Yahoo Finance ConocoPhillips to Revive Output, Expects Q2 Profit to Fall Y/Y
ConocoPhillips COP recently announced its intention to bring back a portion of its curtailed output in July. The company also provided an update on the impact of production cut from its operations.
Following the massive dip in oil prices that stemmed from energy demand destruction caused by coronavirus-induced lockdowns and a price war between Saudi Arabia and Russia, companies with upstream operations opted for production curtailment. During April-end, WTI Crude price index plunged to historic lows. However, crude prices have significantly recovered in the past two months. The improvement prompted several companies to partially resume their productions.
ConocoPhillips will be the latest company to resume productions. It is planning to start restoring output in Alaska and the Lower 48 area this month. Canada’s Surmont is also expected to witness a rise in production in the third quarter. Other companies that have partially resumed curtailed productions include Continental Resources, Inc. CLR, EOG Resources, Inc. EOG and Parsley Energy, Inc. PE.
Most of the company’s production curtailment in the June quarter was focused on oil operations, which averaged around 225 thousand barrels of oil equivalent per day (MBoe/d). While the Lower 48 witnessed 65% production cut, ConocoPhillips’ Alaska and Surmont operations were reduced by 15% each. The rest of the curtailment was in its Malaysia operations. As such, the company’s second-quarter production volumes are expected within 960-980 MBoe/d, indicating a decline from the year-ago period’s 1,290 MBoe/d (unadjusted).
Combined with the low oil prices, the curtailed production volumes are expected to have resulted in a decline in profit levels. The Zacks Consensus Estimate for second-quarter earnings per share is 23 cents, indicating 77.2% year-over-year fall. It is scheduled report second-quarter results on Jul 30.
Price Performance
The Zacks Rank #2 (Buy) company’s shares have gained 41.9% since the beginning of the second quarter compared with 52.8% rise of the industry it belongs to. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
ConocoPhillips (COP) : Free Stock Analysis Report
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
Continental Resources, Inc. (CLR) : Free Stock Analysis Report
Parsley Energy, Inc. (PE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
