ConocoPhillips Provides Update on Production Curtailment Activities
June 30 2020 - 8:30AM
Business Wire
ConocoPhillips (NYSE: COP) today announced its estimated
production curtailment impacts for the second quarter of 2020 and
provided comments on future curtailments.
For the second quarter of 2020, the company’s curtailments were
primarily related to oil production and averaged approximately 225
thousand barrels of oil equivalent per day (MBOED) on a net basis.
Of the total net curtailments, approximately 65 percent were in the
Lower 48, 15 percent were in Alaska and 15 percent were in the
Surmont operation in Canada. The remainder of the second-quarter
curtailments were primarily in Malaysia. Including impacts from
curtailments and planned seasonal turnaround activity, the company
expects to report second-quarter production volumes of 960 to 980
MBOED. Excluding Libya, and adjusting for closed dispositions and
curtailments, production in the second quarter of 2020 is expected
to be in line with the same period a year ago and approximately 5
percent below the first quarter of 2020.
“ConocoPhillips established a consistent set of criteria for
evaluating and implementing economic curtailments during the recent
weakness in netback oil prices,” said Ryan Lance, chairman and
chief executive officer. “Due to our strong balance sheet, we were
in an advantaged position to create value for shareholders by
forgoing some production and cash flow in the second quarter in
anticipation of receiving higher cash flows for those volumes in
the future.”
The company continues to monitor netback pricing and evaluate
curtailments across its operated assets on a month-by-month basis.
Based on the company’s economic criteria, it expects to begin
restoring curtailed production in Alaska during the month of July.
In the Lower 48 region, the company also expects to begin bringing
some curtailed volumes back on line during July and will continue
to make economically driven production decisions at the asset level
in the months ahead. At Surmont, the company is also planning to
increase production from curtailed levels in the third quarter.
Given ongoing variability and uncertainty in the outlook for
production curtailments, the company will continue to suspend
forward-looking guidance and sensitivities.
The company will announce second-quarter operational and
financial results on July 30.
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About ConocoPhillips
Headquartered in Houston, Texas, ConocoPhillips had operations
and activities in 17 countries, $65 billion of total assets, and
approximately 10,400 employees as of March 31, 2020. Production
excluding Libya averaged 1,278 MBOED for the three months ended
March 31, 2020, and proved reserves were 5.3 BBOE as of Dec. 31,
2019. For more information, go to www.conocophillips.com.
CAUTIONARY STATEMENT FOR THE PURPOSES
OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
This news release contains forward-looking statements as defined
under the federal securities laws. Forward-looking statements
relate to future events and anticipated results of operations,
business strategies, and other aspects of our operations or
operating results. Words and phrases such as "anticipate,"
"estimate," "believe," “budget,” "continue," "could," "intend,"
"may," "plan," "potential," "predict," “seek,” "should," "will,"
“would,” "expect," "objective," "projection," "forecast," "goal,"
"guidance," "outlook," "effort," "target" and other similar words
can be used to identify forward-looking statements. However, the
absence of these words does not mean that the statements are not
forward-looking. Where, in any forward-looking statement, the
company expresses an expectation or belief as to future results,
such expectation or belief is expressed in good faith and believed
to be reasonable at the time such forward-looking statement is
made. However, these statements are not guarantees of future
performance and involve certain risks, uncertainties and other
factors beyond our control. Therefore, actual outcomes and results
may differ materially from what is expressed or forecast in the
forward-looking statements. Factors that could cause actual results
or events to differ materially from what is presented include the
impact of public health crises, such as pandemics (including
coronavirus (COVID-19)) and epidemics and any related company or
government policies and actions to protect the health and safety of
individuals or government policies or actions to maintain the
functioning of national or global economies and markets; global and
regional changes in the demand, supply, prices, differentials or
other market conditions affecting oil and gas and the resulting
company actions in response to such changes, including changes
resulting from the imposition or lifting of crude oil production
quotas or other actions that might be imposed by the Organization
of Petroleum Exporting Countries and other producing countries;
changes in commodity prices; changes in expected levels of oil and
gas reserves or production; operating hazards, drilling risks,
unsuccessful exploratory activities; unexpected cost increases or
technical difficulties in constructing, maintaining, or modifying
company facilities; legislative and regulatory initiatives
addressing global climate change or other environmental concerns;
investment in and development of competing or alternative energy
sources; disruptions or interruptions impacting the transportation
for our oil and gas production; international monetary conditions
and exchange rate fluctuations; changes in international trade
relationships, including the imposition of trade restrictions or
tariffs on any materials or products (such as aluminum and steel)
used in the operation of our business; our ability to collect
payments when due under our settlement agreement with PDVSA; our
ability to collect payments from the government of Venezuela as
ordered by the ICSID; our ability to liquidate the common stock
issued to us by Cenovus Energy Inc. at prices we deem acceptable,
or at all; our ability to complete our announced dispositions or
acquisitions on the timeline currently anticipated, if at all; the
possibility that regulatory approvals for our announced
dispositions or acquisitions will not be received on a timely
basis, if at all, or that such approvals may require modification
to the terms of our announced dispositions, acquisitions or our
remaining business; business disruptions during or following our
announced dispositions or acquisitions, including the diversion of
management time and attention; the ability to deploy net proceeds
from our announced dispositions in the manner and timeframe we
currently anticipate, if at all; potential liability for remedial
actions under existing or future environmental regulations;
potential liability resulting from pending or future litigation;
the impact of competition and consolidation in the oil and gas
industry; limited access to capital or significantly higher cost of
capital related to illiquidity or uncertainty in the domestic or
international financial markets; general domestic and international
economic and political conditions; changes in fiscal regime or tax,
environmental and other laws applicable to our business; and
disruptions resulting from extraordinary weather events, civil
unrest, war, terrorism or a cyber attack; and other economic,
business, competitive and/or regulatory factors affecting our
business generally as set forth in our filings with the Securities
and Exchange Commission. Unless legally required, ConocoPhillips
expressly disclaims any obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Cautionary Note to U.S. Investors – The SEC permits oil
and gas companies, in their filings with the SEC, to disclose only
proved, probable and possible reserves. We may use the term
"resource" in this news release that the SEC’s guidelines prohibit
us from including in filings with the SEC. U.S. investors are urged
to consider closely the oil and gas disclosures in our Form 10-K
and other reports and filings with the SEC. Copies are available
from the SEC and from the ConocoPhillips website.
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version on businesswire.com: https://www.businesswire.com/news/home/20200630005270/en/
John C. Roper (media) 281-293-1451
john.c.roper@conocophillips.com
Investor Relations 281-293-5000
investor.relations@conocophillips.com
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