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ConocoPhillips (COP) Beats Earnings & Revenue Estimates in Q2

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ConocoPhillips (COP - Free Report) has reported second-quarter 2022 adjusted earnings per share of $3.91, beating the Zacks Consensus Estimate of $3.78. The bottom line surged from the prior-year quarter’s $1.27 per share.

One of the world’s largest independent oil and gas producers based in Houston, TX, ConocoPhillips’ quarterly revenues of $21,989 million increased from second-quarter 2021 sales of $10,211 million. Also, the top line beat the Zacks Consensus Estimate of $18,019 million.

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

ConocoPhillips has announced a quarterly ordinary dividend of 46 cents per share. The dividend is payable Sept 1, 2022, to stockholders of record at the close of business on Aug 16, 2022. Additionally, COP has reported a fourth-quarter variable return of cash (VROC) payment of $1.40 per share, which reflects an increment of 100% from the third-quarter VROC.

ConocoPhillips Price, Consensus and EPS Surprise

 

Production

Total production averaged 1,692 thousand barrels of oil equivalent per day (MBoe/d), up from the year-ago quarter’s 1,588 MBoe/d. Of the total output, 51.5% 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 871 thousand barrels per day (MBbls/d), higher than the year-ago quarter’s 849 MBbls/d. Production of natural gas liquids totaled 244 MBbls/d, higher than the year-ago period’s 128 MBbls/d. Yet, ConocoPhillips’ natural gas output was 3,107 million cubic feet per day (MMcf/d), lower than the year-ago level of 3,260 MMcf/d. Bitumen production for the quarter was 59 MBbls/d, lower than the second-quarter 2021 figure of 68 MBbls/d.

Realized Prices

Average realized oil equivalent prices rose to $88.57 per barrel from the year-ago level of $50.03.

The average realized crude oil price for the second quarter was $111.50 per barrel, reflecting a significant increase from the year-ago figure of $65.51. Realized natural gas liquids price was $43.26 per barrel, higher than the year-ago quarter’s $26.87. The average realized natural gas price for second-quarter 2022 was $10.15 per thousand cubic feet, up from the year-ago period’s $4.16. The average realized bitumen price was $75.42 per barrel, reflecting an increase from the year-ago level of $37.60.

Total Expenses

ConocoPhillips’ second-quarter total expenses rose to $14,334 million from $7,131 million in the corresponding period of 2021.

Production and operating expenses rose to $1,741 million for the reported quarter from $1,379 million a year ago. Similarly, the cost of purchased commodities rose to $9,234 million for the quarter from $2,998 million a year ago. Exploration costs increased to $143 million for the June-end quarter of 2022 from $57 million in the comparable period of 2021.

Balance Sheet & Capital Spending

As of Jun 30, 2022, ConocoPhillips had $6,909 million in cash and cash equivalents. The company had a total long-term debt of $16,295 million. It had a debt-to-capitalization ratio of 0.25. At the second-quarter end, the company had short-term debt of $676 million.

Capital expenditure and investments totaled $1,968 million, and dividend payments grossed $988 million. Net cash provided by operating activities was $7,914 million.

Guidance

ConocoPhillips projects its 2022 production at 1.74 million barrels of oil equivalent per day (MMBoe/d). For the third quarter of this year, ConocoPhillips expects production between 1.70 MMBoe/d and 1.76 MMBoe/d.

The Zacks Rank #3 (Hold) company has hiked its expected 2022 return of capital to shareholders. The new guidance is at $15 billion compared with the prior stated $10 billion. The incremental returns to stockholders will get distributed through share repurchases and VROC tiers.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Snapshot of Other Upstream Energy Companies

Range Resources Corporation (RRC - Free Report) posted second-quarter 2022 adjusted earnings of $1.27 per share, beating the Zacks Consensus Estimate of $1.21 per share. The strong quarterly results were driven by higher realizations of commodity prices.

Range Resources expects the free cash flow to exceed $1.5 billion this year. RRC has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company currently has a Zacks Style Score of A for Growth and B for Value. RRC is expected to see earnings growth of 167.3% in 2022.

Hess Corporation (HES - Free Report) reported second-quarter 2022 earnings per share of $2.15, beating the Zacks Consensus Estimate of $2.07. The strong quarterly results were driven by higher realizations of commodity prices.

Hess has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company currently has a Zacks Style Score of A for Growth. HES is expected to see earnings growth of 329.7% in 2022.

Continental Resources, Inc. (CLR - Free Report) reported second-quarter 2022 adjusted earnings of $3.47 per share, beating the Zacks Consensus Estimate of $3.17. The strong quarterly earnings were driven by higher oil-equivalent production volumes and commodity price realizations.

Continental Resources has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company currently has a Zacks Style Score of A for Value and Growth. CLR is expected to see earnings growth of 155.6% in 2022.