ConocoPhillips' first-quarter profit tops as travel demand boosts oil prices

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FILE PHOTO: The logo for ConocoPhillips is displayed on a screen on the floor at the NYSE in New York
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(Reuters) - ConocoPhillips reported first-quarter profit that beat Wall Street expectations on Tuesday as a vaccines-led return of travel demand and a winter storm that swept parts of the United States in February boosted prices for oil and gas.

Higher crude prices and deep cost cuts implemented last year at the peak of a downturn are helping U.S. oil and gas companies deliver improved first-quarter profit and cash flow.

Still, Chief Executive Officer Ryan Lance warned global oil demand has yet to recover to pre-pandemic levels and estimated excess global supply of 5 million to 6 million barrels per day.

"We still have some balancing we need to do," he told investors on an earnings call.

Stronger fuel prices delivered cash flow from operations of $2.1 billion despite a $1 billion hit from the unraveling of hedges and restructuring expenses from ConocoPhillips' acquisition of shale rival Concho Resources.

Conoco sold its oil and gas for an average $45.36 per barrel during the quarter, 17% higher than the year-ago period. However, output slipped 4% from a year ago due to the impact of a February storm.

The company vowed to cut debt by $5 billion over the next five years and to sell its 10% stake in Canadian producer Cenovus Energy Inc by the end of 2022. Proceeds from the share sale will be used to increase stock buybacks, Conoco said.

As of Monday's close, the stake would be worth C$2.06 billion ($1.67 billion).

Conoco's total output, excluding Libya, was 1.49 million barrels of oil equivalent per day (boepd), compared with 1.14 million boepd in the fourth quarter. It expects output this quarter to be 1.50 million to 1.54 million boepd.

The company has restarted four drilling rigs in Alaska after halting activity due to the pandemic in 2020, officials said.

Adjusted profit was 69 cents per share, well above analysts' average estimate of 51 cents, according to Refinitiv IBES data.

Shares of ConocoPhillips were down a fraction in midday trading at $52.40.

($1 = 1.2318 Canadian dollars)

(Reporting by Shariq Khan in Bengaluru and Liz Hampton in Denver; Editing by Shounak Dasgupta and Marguerita Choy)