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ConocoPhillips Draws Application for Flaring Permit Extension

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ConocoPhillips (COP - Free Report) recently withdrew a request to extend flaring permits at 41 sites located in West Texas, per Reuters. With continued pressure from environmentalist groups on exploration and production companies to reduce flaring, the latest move can be a significant achievement for the company.

The 41 sites have burned 1.1 billion cubic feet of natural gas in 2018-2019, reported by a non-profit organization, Environmental Integrity Project, stated Reuters. The flaring released more than 1,262 tons of sulfur dioxide in the air, during this time period.

Flaring or burning unwanted natural gas that comes as a byproduct of crude oil production is expected to aggravate climate change. As such, the state of Texas intends to tighten some flaring rules to reduce emissions. At present, the state allows flaring through six-month permits, which gets routine waivers once the six-month period ends.

Notably, ConocoPhillips had applied for a permit, covering unplanned flaring from its Goldsmith facilities, last October. However, the company is addressing the problem through reducing emissions by operational improvements. It is taking measures to decrease flaring in the Permian Basin, one of the most prolific regions in the country. The company’s efforts have enabled it to reduce the need to run after the Railroad Commission of Texas applications.

Headquartered in Houston, TX, ConocoPhillips is primarily involved in the exploration and production of oil and natural gas. Considering proved reserves and production, the company is one of the largest upstream companies in the world. Its low risk and cost-effective operations are spread across North America, Asia, Australia and Europe. It also has foothold in Canada’s oil sand resources, with exposure to developments related to liquefied natural gas. At the end of 2019, it had total proved reserves of 5.3 billion barrels of oil equivalent.

Price Performance

The company’s shares have gained 5.2% in the past six months compared with the 13% rise of the industry it belongs to.

Zacks Rank & Stocks to Consider

ConocoPhillips currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include Cimarex Energy Co. (XEC - Free Report) , Royal Dutch Shell plc (RDS.A - Free Report) and Noble Energy, Inc. , each carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cimarex Energy’s sales for 2021 are expected to rise 11% year over year.

Shell’s bottom line for 2021 is expected to jump 113.5% year over year.

Noble Energy’s bottom line for 2021 is expected to surge 57.8% year over year.

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