ConocoPhillips reports losses as virus kills fuel demand
Second-quarter earnings from each barrel of oil sold more than halved as lockdowns leave a glut of oil and gas
Bengaluru — ConocoPhillips reported a wider-than-expected loss on Thursday, as coronavirus-induced lockdowns sapped demand for fuel and crushed crude prices, sending shares of the world’s largest independent oil and gas producer down nearly 9%.
The pandemic brought travel and other businesses to a halt under lockdowns and led to a glut of oil and gas, forcing widespread output cuts by bleeding producers.
Second-quarter earnings for ConocoPhillips from each barrel sold more than halved, as US light crude (WTI) and Brent crude average prices also fell more than 50%.
Major oil players such as BP, Chevron and ExxonMobil are also expected to report rare losses, hammered by the price plunge, but Royal Dutch Shell avoided its first quarterly loss in recent history by relying on a booming trading business.
Analysts at RBC Capital Markets noted a lack of operational colour in ConocoPhillips’ statement and said they were surprised it did not update guidance that was suspended in April.
The company, which cut about a third of its production early in the quarter when prices fell, brought back much of its curtailed volume over June as crude prices recovered some of the losses.
Total production, excluding Libya, fell about 24% to 981,000 barrels of oil equivalent per day in the second quarter.
Adjusted net loss stood at 92c per share, wider than analysts’ average estimate of 58c per share loss.
The Houston-based company realised a gain of $594m on completing the divestiture of its Australia-West assets to Santos and an unrealised gain of $551m on its stake in Cenovus Energy.
Shares of the company were down 9.5% at $36.16 in morning trade.
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