ConocoPhillips (COP) Tops Q3 EPS by 18c

ConocoPhillips (NYSE: COP) reported Q3 EPS of $1.36, $0.18 better than the analyst estimate of $1.18.

• Cash provided by operating activities was $3.4 billion. Excluding working capital, cash from operations of $3.5 billion exceeded capital expenditures, dividends and share repurchases by $0.6 billion.
• Third-quarter production excluding Libya of 1,224 MBOED; year-over-year underlying production excluding the impact of closed dispositions grew 6 percent overall and 28 percent on a production per debt-adjusted share basis.
• Year-over-year production from the Lower 48 Big 3 unconventionals grew by 48 percent.
• During the quarter, achieved first production from Bohai Phase 3 and from the final phase of drilling at Bayu-Undan. GMT-1 achieved first production in October.
• Ended the quarter with cash, cash equivalents and restricted cash totaling $3.9 billion and short-term investments of $0.9 billion, equating to $4.8 billion of ending cash and short-term investments.
• Repurchased $0.9 billion of common shares outstanding, bringing year-to-date repurchases to $2.1 billion.
• Reached a settlement agreement with PDVSA to fully recover an arbitration award of approximately $2 billion; recognized cash and commodities totaling $345 million in the quarter, with the remainder of the approximately $500 million in initial payments due in the fourth quarter.
• Announced Barnett and Greater Sunrise dispositions for $580 million before customary adjustments.
• Received credit rating upgrades from Fitch and Moody’s.
• Announced quarterly dividend increase of 7 percent to 30.5 cents per share.

“We’re delivering another year of strong performance by successfully executing our disciplined, returns-focused plan,” said Ryan Lance, chairman and chief executive officer. “We’ve accomplished many strategic, financial and operational milestones this year, ahead of our original schedule. Our strategy is designed to generate superior returns through cycles by maintaining discipline, focusing on free cash flow and allocating this cash according to clear, shareholder-friendly priorities. This is what the market can expect from us again in 2019.”

GUIDANCE:

Fourth-quarter 2018 production is expected to be 1,275 to 1,315 MBOED, reflecting the completion of seasonal turnarounds, growth from several conventional project startups and ongoing development in the unconventionals. This guidance includes impacts expected from the previously announced Barnett disposition and excludes Libya.

The company adjusted its 2018 capital guidance to $6.1 billion versus the prior guidance of $6 billion, reflecting higher partner-operated spend. This guidance excludes the previously announced $0.4 billion bolt-on acquisition in the Alaska Western North Slope and $0.1 billion to acquire additional acreage in the Montney in Canada. Full-year guidance for depreciation, depletion and amortization expense was updated to $6.0 billion from $5.9 billion. The company’s other guidance items are unchanged.

For earnings history and earnings-related data on ConocoPhillips (COP) click here.

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