ConocoPhillips Reports Fourth-Quarter Net Income of $4.4 Billion
ConocoPhillips reported fourth-quarter net income of $4,371 million, or $2.71 per share. This compared with $3,197 million, or $1.91 per share, for the same quarter in 2006. Revenues were $52.7 billion, versus $41.5 billion a year ago.
"During the fourth quarter, our upstream business produced 2.26 million BOE per day, including our share of LUKOIL’s production," said Jim Mulva, chairman and chief executive officer. "In the downstream business, our worldwide refining crude oil capacity utilization rate improved to 95%.
"We ended the quarter with debt of $21.7 billion, a debt-to-capital ratio of 19% and a cash balance of $1.5 billion. During the quarter, we repurchased $2.5 billion of ConocoPhillips common stock, funded $4.3 billion of our capital program, reduced debt by $0.2 billion, and paid $0.7 billion in dividends.This was accomplished using $6.9 billion of cash generated from operations and $0.5 billion in proceeds from asset dispositions."
For 2007, net income was $11,891 million, or $7.22 per share, including a second-quarter, after-tax impairment of $4,512 million in the Exploration and Production segment related to the expropriation of the company’s Venezuelan oil projects. Earnings for 2007 adjusted for the Venezuela impairment were $16,403 million, or $9.97 per share, versus net income of $15,550 million, or $9.66 per share, for 2006. Revenues were $187.4 billion, versus $183.7 billion a year ago.
E&P fourth-quarter net income was $2,608 million, compared with third-quarter net income of $2,082 million, and fourth-quarter 2006 net income of $2,087 million.
Daily production from the E&P segment, including Canadian Syncrude and excluding the LUKOIL Investment segment, averaged 1.84 million barrels of oil equivalent (BOE) per day, an increase from 1.76 million BOE per day in the previous quarter, and a decrease from 2.05 million BOE per day in the fourth quarter of 2006.
The production decrease from the fourth quarter of 2006 was primarily due to expropriation of the company’s Venezuelan oil projects, ConocoPhillips’ exit from Dubai, the effect of asset dispositions, planned maintenance in the Timor Sea, and unplanned downtime in Nigeria.
E&P net income for 2007 was $4,615 million, or earnings of $9,127 million adjusted for the second-quarter 2007 Venezuela impairment. This compared with $9,848 million of net income for 2006.
LUKOIL Investment segment net income was $649 million in the fourth quarter, up from $387 million in the previous quarter and $302 million in the fourth quarter of 2006. The results include ConocoPhillips’ estimated equity share of OAO LUKOIL’s (LUKOIL) income for the fourth quarter based on market indicators and LUKOIL’s publicly available operating results. ConocoPhillips estimated its equity share of LUKOIL production was 426,000 BOE per day and its share of LUKOIL daily refining crude oil throughput was 227,000 barrels per day.
Net income for 2007 was $1,818 million, up from $1,425 million in 2006.
"We had another solid quarter, which contributed to a strong year in terms of operating performance and market conditions, enabling us to achieve positive financial results," Mulva said. "We are delivering on our commitments, and we remain focused on continuous improvement in all of our operations.
"Before year-end, ConocoPhillips acquired a 50% equity interest in the Keystone crude oil pipeline. This pipeline will play a critical role in supplying North American crude oil to refineries in the U.S. mid-continent region. In addition, we signed a Memorandum of Understanding with Qatar Petroleum International to pursue and develop international energy projects outside of Qatar, which represents an exciting opportunity for both companies.
"ConocoPhillips also recently announced its decision to join and support the World Bank’s Global Gas Flaring Reduction partnership. We are committed to minimizing the environmental impact and improving the energy and material efficiency of our operations, and are confident this partnership will lead to major progress in reducing gas flaring around the world.
"We look forward to discussing our 2008 capital and operating plans in greater detail when we meet with the investment community on March 12 in New York."
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