Dry Holes Increase ConocoPhillips 2002 Loss
ConocoPhillips reports that results from exploratory drilling in Alaska and the deepwater Gulf of Mexico resulted in two dry holes. The McCovey well, located on Alaska's North Slope, began drilling in November 2002 and reached total depth on Jan. 27, 2003. The Voss deepwater well, located in Keathley Canyon Block 511 in the Gulf of Mexico, began drilling in September 2002 and reached total depth on Feb. 7, 2003. Neither well encountered commercial quantities of hydrocarbons.
Because ConocoPhillips has not yet filed its 2002 financial statements with the U.S. Securities and Exchange Commission, accounting rules require that the company include the amount of dry hole costs incurred in 2002 in its 2002 financial results. As the final results of these two wells were not determined until February, dry hole charges were not included in the company's preliminary 2002 results announced Jan. 29, 2003. The dry hole costs of $18 million (after tax) for 2002 increased the company's net loss for 2002 to $295 million, or 61 cents per share. The remaining drilling costs on these wells incurred in 2003 will be charged to dry hole expense in the first quarter of 2003.