ConocoPhillips Misses Q4 Profit on Weaker Oil Prices

Profit Miss Amid Price Slump

ConocoPhillips reported a fourth-quarter adjusted profit of $1.02 per share, falling short of Wall Street's average estimate of $1.11. The shortfall was primarily attributed to weaker crude oil prices, despite an increase in production to 2.32 million barrels of oil equivalent per day (boepd).

Market Conditions and Price Impact

The company's average realized price per barrel of oil equivalent was $42.46, a significant 19% decrease from the previous year. This reflects a broader market trend where benchmark Brent crude prices averaged 11.3% lower during the quarter, as oversupply concerns impacted the energy sector.

Strategic Cost Reductions and Outlook

In response, ConocoPhillips announced a plan to cut capital and operating costs by $1 billion by 2026. This initiative builds on synergies from its 2024 acquisition of Marathon Oil and highlights a strategic focus on capital efficiency amid industry-wide pressure.

Future Guidance

Looking ahead, ConocoPhillips forecasts its 2026 output to be between 2.33 million and 2.36 million boepd. The company has outlined annual capital spending of approximately $12 billion and adjusted operating costs of $10.2 billion to navigate the challenging price environment.

FAQ

Q: Why did ConocoPhillips' profit miss estimates despite higher production?
A: The primary reason was a 19% year-over-year decline in its average realized energy prices, which offset the benefits of increased production volume.

Q: What is ConocoPhillips' main strategy to counter lower oil prices?
A: The company is focusing on capital efficiency and has announced a target to cut $1 billion in costs by 2026, following its integration of Marathon Oil.

Source: Investing.com