By Anna Driver
HOUSTON, Jan 28 (Reuters) - ConocoPhillips reported a $31.8 billion fourth-quarter loss on Wednesday compared with a year-earlier profit as the oil major was hit by billions in asset writedowns and a drop in crude oil prices.
Shares of the company were up 1.2 percent as investors cited the company's efforts to manage costs and cut spending.
Conoco had warned investors on Jan. 16 it would need to write down the value of its oil and gas assets to reflect the sharp pullback oil prices. In December, crude fell to its lowest level in nearly five years.
At the same time, the third-largest U.S. oil company said it was slashing its 2009 budget and cutting 4 percent of its workforce.
'When the news isn't worse than they expect the stocks get a bounce ... they got everyone cushioned for the fact that they were writing off a lot of goodwill,' James Halloran, an analyst at National City Private Client Group, which owns 1.6 million Conoco shares and has a 'buy' rating.
Conoco is doing 'as good a job as any' in controlling costs, Halloran said, in an environment where crude oil prices have fallen more than 70 percent from their summer high over $147 per barrel.
And the oil company does not expect the market to improve anytime soon.
'We are planning for a prolonged and difficult business environment,' Jim Mulva, Conoco's chief executive told investors on a conference call. '2009 and 2010 will be very challenging for our global economy and the energy business.'
As part of its effort to control spending, Conoco is cutting back on drilling in parts of the United States and Canada and deferring upgrades on some refineries, Mulva said.
There is no room in the company's $12.5 billion 2009 budget for a large acquisition, but Conoco may do some asset or acreage deals if prices are right, the executive said.
NEXT UP, EXXON
Exxon Mobil Corp, the world's largest publicly traded company and Chevron Corp, the second-largest U.S. oil company are due to report earnings on Friday. Chevron has warned that its fourth-quarter earnings will be significantly lower than the previous quarter.
Smaller peer Hess Corp also posted a fourth-quarter net loss on Wednesday as oil prices retreated from their year-ago levels and demand for gasoline sagged.
Hess had a a loss of $74 million, or 23 cents per share, compared with a year-ago profit of $583 million, or $1.59 per share.
Conoco said its net loss in the quarter was $31.8 billion, or a loss of $21.37 per share, compared with a profit of $4.4 billion, or $2.71 per share, a year earlier.
Adjusting for items, ConocoPhillips reported a profit of $1.9 billion, or $1.28 per share, compared with $4.1 billion or $2.55 per share. Analysts on average had expected an adjusted profit of $1.34 per share, according to Reuters Estimates.
Revenue fell 15.5 percent to $44.5 billion.
Daily production from Conoco's exploration and production segment averaged 1.87 million barrels of oil equivalent (BOE) per day, an increase from 1.75 million BOE per day in the previous quarter and 1.84 million BOE per day in the fourth quarter of 2007.
Looking ahead, Conoco said it sees first-quarter production to be near levels seen in the fourth quarter.
The oil major also forecast its worldwide refining crude oil capacity utilization rate in the first quarter will be in the low-80-percent range due to planned turnaround activity in the U.S. and continued run reductions at the Wilhelmshaven refinery in Germany.
In the quarter Conoco took a $7.4 billion impairment charge on its 20 percent equity stake in Russian oil major Lukoil and took a $25.4 billion impairment charge related to exploration and production goodwill.
Shares of Conoco were up 60 cents to $50.11 in early afternoon trading on the New York Stock Exchange on Tuesday. So far this year, the stock is down about 5 percent, underperforming a 1.5 percent decline in the Chicago Board Options Exchange index of oil companies.
(Additional reporting by Matt Daily in New York, editing by Dave Zimmerman and Tim Dobbyn) Keywords: CONOCO/ (anna.driver@thomsonreuters.com; 1 713 210 8509; Reuters Messaging: anna.driver.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
HOUSTON, Jan 28 (Reuters) - ConocoPhillips reported a $31.8 billion fourth-quarter loss on Wednesday compared with a year-earlier profit as the oil major was hit by billions in asset writedowns and a drop in crude oil prices.
Shares of the company were up 1.2 percent as investors cited the company's efforts to manage costs and cut spending.
Conoco had warned investors on Jan. 16 it would need to write down the value of its oil and gas assets to reflect the sharp pullback oil prices. In December, crude fell to its lowest level in nearly five years.
At the same time, the third-largest U.S. oil company said it was slashing its 2009 budget and cutting 4 percent of its workforce.
'When the news isn't worse than they expect the stocks get a bounce ... they got everyone cushioned for the fact that they were writing off a lot of goodwill,' James Halloran, an analyst at National City Private Client Group, which owns 1.6 million Conoco shares and has a 'buy' rating.
Conoco is doing 'as good a job as any' in controlling costs, Halloran said, in an environment where crude oil prices have fallen more than 70 percent from their summer high over $147 per barrel.
And the oil company does not expect the market to improve anytime soon.
'We are planning for a prolonged and difficult business environment,' Jim Mulva, Conoco's chief executive told investors on a conference call. '2009 and 2010 will be very challenging for our global economy and the energy business.'
As part of its effort to control spending, Conoco is cutting back on drilling in parts of the United States and Canada and deferring upgrades on some refineries, Mulva said.
There is no room in the company's $12.5 billion 2009 budget for a large acquisition, but Conoco may do some asset or acreage deals if prices are right, the executive said.
NEXT UP, EXXON
Exxon Mobil Corp, the world's largest publicly traded company and Chevron Corp, the second-largest U.S. oil company are due to report earnings on Friday. Chevron has warned that its fourth-quarter earnings will be significantly lower than the previous quarter.
Smaller peer Hess Corp also posted a fourth-quarter net loss on Wednesday as oil prices retreated from their year-ago levels and demand for gasoline sagged.
Hess had a a loss of $74 million, or 23 cents per share, compared with a year-ago profit of $583 million, or $1.59 per share.
Conoco said its net loss in the quarter was $31.8 billion, or a loss of $21.37 per share, compared with a profit of $4.4 billion, or $2.71 per share, a year earlier.
Adjusting for items, ConocoPhillips reported a profit of $1.9 billion, or $1.28 per share, compared with $4.1 billion or $2.55 per share. Analysts on average had expected an adjusted profit of $1.34 per share, according to Reuters Estimates.
Revenue fell 15.5 percent to $44.5 billion.
Daily production from Conoco's exploration and production segment averaged 1.87 million barrels of oil equivalent (BOE) per day, an increase from 1.75 million BOE per day in the previous quarter and 1.84 million BOE per day in the fourth quarter of 2007.
Looking ahead, Conoco said it sees first-quarter production to be near levels seen in the fourth quarter.
The oil major also forecast its worldwide refining crude oil capacity utilization rate in the first quarter will be in the low-80-percent range due to planned turnaround activity in the U.S. and continued run reductions at the Wilhelmshaven refinery in Germany.
In the quarter Conoco took a $7.4 billion impairment charge on its 20 percent equity stake in Russian oil major Lukoil and took a $25.4 billion impairment charge related to exploration and production goodwill.
Shares of Conoco were up 60 cents to $50.11 in early afternoon trading on the New York Stock Exchange on Tuesday. So far this year, the stock is down about 5 percent, underperforming a 1.5 percent decline in the Chicago Board Options Exchange index of oil companies.
(Additional reporting by Matt Daily in New York, editing by Dave Zimmerman and Tim Dobbyn) Keywords: CONOCO/ (anna.driver@thomsonreuters.com; 1 713 210 8509; Reuters Messaging: anna.driver.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.