HOUSTON – ConocoPhillips (NYSE: COP) today provided information regarding certain preliminary third-quarter 2020 operational and financial updates. Final third-quarter results will be reported on Oct. 29.
The company also announced that it intends to resume share repurchases of $1 billion during the fourth quarter of 2020 under its existing authorization. The repurchases will be funded from available cash on the balance sheet. Management retains the discretion to determine the level and pace of share repurchases.
The company expects to report third-quarter 2020 production volumes of 1,050 to 1,070 thousand barrels of oil equivalent per day (MBOED). This estimate reflects the impact of third-quarter curtailments and planned seasonal turnaround activity. Curtailments for the quarter were approximately 90 MBOED on a net basis. Of the total net curtailments, approximately 65 MBOED were in the Lower 48, 15 MBOED were in the Surmont operation in Canada and the remainder were in Malaysia and Norway. Based on estimated average realized prices, the estimated cash from operations (CFO) of the curtailed volumes is approximately $150 million. The company fully restored production in the Lower 48, Alaska and Canada by the end of the third quarter. Seasonal planned turnaround activity primarily impacted Canada, the Asia Pacific region and Alaska. During the quarter, the company also completed the previously announced transaction to acquire additional Montney acreage in Canada from Kelt Exploration Ltd.
Preliminary production estimates by area for the third quarter of 2020 are shown below:
3Q 2020 Production Midpoint Estimate |
|||||
|
Total (MBOED) |
Crude Oil (MBD) |
NGL (MBD) |
Bitumen (MBD) |
Natural Gas (MMCFD) |
Consolidated Operations |
|
|
|
|
|
Alaska |
200 |
185 |
13 |
– |
10 |
L48 |
355 |
195 |
65 |
– |
570 |
Canada |
65 |
5 |
2 |
50 |
45 |
Norway |
125 |
75 |
5 |
– |
270 |
China |
30 |
30 |
– |
– |
– |
Indonesia |
50 |
2 |
– |
– |
290 |
Malaysia |
45 |
40 |
– |
– |
30 |
Equity Affiliates |
190 |
15 |
5 |
– |
1,020 |
Total Excluding Libya |
1,050 – 1,070 |
547 |
90 |
50 |
2,235 |
Note: Libya production for 3Q 2020 is estimated to be 1 MBOED.
Given ongoing price volatility, the company is providing estimated ranges for third-quarter realized prices. Total average realized prices are expected to be $30 to $32 per barrel of oil equivalent (BOE) for the third quarter of 2020. These estimates reflect the impacts of curtailment ramp ups, as well as normal pricing variability due to timing and local differentials. Preliminary estimates of average realized prices by area and by product for the third quarter of 2020 are shown below:
3Q 2020 Average Realized Price Midpoint Estimate |
||||
|
Crude Oil ($/BBL) |
NGL ($/BBL) |
Bitumen ($/BBL) |
Natural Gas ($/MCF) |
Consolidated Operations |
|
|
|
|
Alaska |
41 |
2 |
– |
2.40 |
L48 |
37 |
14 |
– |
1.50 |
Canada |
24 |
5 |
20 |
1.00 |
Norway |
42 |
22 |
– |
2.60 |
China |
41 |
– |
– |
– |
Indonesia |
35 |
– |
– |
5.50 |
Malaysia |
46 |
– |
– |
2.50 |
Equity Affiliates |
38 |
30 |
– |
2.90 |
Total |
39 – 40 |
15 – 16 |
19 – 22 |
2.60 – 2.80 |
Note 1: Libya is excluded from the realized price table as no sales are expected in 3Q 2020.
Note 2: The estimated total realized price represents the company’s weighted average price for 3Q 2020.
In addition to the updates above, the company is providing the following estimates of other guidance items for the third quarter of 2020:
Adjusted Operating Costs |
$1,180 – 1,250 million |
||||
DD&A |
$1,380 – 1,450 million |
||||
Adjusted Corporate Segment Net Loss |
$210 – 260 million |
||||
Exploration Dry Hole and Leasehold Impairment Expense |
$30 – 50 million |
||||
Capital Expenditures – Excluding Acquisitions |
$750 – 820 million |
||||
Acquisition Capital Expenditures |
Approximately $385 million |
All updates and estimates provided in this news release are calculated using actual results for July through August and forecasts for September. The company will announce third-quarter operational and financial results on Oct. 29 and host a conference call on that date at 12:00 p.m. Eastern time.
— # # # —
About ConocoPhillips
Headquartered in Houston, Texas, ConocoPhillips had operations and activities in 16 countries, $63 billion of total assets, and approximately 9,700 employees at June 30, 2020. Production excluding Libya averaged 1,130 MBOED for the six months ended June 30, 2020, and proved reserves were 5.3 BBOE as of Dec. 31, 2019. For more information, go to www.conocophillips.com.