ConocoPhillips Misses Q2 Estimates, Revises FY23 Production Outlook

ConocoPhillips COP reported Q2 2023 adjusted EPS of $1.84, missing the consensus of $1.94.

Revenues of $12.9 billion declined from $22.0 billion a year ago and missed the consensus of $14.6 billion.  

Total production was 1,805 thousand barrels of oil equivalent per day (MBOED), an increase of 113 MBOED from the same period a year ago.

Lower 48 production averaged 1,063 MBOED in Q2, which includes 709 MBOED from the Permian, 235 MBOED from the Eagle Ford, and 104 MBOED from the Bakken assets. 

The average realized price declined 38% Y/Y to $54.50 per barrel of oil equivalent (BOE).

Operating cash flow stood at $3.9 billion in the quarter.

Repurchases: COP paid $1.3 billion to shareholders through share repurchases.

The company declared a dividend of $0.51 per share, payable on September 1, 2023, to stockholders of record as on August 16, 2023. Also, COP declared a variable return of cash (VROC) of $0.60 per share, payable on October 16, 2023, to stockholders of record as on September 28, 2023.

Outlook: For Q3 2023, production is expected to be 1.78 to 1.82MMBOED.

For 2023, COP revised production guidance to 1.80 to 1.81 MMBOED (vs 1.78 to 1.80 MMBOED earlier).

"We achieved record production and increased our full-year production guidance for the second consecutive quarter. We executed an agreement to purchase the remaining 50% interest in Surmont and further progressed our global LNG strategy. Our full-year distribution target of $11 billion remains unchanged. Looking ahead, we remain constructive on the second half of the year as well as the long-term outlook for the sector. By continuing to enhance our deep, durable and diversified asset base, we are well positioned to generate competitive cash flow and returns for decades," said Ryan Lance, chairman and chief executive officer.

Apart from this, COP penned sales and purchase agreements with Mexico Pacific to offtake around 2.2 MTPA of LNG across trains 1, 2 and 3 of Mexico Pacific's anchor LNG export facility.

Price Action: COP shares closed lower by 1.52% at $115.59 on Wednesday.