Tuesday, January 25, 2011

ConocoPhillips (NYSE: COP): Q4 Earnings Preview 2010

ConocoPhillips (NYSE: COP), the third largest US oil and gas producer, is scheduled to release its fourth-quarter earnings before the opening bell on Wednesday, January 26, 2011. Analysts, on average, expect the company to report earnings of $1.31 per share on revenue of $46.09 billion. In the year ago quarter, the company reported earnings of $1.16 per share on revenue of $43.62 billion.

ConocoPhillips operates as an integrated energy company worldwide. Its E&P segment explores for, produces, transports and markets crude oil, natural gas, natural gas liquids and bitumen on a worldwide basis. ConocoPhillips has business interests in 26 countries around the world, from Algeria to Vietnam. The company has nearly 10 billion barrel reserves of oil equivalent.

In the preceding third-quarter, the Houston, Texas-based company's net income was $3.1 billion, or $2.05 a share, compared to $1.5 billion, or 97 cents a share, in the same quarter last year. On an adjusted basis, the company earned $1.50 a share in the latest quarter. Revenue jumped to $49.55 billion from $41.27 billion. Analysts, on average, expected the company to report earnings of $1.45 per share on revenue of $45.59 billion.

The company has benefited from a hike in realized commodity prices and improved U.S. refining margins.

ConocoPhillips has more oil and gas properties around the world than it can reasonably develop, so it is selling some to raise cash and reduce debt. The company recently sold its 20% stake in  Russia’s second largest oil and gas company LUKOIL

The company recently said that it expects to add 920 million barrels of oil equivalent of reserves to its portfolio in 2010. The Houston firm will replace about 1.38 times its 2010 production. "The year's performance in reserve replacement is attributable to the execution of our major projects, including development of unconventional North American resources," said Jim Mulva, chairman and chief executive officer. "We concentrated much of our drilling and development activity on liquids prospects, given the strength of the oil market, and succeeded in adding significant reserves from our oil sands properties in Canada and our assets in Alaska. In addition, significant gas reserves were added in Qatar."

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