ConocoPhillips posted second-quarter earnings of US$3.4 billion which was an 18 per cent drop on last years Q2 2010 profits of US$4.2 billion.
"We had a solid quarter," said Jim Mulva, chairman and chief executive officer. "Higher adjusted earnings and cash flow were driven by better commodity prices and refining margins. Production performance was strong and capacity utilization of our refineries exceeded 90 per cent."
ConocoPhillips generated US$6.3 billion in cash from operations in Q2 2011. The company funded a US$3.1 billion capital program, repurchased US$3.1 billion of ConocoPhillips common stock and paid US$0.9 billion in dividends, it said in a statement.
The Chemicals and Midstream segments posted strong earnings for the second quarter. The Chemicals segment's record earnings of US$199mn were primarily due to higher margins, mostly in olefins and polyolefins, and higher volumes. Midstream earnings of US$130mn were more than double that of a year ago, primarily due to improved natural gas liquids prices.
ConocoPhillips recently announced its Board had approved pursuing the separation of the company's Exploration & Production (E&P) and Refining & Marketing (R&M) businesses into two leading energy companies. "Both companies will be uniquely positioned in their respective industries, with the management focus, financial strength and technical capability to successfully invest in the industry's highest returning projects," said Mulva.
E&P's second-quarter 2011 adjusted earnings were higher, compared with the same period in 2010, primarily due to stronger commodity prices.
Production for the second quarter of 2011 was 1.64 million barrels of oil equivalent (BOE) per day, a decrease of approximately 90,000 BOE per day versus the same period in 2010. Excluding the impact of dispositions and the civil unrest in Libya, production exceeded levels from the second quarter of 2010 as new projects and lower downtime more than offset decline. Production per share, adjusted for Libya, increased 4 per cent over the same period a year ago.
"Upstream operated well and we are seeing the benefits of our focus on margins and returns," said Mulva. "While our production fell, the earnings impact was limited as we shifted production from North American natural gas toward higher margin production of oil sands, Lower 48 liquids and LNG."
