middle East segments, $156 million from restructuring costs, $56 million of pension settlement expenses and a $48 million decrease in depreciation from a third-quarter revision in the Lower 48.

Production from continuing operations, excluding Libya, for the third quarter of 2015 was 1,554 MBOED, an increase of 81 MBOED compared with the same period a year ago. Growth was primarily due to new production from major projects and development programs, partially offset by normal field decline. The net increase in production reflects 56 MBOED, or 4 percent growth, after adjusting for 25 MBOED from dispositions and downtime.