ConocoPhillips marks record production
May 15—ConocoPhillips reports record oil production of 1,792,000 barrels per day for the first quarter of 2023 with the Permian Basin producing 694,000.
In their recent first quarter earnings call, executives reported record results as well in the Lower 48 States with 1,036,000 barrels of oil equivalent a day including 227,000 from the Eagle Ford Formation and 98,000 from the Bakken.
"As we've gone through a lot of turmoil in the business, the Russian invasion of Ukraine, just the lack of investment going into the business these days, we stepped back and did our own bottoms-up work to try to understand where we think the mid-cycle price is moving to," said Chairman-CEO Ryan Lance from Houston. "Our assessment of the price required to generate that incremental barrel to meet that incremental demand put it at around $60 today.
"So it goes to how we think about cash in the balance sheet, how we think about the debt we're carrying, how we think about distributions and how much capacity there is to distribute a bunch of our cash, for which our commitment is about 30 percent. And when we get above mid-cycle price in our case like we are today, obviously we're generating a lot more cash and we're returning a lot more cash to the shareholder, now something in excess of 50 percent today.
"But that's driven by the reinvestment rate that we have in the company and our commitment to only invest in the lowest cost supply things that we have in the portfolio," Lance said.
Executive Vice President-Chief Financial Officer Bill Bullock said ConocoPhillips generated $2.38 per share in adjusted earnings in the first quarter with the Lower 48's underlying production growing by eight percent year on year, driven by new wells and strong well performance.
With an average oil price of $76 per barrel, Bullock said, first quarter capital expenditures were $2.9 billion including $400 million for Port Arthur Phase 1 and $100 million in Lower 48 acquisitions.
"Regarding Port Arthur, as you will recall from our fourth quarter call, we said we planned to spend about $1.1 billion in 2023. So first quarter spending was very front-end loaded relative to the full year.
"We forecast second quarter production to be in a range of 1.77 million to 1.81 million barrels of oil equivalent per day," Bullock said. "This includes 10,000 to 15,000 of planned seasonal turnarounds. We have also increased the midpoint of our full year production guidance by 10,000 barrels a day."
