U.S. oil and gas company ConocoPhillips (COP - Free Report) released its guidance for fourth-quarter production.
The company reported that poor weather conditions in the continental U.S. and North Sea will negatively impact its expected production for the fourth quarter. Notably, significant weather-related downtime in several operational areas has lately disrupted truck traffic and abandoned some wells.
In view of these challenges and turbulent weather in that region, ConocoPhillips also lowered its output at its huge Ekofisk field in the North Sea last month.
ConocoPhillips expects fourth-quarter output from continuing operations at 1,475 thousand barrels oil equivalent per day (Mboed), down from its earlier forecast of 1,485–1,525 Mboed.
The weather adversities are not likely to have a long-term effect on output and 2014 guidance for continuing operations remains unchanged at about 1,600 Mboed. This production estimate consists of 50 Mboed from the Es Sider Terminal in Libya, which remains suspended owing to regional conflicts.
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.
The Houston-based company is also poised to benefit from a pipeline of projects in Gulf of Mexico, Malaysia, the liquefied natural gas project in Australia, the U.K., Norway, and the Canadian oil sands, apart from the US Lower 48 liquids-rich plays. These ramped-up activities are expected to fuel its long-term production growth.
The completion of the Phillips 66 (PSX - Free Report) spin-off has shifted ConocoPhillips’ total focus to upstream operations. This is likely to reduce its earnings volatility but increase its dependence on oil and gas prices.
ConocoPhillips carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the oil and gas sector include Stone Energy Corp. and Helmerich & Payne, Inc. (HP - Free Report) . Both these stocks hold a Zacks Rank #1 (Strong Buy).