ConocoPhillips (NYSE: COP) reported Q2 EPS of ($0.79), $0.14 worse than the analyst estimate of ($0.65).

Outlook

The company is increasing its full-year 2016 production guidance to 1,540 to 1,570 MBOED, reflecting strong year-to-date performance across most of the portfolio. Third-quarter 2016 production guidance is 1,510 to 1,550 MBOED, which reflects significant planned turnaround activity during the quarter.

Guidance for production and operating expenses is expected to be $5.8 billion, which results in improved adjusted operating costs of $6.8 billion versus prior guidance of $7.0 billion. The company entered into an agreement to terminate its final Gulf of Mexico drillship contract for approximately $140 million before tax, which is expected to be recorded in the third quarter as a special item.

Guidance for capital expenditures has been lowered to $5.5 billion versus prior guidance of $5.7 billion. Depreciation, depletion and amortization guidance has been increased to $9.2 billion for the full year as a result of increased volumes and increased expense associated with price-related reserve revisions. The company’s other guidance items remain unchanged, with corporate segment net expense of $1.0 billion and exploration dry hole and leasehold impairment expense of $0.8 billion.

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