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ConocoPhillips: No New Timeline for Arctic Drilling Program

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ConocoPhillips executives didn't give a new timeline for the company's Arctic drilling program during a conference call Thursday, after the company said earlier this month it wouldn't go forward this summer as it had planned.

Chief Financial Officer Jeff Sheets said the company will need more time to understand the regulatory framework before beginning work in the Chukchi Sea, off the coast of Alaska. He said drilling in 2015 is possible but not a sure thing.

The company didn't feel confident enough that it would be able to get the permits it needed to proceed with commitments for rigs and equipment, said Matt Fox, executive vice president for exploration and production.

"We just felt there wasn't enough stability in way the regulatory framework was shaping up for us to do that with confidence," Mr. Fox said.

ConocoPhillips will have to pay an $18 million cancellation fee to Noble Corp. to get out of its contract for a new jackup rig equipped to work in the Arctic, Noble said in a fleet update earlier this month.

The company didn't provide a timeline for a long-discussed sale of an interest in its Canadian oil-sands assets. Mr. Fox said there has been a lot of interest, but the company is still considering all its options. Mr. Sheets said it isn't likely a transaction will be completed this year.

A recent rise in natural gas prices isn't enough for ConocoPhillips to consider redirecting work toward drilling for natural gas rather than oil, the executives said. For that to happen, he said prices need to be "significantly north" of where they are now, and need to stay that way.

Planned turnarounds will have a significant impact on the company's production worldwide this year.

"This really is a big year for planned shutdowns," Mr. Fox said.

Copyright (c) 2012 Dow Jones & Company, Inc.

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