ConocoPhillips (COP) said oil and natural gas output in Texas and North Dakota surged in the second quarter as the company focuses on North American production in a bid for higher and more stable returns.
Production for the third-largest U.S. energy company rose to the equivalent of 1.556 million barrels of oil a day from 1.552 million a year earlier, Houston-based ConocoPhillips said in a statement today. The company was expected to produce 1.525 million barrels, the median of seven analysts’ estimates compiled by Bloomberg. Sales rose 3.5 percent to $13.8 billion.
Chairman and Chief Executive Officer Ryan Lance has shepherded the company’s increasing focus on North American wells, spinning off its refinery business and selling more than $13.8 billion worth in assets since 2012, including projects in Nigeria and Kazakhstan. ConocoPhillips is planning to boost output in emerging U.S. shale formations by more than 20 percent a year through 2017.
“ConocoPhillips has done a very good job of transitioning to being a more U.S.-centric and shale-centric company,” Brian Youngberg, an analyst at Edward Jones in St. Louis, said in a telephone interview before the earnings were released. “They have consistently executed on that strategy.”
Production from North Dakota and the Eagle Ford formation in Texas increased 38 percent to the equivalent of 208,000 barrels of oil a day, and U.S. output including Alaska grew to 733,000 daily barrels. Two Gulf of Mexico wells in which ConocoPhillips held an interest were dry holes, the company said.
Since spinning off its refining operations in 2012, the company has outperformed the Standard & Poor’s 500 Index and peers such as Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX), the two largest U.S. oil companies.
ConocoPhillips completed the $1.5 billion sale of its Nigeria business yesterday. The company isn’t planning another major divestiture program, Lance told analysts earlier this year.
Net income for the company increased to $2.08 billion, or $1.67 a share, from $2.05 billion, or $1.65, a year earlier. Excluding certain one-time items, per-share profit met the $1.61 average of 19 analysts’ estimates compiled by Bloomberg.
Brent crude futures, a global benchmark, rose 6 percent from a year earlier to average $109.76 a barrel in the second quarter. Gas futures traded in New York averaged $4.579 per million British thermal units in the quarter, a 14 percent increase from a year earlier.
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