U.S. oil and gas producer ConocoPhillips COP-N slightly raised its full-year output expectations on Thursday, even as it posted a lower-than-expected quarterly profit.
Earnings at U.S. oil producers have been dented by weak oil and gas prices in recent months, though higher production at some of the larger shale oil producers has helped offset some of the pain.
Conoco said output rose 6 per cent to 1.81 million barrels of oil and gas per day (boepd), at the higher end of prior guidance, with record output in the U.S. Lower 48 states.
Shares rose 1 per cent to $116.75 in midday trading, but are off about 1 per cent year-to-date.
In the top U.S. shale oil basin, Conoco was unseated by Pioneer Natural Resources as second-largest producer last quarter.
Conoco’s 709,000-boepd production in the Permian fell below Pioneer’s 711,000 boepd in the same period. Oil major Chevron continued to retain the top spot with a record 772,000-boepd output.
The better-than-expected second quarter output helped Conoco raise its full-year production outlook for a second time this year. It forecast output of between 1.80 million boepd and 1.81 million boepd. The company in May said it expected production between 1.78 million boepd and 1.80 million boepd.
Conoco also narrowed its capital spending guidance range to between $10.8-billion and $11.2-billion, from previous guidance of $10.7-billion to $11.3-billion as the company steps down spending in the Lower 48 states and with a larger chunk of its funding for Sempra’s Port Arthur LNG project completed in the first half.
The company said it was seeing some deflation in oilfield service costs, echoing views from other U.S. shale producers this week. Costs were easing on fuels, chemicals and sand, Conoco said, adding that rig rates and hyrdraulic frac spread rates were also starting to soften.
The company’s earnings in the second quarter more than halved to $1.84 per share as the average price for its oil and gas fell 39 per cent to $54.50 per barrel of oil equivalent in the quarter.
Analysts had on average expected earnings of $1.95 per share, according to Refinitiv data.