ConocoPhillips COP reported first-quarter 2015 adjusted loss of 18 cents per share, narrower than the Zacks Consensus Estimate of a loss of 19 cents. The year-ago-quarter adjusted profit was $1.81 per share.
Revenues in the reported quarter decreased to $8,002 million from the year-ago level of $16,048 million. Moreover, revenues widely missed the Zacks Consensus Estimate of $11,572 million.
Exploration and Production
Daily production, from continuing operation, averaged 1.610 million barrels of oil equivalent (MMBOE) in the quarter, up from 1.532 MMBOE in the year-ago quarter.
Price Realization
Average realized price for oil was $48.05 per barrel compared with $101.59 in the year-earlier quarter. Natural gas liquids were sold at $19.60 per barrel, down from the year-ago level of $46.52 per barrel. The price for natural gas was $4.72 per thousand cubic feet versus $7.55 in first-quarter 2014.
Financials
In first-quarter 2015, ConocoPhillips generated $1,870 million in cash from continuing operating activities. As of Mar 31, 2015, the company had total cash and cash equivalents of $2,664 million and $22,511 million in debt, with a debt-to-capitalization ratio of 31%.
ConocoPhillips incurred $3,332 million in capital expenditures during the quarter.
Guidance
For 2015, ConocoPhillips still expects 2–3% production growth. For the second quarter of 2015, production from continuing operations is expected at 1,555–1,595 MBOED, excluding Libya.
The company is on its way to spend roughly $11.5 billion throughout this year. However, the investment might be curtailed after the most important projects are operational and operations in the unconventional resources of North America are withdrawn.
Outlook
With leading positions in both natural gas and heavy crude oil in North America, as well as a legacy position in the North Sea and growing exposure to lucrative international regions, ConocoPhillips expects to replace reserves and sustain production growth over the long term.
However, with oil price presumed to remain low in the near future, we don’t see any immediate progress for the upstream player.
ConocoPhillips currently carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.
Meanwhile, some better-ranked players in the energy sector are Energy Transfer Equity, L.P. ETE, Valero Energy Partners LP VLP and Cheniere Energy Partners LP CQP. All the stocks sport a Zacks Rank #1 (Strong Buy).
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