OREANDA-NEWS. ConocoPhillips (NYSE: COP) today reported third-quarter 2014 earnings of USD 2.7 billion, or USD 2.17 per share, compared with third-quarter 2013 earnings of USD 2.5 billion, or USD 2.00 per share. Excluding special items, third-quarter 2014 adjusted earnings were USD 1.6 billion, or USD 1.29 per share, compared with third-quarter 2013 adjusted earnings of USD 1.8 billion, or USD 1.47 per share. Special items for the current quarter primarily related to discontinued operations as a result of a gain from the sale of the Nigerian business.

Highlights

Quarterly dividend increased by 5.8 percent in July.

Third-quarter production of 1,473 MBOED from continuing operations, excluding Libya, represents four percent growth year-over-year when adjusted for downtime.

Eagle Ford and Bakken combined production increased by 33 percent compared with third-quarter 2013.

First production achieved from Foster Creek Phase F and the Britannia Long-Term Compression Project in September, as well as the Gumusut floating production system in October.

Major turnarounds completed in the Alaska, Canada, Europe, and Asia Pacific and Middle East segments.

Major project preparations continue for startup at Kebabangan in the fourth quarter of 2014, and Eldfisk II, Surmont 2 and APLNG in 2015.

Oil discovered at the FAN-1 exploration well, offshore Senegal.

Exploration and appraisal activity continues with unconventional activities in Canada, the Lower 48 and Poland, and conventional drilling in Angola, Australia, the Gulf of Mexico and Senegal.

Sale of the Nigerian business completed in July for proceeds of USD 1.4 billion, inclusive of deposits previously received.

“Operationally, we are meeting our growth milestones,” said Ryan Lance, chairman and CEO. “We recently started production at three major projects, continued to generate strong results from our development activities in the North American unconventionals and completed a series of planned major turnarounds across the portfolio. On the financial side, we increased the dividend in July, and we continue to remain focused on returns and growing our margins.

“ConocoPhillips is well positioned in the current environment to deliver 3 to 5 percent volume and margin growth with an attractive dividend. We have completed a significant transformation that provides us with strong base assets and a high-quality inventory of investment opportunities. Importantly, we expect strong growth in 2015 driven by ongoing success in the North American unconventionals and startup of several major projects, including Surmont 2 and APLNG. Capital spending on those projects peaked in 2014, which provides increasing capital flexibility. This increased flexibility allows us to respond more easily to changing market conditions while continuing to deliver organic growth and an attractive dividend.”

Operations Update

Lower 48 - Quarterly production increased by 44 thousand barrels of oil equivalent per day (MBOED) over the same period in 2013, to 543 MBOED. The increase was primarily from growth in the liquids-rich unconventional plays, partially offset by normal field decline. The Eagle Ford and Bakken collectively delivered 212 MBOED for the quarter, a 33 percent increase compared with the third quarter of 2013. Liquids production grew 19 percent year-over-year with a 25 percent increase in crude oil production.

Canada - Third-quarter production was 276 MBOED, in line with the third quarter of 2013. Liquids growth of 9 percent year-over-year was offset by reduced natural gas production. First oil was achieved from Foster Creek Phase F in September, with production expected to ramp up over the next 12 to 18 months. At Surmont 1 a major turnaround was successfully completed and Surmont 2 remains on track for first steam in mid-2015.

Alaska - Production for the quarter was 155 MBOED, a decrease of 23 MBOED compared with the same period in 2013, primarily as a result of the turnaround at Prudhoe Bay. As part of the increasing investment in Alaska, ConocoPhillips sanctioned development of Kuparuk Drill Site 2S in October. The company also signed a contract to build a new rotary drilling rig for the Kuparuk River Unit, as well as engineering contracts to support North Slope maintenance projects and infrastructure expansion.

Europe - Quarterly production was 194 MBOED, an increase of 18 MBOED compared with the same period a year ago. The increase was primarily the result of major project ramp ups, partially offset by normal field decline. During the quarter, several major turnarounds were completed across the North Sea and startup was achieved at the Britannia Long-Term Compression Project. Offshore hook up and commissioning activities continue at Eldfisk II, which is on track for first production in early 2015.

Asia Pacific and Middle East - Third-quarter production was 301 MBOED, a decrease of 16 MBOED compared with the third quarter of 2013. The decrease was primarily the result of normal field decline and the major turnaround at the Bayu-Undan Field and the Darwin liquefied natural gas (LNG) facility in Australia, partially offset by growth from major projects. In early October, first oil production began from the floating production system at the Gumusut Field, which was the second major project startup in Malaysia this year. At Kebabangan, hook up and commissioning activities are ongoing in preparation for first gas in the fourth quarter of 2014. In Australia, APLNG remains on track for first production in mid-2015 and drilling commenced at Bayu-Undan Phase III.

Other International - Production from continuing operations, excluding Libya, was 4 MBOED in the third quarter, flat compared with the same period in 2013. In Libya, the Es Sider Terminal reopened and production started ramping up in August, providing 8 MBOED for the quarter. In July 2014, ConocoPhillips completed the sale of its interest in the upstream affiliates of its Nigerian business and transferred its interest in Brass LNG to the remaining shareholders. Operations related to Nigeria have been reported as discontinued operations.

Unconventional exploration - Unconventional exploration activity in the Lower 48 remains focused on drilling in the Niobrara and Permian. Activity also continues in the Duvernay and Montney in Canada, as well as in Poland. In Colombia, exploration drilling commenced at the Picoplata well in October.

Conventional exploration - Offshore Senegal, the company discovered a new working petroleum system at the FAN-1 exploration well, with further evaluation required to determine commerciality. Drilling is currently underway on the second Senegal prospect, SNE-1. In the Gulf of Mexico, ConocoPhillips continued to add acreage as the high bidder on approximately 576,000 net acres in the recent lease sale. Appraisal will continue at Shenandoah, Tiber and Gila during the remainder of 2014. After further evaluation, the company has elected not to continue appraisal of the Coronado prospect and expensed the initial wildcat well costs as a dry hole. In Australia, Poseidon Phase II appraisal activity was completed during the quarter and appraisal drilling commenced at Barossa in October. In Angola, drilling is ongoing at the Kamoxi-1 well, with total depth expected to be reached in November.