ConocoPhillips (COP) today reported fourth-quarter 2012 earnings of $1.4 billion, or $1.16 per share, compared with fourth-quarter 2011 earnings of $3.4 billion, or $2.56 per share. Fourth-quarter 2011 reported earnings included downstream results prior to the separation of Phillips 66 on April 30, 2012.
Excluding special items, fourth-quarter 2012 adjusted earnings were $1.8 billion, or $1.43 per share, compared with fourth-quarter 2011 adjusted earnings of $2.1 billion, or $1.55 per share. Special items for the current quarter included disposition-related impairments partially offset by tax impacts, net benefits related to legal claims and settlements, and discontinued operations.
Following recently announced agreements to dispose of the company’s interests in the Kashagan Field and the Algeria and Nigeria business units, the associated earnings and production impacts for these assets have been reported as discontinued operations. This decreased adjusted earnings for fourth-quarter 2012 by $27 million, or $0.02 per share.
Full-year 2012 earnings were $8.4 billion, or $6.72 per share, compared with full-year 2011 earnings of $12.4 billion, or $8.97 per share. Reported earnings for 2012 and 2011 included four months and 12 months of downstream results, respectively. Full-year 2012 adjusted earnings were $6.7 billion, or $5.37 per share, compared with full-year 2011 adjusted earnings of $8.0 billion, or $5.75 per share.
Fourth-quarter total production of 1,607 MBOED; full-year total production of 1,578 MBOED.
Year-end proved reserves of 8.6 billion BOE; annual organic reserve replacement of 156 percent.
Eagle Ford and Bakken continued to set new production and efficiency records.
Oil sands production exceeded 100 MBOED average for the quarter.
FCCL expansion progressed with sanction of Christina Lake Phase F and Narrows Lake Phase A.
First oil achieved from the Gumusut Field in Malaysia.
Continued drilling and testing of unconventional shale plays; increased Niobrara acreage position to approximately 130,000 acres.
Increased deepwater Gulf of Mexico position to 1.9 million acres; continued exploration and appraisal drilling.
Announced agreements to sell Kashagan, Algeria, Nigeria and Cedar Creek Anticline, which are expected to generate approximately $9.6 billion in proceeds.
“We ended 2012 with another strong quarter,” said Ryan Lance, chairman and chief executive officer. “We achieved our production targets, continued to successfully execute our growth projects and drilling programs, and announced significant progress on our asset disposition program. Our quarterly production from continuing operations is growing and we delivered strong organic reserve replacement. These achievements reflect our strategic focus on organic growth and the strength of our resource base. We remain committed to our goals of delivering 3 to 5 percent volume and margin growth, with a compelling dividend.”
Preliminary year-end 2012 proved reserves are 8.6 billion barrels of oil equivalent (BOE). Proved organic reserve additions for 2012 are expected to be 942 million BOE, representing an organic reserve replacement ratio of 156 percent of 2012 production, including fuel gas. Sales completed during 2012, net of purchases, reduced reserves by 83 million BOE, giving a total reserve replacement ratio of 142 percent.