ConocoPhillips (COP:US), the largest U.S. independent oil and natural gas producer, increased third-quarter profit 38 percent after selling assets.
Net income advanced to $2.5 billion, or $2 a share, from $1.8 billion, or $1.46, a year earlier, Houston-based ConocoPhillips said in a statement today. Excluding certain one-time items, per-share profit was 2 cents higher than the $1.45 average (COP:US) of 22 analysts’ estimates compiled by Bloomberg.
ConocoPhillips has been overhauling its business since announcing in 2009 a plan to sell assets and boost returns. It had a gain of $749 million in the quarter from disposals including the Clyden oil-sands lease in Canada and a midstream holding in Trinidad and Tobago. Today it said it closed the sale of its stake in the Kashagan project in Kazakhstan for about $5.4 billion.
“The company just continues to execute well on its strategy of reducing the risk profile and refocusing back on the U.S.,” Brian Youngberg, an analyst at Edward Jones in St. Louis who has a hold rating on ConocoPhillips shares and owns none, said in a phone interview today. “They’re moving forward with that strategy.”
The explorer is looking to areas such as the Eagle Ford and Bakken formations in the U.S. to increase oil output, and it has projects planned in locations such as Canada and the North Sea. ConocoPhillips spun off refining, chemical and pipeline assets as Phillips 66 (PSX:US) in April 2012.
Third-quarter production from continuing operations was the equivalent of 1.47 million barrels a day, the same as a year earlier. The company trimmed its daily forecast on that basis for all of 2013 to a range of 1.505 million to 1.515 million barrels, compared with an earlier estimate of as much as 1.53 million.
ConocoPhillips said its fourth-quarter production forecast is unchanged, except for about 50,000 barrels of oil equivalent a day in disruptions in Libya.
Revenue rose 5.1 percent from a year earlier to $15.5 billion in the quarter.
Oil futures traded in New York rose 15 percent from a year earlier to average $105.81 a barrel in the third quarter. Gas futures traded in New York averaged $3.555 per million British thermal units in the quarter, a 23 percent rise from a year earlier.
The earnings statement was issued before the opening of regular trading on U.S. markets. ConocoPhillips rose 1.1 percent to $74.05 by 8:28 a.m. in premarket trading in New York.
Independent producers don’t own refineries or chemical businesses.
(ConocoPhillips is scheduled to hold an earnings conference call at 1 p.m. New York time, accessible at www.conocophillips.com)
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