ConocoPhillips’ 2012 Earnings Drop

ConocoPhillips' 2012 Earnings Drop

ConocoPhillips today reported fourth-quarter 2012 earnings of $1.4 billion, or $1.16 per share, compared with fourth-quarter 2011 earnings of $3.4 billion, or $2.56 per share. Fourth-quarter 2011 reported earnings included downstream results prior to the separation of Phillips 66 on April 30, 2012.

Excluding special items, fourth-quarter 2012 adjusted earnings were $1.8 billion, or $1.43 per share, compared with fourth-quarter 2011 adjusted earnings of $2.1 billion, or $1.55 per share. Special items for the current quarter included disposition-related impairments partially offset by tax impacts, net benefits related to legal claims and settlements, and discontinued operations.

Following recently announced agreements to dispose of the company’s interests in the Kashagan Field and the Algeria and Nigeria business units, the associated earnings and production impacts for these assets have been reported as discontinued operations. This decreased adjusted earnings for fourth-quarter 2012 by $27 million, or $0.02 per share.

Full-year 2012 earnings were $8.4 billion, or $6.72 per share, compared with full-year 2011 earnings of $12.4 billion, or $8.97 per share. Reported earnings for 2012 and 2011 included four months and 12 months of downstream results, respectively. Full-year 2012 adjusted earnings were $6.7 billion, or $5.37 per share, compared with full-year 2011 adjusted earnings of $8.0 billion, or $5.75 per share.

Total production for the first quarter of 2013 is expected to be 1,580 to 1,600 MBOED, including production from discontinued operations of approximately 40 MBOED. Full-year 2013 production from continuing operations is expected to be 1,475 to 1,525 MBOED.

In addition to $2.1 billion in proceeds from asset dispositions completed in 2012, the company has announced asset sales that are expected to close by mid-2013, generating additional proceeds of approximately $9.6 billion. The company continues to evaluate opportunities to further optimize the portfolio.

“We ended 2012 with another strong quarter,” said Ryan Lance, chairman and chief executive officer. “We achieved our production targets, continued to successfully execute our growth projects and drilling programs, and announced significant progress on our asset disposition program. Our quarterly production from continuing operations is growing and we delivered strong organic reserve replacement. These achievements reflect our strategic focus on organic growth and the strength of our resource base. We remain committed to our goals of delivering 3 to 5 percent volume and margin growth, with a compelling dividend.”

Outlook

Total production for the first quarter of 2013 is expected to be 1,580 to 1,600 MBOED, including production from discontinued operations of approximately 40 MBOED. Full-year 2013 production from continuing operations is expected to be 1,475 to 1,525 MBOED.

In addition to $2.1 billion in proceeds from asset dispositions completed in 2012, the company has announced asset sales that are expected to close by mid-2013, generating additional proceeds of approximately $9.6 billion. The company continues to evaluate opportunities to further optimize the portfolio.

Press Release, January 31, 2013

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