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ConocoPhillips (COP) Q1 Earnings Beat on Higher Oil Prices

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ConocoPhillips (COP - Free Report) has reported first-quarter 2022 adjusted earnings per share of $3.27, beating the Zacks Consensus Estimate of $3.24. Further, the bottom line significantly improved from the prior-year quarter’s 69 cents per share.

One of the world’s largest independent oil and gas producers based in Houston, TX, ConocoPhillips’ quarterly revenues of $19,291 million increased from first-quarter 2021 sales of $10,559 million. Also, the top line beat the Zacks Consensus Estimate of $16,446 million.

The strong quarterly results have been aided by increased oil-equivalent production volumes and realized commodity prices.

Along with the quarterly results, ConocoPhillips has reported a third-quarter variable return of cash (VROC) payment of 70 cents per share. This reflects an increment of more than 130% from the second-quarter VROC.

ConocoPhillips Price, Consensus and EPS Surprise

 

ConocoPhillips Price, Consensus and EPS Surprise

ConocoPhillips price-consensus-eps-surprise-chart | ConocoPhillips Quote

Production

Total production averaged 1,747 thousand barrels of oil equivalent per day (MBoe/d), up from the year-ago quarter’s 1,527 MBoe/d. Of the total output, 52.4% was crude oil. Overall production was higher than the year-ago period primarily due to the significantly increased production in the Lower 48.

ConocoPhillips’ crude oil production was 915 thousand barrels per day (MBbls/d), higher than the year-ago quarter’s 818 MBbls/d. Natural gas output was 3,253 million cubic feet per day (MMcf/d), higher than the year-ago level of 3,155 MMcf/d. ConocoPhillips’ production of natural gas liquids totaled 223 MBbls/d, higher than the year-ago period’s 113 MBbls/d. Yet, bitumen production for the quarter was recorded at 67 MBbls/d, lower than the first-quarter 2021 figure of 70 MBbls/d.

Realized Prices

Average realized oil equivalent prices rose to $76.99 per barrel from the year-ago level of $45.36.

The average realized crude oil price for the first quarter was $94.82 per barrel, reflecting a significant increase from the year-ago realization of $57.22. Realized natural gas liquids price was $41.80 per barrel, higher than the year-ago quarter’s $26.44. The average realized natural gas price for first-quarter 2022 was $8.83 per thousand cubic feet, up from the year-ago period’s $4.42. The average realized bitumen price was $65.86 per barrel, reflecting an increase from the year-ago level of $30.78.

Total Expenses

ConocoPhillips’ first-quarter total expenses rose to $11,393 million from $8,845 million in the corresponding period of 2021.

Production and operating expenses rose to $1,581 million for the reported quarter from $1,383 million a year ago. Similarly, the cost of purchased commodities rose to $6,751 million for the quarter from $4,483 million a year ago. Nonetheless, exploration costs decreased to $69 million for the March-end quarter of 2022 from $84 million in the comparable period of 2021.

Balance Sheet & Capital Spending

As of Mar 31, 2022, ConocoPhillips had $6,414 million in cash and cash equivalents. The company had a total long-term debt of $17,586 million. It had a debt-to-capitalization ratio of 0.28. At the first-quarter end, the company had short-term debt of $1,160 million.

Capital expenditure and investments totaled $3,161 million, and dividend payments grossed $864 million. Net cash provided by operating activities was $5,068 million.

Guidance

ConocoPhillips projects its 2022 production at 1.76 million barrels of oil equivalent per day (MMBoe/d). For the second quarter of this year, ConocoPhillips projects production between 1.67 MMBoe/d and 1.73 MMBoe/d.

ConocoPhillips revised higher its expected 2022 return of capital to shareholders. The new guidance is at $10 billion, reflecting an increase from the prior projection of $8 billion. The incremental returns to stockholders will get distributed through share repurchases and VROC tiers.

The Zacks Rank #1 (Strong Buy) company estimates its capital budget for the year at $7.8 billion. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings Snapshot of Other Upstream Energy Companies

Diamondback Energy (FANG - Free Report) reported first-quarter 2022 adjusted earnings per share of $5.20, beating the Zacks Consensus Estimate of $4.74. The outperformance can be attributed to the surge in energy prices in the quarter, which led to higher oil, gas and natural gas liquid sales.

As of Mar 31, Diamondback had $149 million in cash and cash equivalents, and $5.8 billion in long-term debt. In good news for investors, FANG raised its regular quarterly dividend payout by almost 17% to 70 cents a share and declared a variable dividend of $2.35, bringing the total distribution to $3.05.

Southwestern Energy Company (SWN - Free Report)  reported first-quarter 2022 earnings of 40 cents per share, beating the Zacks Consensus Estimate of 36 cents. The strong quarterly results can be attributed to higher natural gas production volumes and commodity price realizations.

As of Mar 31, 2022, Southwestern’s cash and cash equivalents were $21 million. Long-term debt was $4,895 million. For the second quarter of 2022, the company expects total production of 418-434 Bcfe, consisting of natural gas of 370-382 Bcf.

Matador Resources Company (MTDR - Free Report) reported first-quarter 2022 adjusted earnings of $2.32 per share, beating the Zacks Consensus Estimate of $2.05 per share. The strong quarterly earnings were driven by increased oil-equivalent production volumes and higher commodity price realizations.

As of Mar 31, 2022, Matador had cash and restricted cash of $120.2 million. Long-term debt was recorded at $1,498 million, including $50 million of borrowings under its credit agreement. Debt to capitalization was 39.1%.