ConocoPhillip has reported second-quarter earnings of $1,298 million, or $0.87 per share. This compared with earnings of $5,439 million, or $3.50 per share, for the same quarter in 2008. Revenues were $35.4 billion, versus $71.4 billion a year ago.
"Although we experienced significantly lower commodity prices and margins than in the second quarter of last year, we delivered solid operational results during the quarter," said Jim Mulva, chairman and chief executive officer. "E&P production was up 7 percent, and we realized cost reductions due to market forces and other improvements. During the second quarter, total production, including our share of LUKOIL, was 2.3 million BOE per day and our worldwide refining crude oil capacity utilization rate was 88 percent."
The company generated $2.6 billion in cash from operations during the quarter, funded a $2.9 billion capital program and paid $0.7 billion in dividends. As of June 30, 2009, debt was $30.4 billion, with a debt-to-capital ratio of 34 percent and a cash balance of $0.9 billion.
Exploration and Production (E&P)
Second-quarter financial results: The E&P segment reported second-quarter earnings of $725 million, compared with $3,999 million in the second quarter of 2008. The decrease was primarily due to the impact of significantly lower commodity prices, partially offset by higher volumes and lower operating costs. In addition, second-quarter 2009 included a noncash after-tax impairment of $51 million related to the expropriation of our assets in Ecuador, as well as an after-tax charge of $37 million for costs associated with platform damage suffered at the company's Ekofisk field in the North Sea.
Daily production from the E&P segment, including Canadian Syncrude, averaged 1.87 million barrels of oil equivalent (BOE) per day, 122,000 BOE per day higher than the second quarter of 2008. The increase was mainly due to new developments in the United Kingdom, Russia, Canada, Norway, China and Vietnam, which more than offset the impact of base field declines. Production also increased due to the impacts of royalties and production sharing contracts, as well as improved well performance and less unplanned downtime.
Six-month financial results: E&P earnings for the first six months of 2009 were $1,425 million, compared with earnings of $6,886 million during the first six months of 2008. The decrease was primarily due to the impact of significantly lower commodity prices, partially offset by higher volumes and lower operating costs.
Second-quarter financial results: The LUKOIL Investment segment had earnings of $682 million in the second quarter, compared with $774 million in the second quarter of 2008. The second-quarter 2009 results include ConocoPhillips’ estimated equity share of OAO LUKOIL's income based on market indicators, LUKOIL's publicly available operating results, and other publicly available information.
Second-quarter 2009 earnings were lower than second-quarter 2008 earnings primarily due to lower estimated realized prices, partially offset by lower estimated taxes and higher estimated volumes. In addition, second-quarter 2009 included a $192 million positive alignment of first-quarter estimated net income to LUKOIL's reported results, compared with a $120 million negative alignment in the same period of last year.
For the second quarter of 2009, ConocoPhillips estimated its equity share of LUKOIL production was 442,000 BOE per day and its share of LUKOIL daily refining crude oil throughput was 281,000 barrels per day.
Six-month financial results: Earnings for the first six months of 2009 were $730 million, compared with earnings of $1,484 million in the first six months of 2008. The decrease was primarily due to lower estimated realized prices, partially offset by lower estimated taxes and a net $328 million positive impact from the alignment of estimated net income to LUKOIL's reported results.
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