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The Associated Press October 24, 2011, 4:46PM ET

ConocoPhillips expected to boost 3Q profit

All of the major oil companies are expected to boost profits in the third quarter, thanks to a 17 percent rise in the price of crude.

But they're not all benefiting the same way.

The most profitable will be those producing more oil than natural gas, and they'll be those companies that operate oil fields in North America. The reasons are simple: The price of oil has risen sharply this year while natural gas has stayed about the same. And royalties that oil companies must pay in the U.S. tend to be lower than in other countries.

ConocoPhillips, which on Wednesday will be the first major U.S. oil producer to report third-quarter financial data, so far has had the wrong mix of assets, analysts say. Its U.S. fields tend to contain more natural gas than oil, and the oil it produces comes mostly from outside the United States.

Conoco shares have been essentially flat since the end of the second quarter.

WHAT TO WATCH FOR: The Houston oil company has been aggressively reshaping itself to focus on more profitable fields, and it will complete the transformation next year by splitting into two companies -- one that focuses on production and another that focuses on oil refining and pipelines. Analysts are looking for details about how the two new companies plan to grow, what kind of dividends they'll pay, and what assets they'll look to buy.

WHY IT MATTERS: Investors are still unsure how the two new companies will compare among the pool of smaller independent players. Whatever assets ConocoPhillips buys will say a great deal about the companies it will become next year.

WHAT'S EXPECTED: Analysts expect earnings of $2.16 per share on revenue of $55 billion, according to FactSet.

LAST YEAR'S QUARTER: ConocoPhillips reported profits of $3.06 billion, or $2.05 per share, on revenue of $49.55 billion for the same July-September quarter last year.

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