Weak Commodity Prices Drive Down ConocoPhillips’ 1Q’16 Earnings; Company Cut Capex Guidance To $5.7 Billion

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ConocoPhillips

ConocoPhillips (NYSE:COP) released disappointing 1Q’16 financial numbers on 28th April 2016, due to the persistently low commodity prices during the quarter. The Houston-based company produced 1,578 MBOED in the March quarter, approximately 2% lower on a year-on-year basis. The E&P company experienced a sharp decline in its price realizations in the March quarter, which caused its revenue to slide by more than 37% on a year-on-year basis. Further, while the oil and gas producer managed to reduce its operating costs by 20%, it ended up making net losses to the tune of $1.5 billion, as opposed to a profit of $272 million in the same quarter last year.

COP-Q&A-1Q16-2

Key Highlights of ConocoPhillips’ 1Q’16 Results:

  • Production guidance for 2Q’16 – 1,500 to 1,540 MBOED; Full year 2016 – 1,525 MBOED.
  • Revised 2016 capex guidance from $6.4 billion to $5.7 billion.
  • Raised $4.6 billion of low cost debt.
  • Expects first production at Foster Creek Phase G and Christina Lake Phase F in Canada and Alder in Europe in 2016.
  • Full year 2016 guidance numbers for operating costs and DD&A remain unchanged at $7 billion and $8.5 billion.
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Notes:

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2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for ConocoPhillips

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