Must-know: Key takeaways from ConocoPhillips’ Q2 earnings (Part 2 of 8)
Lower 48 production supports revenue
Revenues for the quarter amounted to $13.8 billion, missing Wall Street analysts’ estimate of $15.3 billion. They were 10.3 % lower than previous quarter’s revenues, but were 3.5% higher than last year.
One of the reasons revenues were less than the previous quarter’s revenues is likely higher price realizations for natural gas due to the severe winter experienced in the first quarter. Natural gas prices have since come down.
Production levels were, however, 4% or 60 MBOE higher than the previous year’s levels. Approximately 82% of this production growth (49 MBOE) came from COP’s operations in the lower 48 States—especially in the Eagle Ford and Bakken regions. This led to increased revenues from these regions.
Revenue from the Lower 48 states was almost 40% of the total revenue. This was slightly higher than the previous year’s revenue contribution of ~37%.
Capital expenditures in the second quarter were $8,141 million, 33% of which was spent in the Lower 48 states. The company noted in the earnings call that cash flow from operations ($9,958 million) was used to fund the capital expenditure and dividend for the first half of the year.
COP increased its quarterly dividend by 5.8% in July to $0.73, or $2.92 annualized. Dividends paid to its shareholders this quarter amounted to $1,711 million.
ConocoPhillips (COP) is a component of several important ETFs, including the Energy Select Sector SPDR ETF (XLE), the iShares U.S. Energy ETF (IYE), the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), and the Vanguard Energy ETF (VDE).
Continue to the next part of this series to read about COP’s 2Q 2014 operational highlights.
Browse this series on Market Realist:
- Part 1 - Must-know: Key takeaways from ConocoPhillips’ Q2 earnings
- Part 3 - ConocoPhillips’ operational performance and production forecast
- Part 4 - A must-know overview of ConocoPhillips’ operations in the US
- Investment & Company Information