ConocoPhillips' fourth-quarter earnings fell 58% as commodity prices fell and as the exploration and production company was hurt by lower average realized prices for oil and natural gas.
"We achieved our production targets, continued to successfully execute our growth projects and drilling programs, and announced significant progress on our asset disposition program," said Chairman and Chief Executive Ryan Lance. "Our quarterly production from continuing operations is growing and we delivered strong organic reserve replacement."
Conoco is in the midst of a three-year plan aimed at improving its balance sheet and focusing on more-profitable, unconventional fields in North Dakota, Texas and other plays throughout North America. The company spun off its refining, pipeline and chemicals business as Phillips 66 (PSX) during May.
Including its recent deal to sell some properties in Montana and North Dakota to Denbury Resources Inc. for $1.05 billion, Conoco had announced total asset sales of about $12 billion since the beginning of 2012, far exceeding the company's stated goal of $8 billion to $10 billion in asset sales by the end of 2013.
ConocoPhillips reported a profit of $1.43 billion, or $1.16 a share, down from $3.39 billion, or $2.56 a share, a year earlier. Excluding disposition-related impairments, discontinued operations and other items, adjusted earnings fell to $1.43 a share from $1.55 a share. The company said adjusted earnings fell primarily due to lower commodity prices.
The latest period included a loss of 32 cents a share from discontinued operations, while the year-ago period included income of $1.61 from discontinued operations. Conoco also noted that its recent agreements to dispose of interests in the Kashagan Field and the Algeria and Nigeria business units, which have been reported as discontinued operations, hurt adjusted earnings by two cents a share in the latest period.
Sales and other operating revenues slipped 2.4% to $15.57 billion. Analysts polled by Thomson Reuters most recently projected earnings of $1.42 on revenue of $13.31 billion.
Production from continuing operations edged up 1.8% to 1.566 million barrels of oil equivalent a day. The company said the increase was primarily due to new production from major projects and drilling programs, as well as higher production in Libya and China. Average realized prices for crude oil fell 2.7% and for natural gas slipped 1.5%.
Earlier on Wednesday, Phillips 66 reported that fourth-quarter earnings fell 65% amid a $564 million investment write-down and weaker revenue, masking the benefits of stronger refining and chemical margins.
Copyright (c) 2012 Dow Jones & Company, Inc.
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