The higher output helped offset the impact of weak oil prices.
SEATTLE (Oil Monster): ConocoPhillips beat Wall Street estimates for first-quarter profit on Thursday on strong production volumes, but warned that weak oil prices would likely lead to output cuts in the industry.
CEO Ryan Lance said during a post-earnings call that while balance sheets across the sector were in good shape, a crude price outlook in the $50s or low $50s could still trigger widespread activity reductions, even among larger players.
After reaching a quarterly high of $82 a barrel in January, crude oil prices declined through the end of the first quarter following concerns surrounding future economic growth.
U.S. President Donald Trump's global tariff announcements have further contributed to a decline in oil prices and fears of an economic downturn.
Although ConocoPhillips is not planning significant changes in terms of operations at current commodity prices, it will reassess if prices remain low for an extended period.
"Would we have to look at potentially doing something different at 50? Sure," Lance said.
The company's first-quarter production stood at 2.38 million barrels of oil equivalent per day (mmboed), increasing 487,000 boepd from a year earlier, helped by Marathon Oil's acquisition, which added new assets to ConocoPhillips' portfolio.
The higher output helped offset the impact of weak oil prices.
ConocoPhillips, which spent $2.5 billion in shareholder returns in the quarter, said current volatility in commodity prices may, however, reduce its current-quarter returns by a few hundred million dollars.
The company also reduced its full-year capital budget by $450 million to $12.3 billion-$12.6 billion, but said it will have no impact on its production levels.
On an adjusted basis, it reported first-quarter profit of $2.09 per share, above analysts' average estimate of $2.06, according to data compiled by LSEG.
Separately, ConocoPhillips said CFO Bill Bullock will be succeeded by Andy O'Brien, effective on June 1.
Bullock, 60, who joined the company in 1986, was appointed the finance head in 2020.
ConocoPhillips completed several big-ticket deals during his tenure, including the sale of assets in Australia to Santos Limited in 2020, the $9.7 billion acquisition of Concho Resources in 2021, and the most recent Marathon Oil acquisition.
Courtesy: www.reuters.com
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