ConocoPhillips managed to eke out a profit in the second quarter, despite the economic fallout from the coronavirus pandemic that has hammered the oil and gas industry.
The Houston oil major made $260 million during the second quarter, compared with earnings of $1.6 billion in the same period a year ago. The company posted operating revenue of nearly $700 million, slightly down from a year ago.
“Headline second-quarter performance was dominated by weak realized prices, coupled with our rational economic action to curtail production in favor of expected higher future prices,” CEO Ryan Lance said in a statement. “Importantly, our underlying business results were strong, reflecting our ongoing commitment to safely executing our plans and the dedication of our workforce during this challenging time.”
Many oil and gas companies struggled during the second quarter to weather the coronavirus pandemic, which depressed crude demand and prices. Companies slashed spending on new drilling and halted production on existing wells. ConocoPhillips has cut $5.2 billion from its budget in response to the recent coronavirus-driven oil bust.
After oil prices climbed back above $40 a barrel, ConocoPhillips began ramping up oil and gas production across the U.S. and Canada. The company curtailed oil and gas production by about 225,000 barrels per day during the second quarter. Most of the production cuts in the U.S. were made in the Eagle Ford shale play in South Texas and the Bakken shale play in North Dakota.
Analysts expect that ConocoPhillips will restore its curtailed oil and gas production by August and September.
“Given that (ConocoPhillips) is the operator with perhaps the most flexibility to leave volumes shut in, we view this as testament that the vast majority of shut-in shale volumes should be back online within the next one to two months,” Paul Cheng, an analyst with Scotiabank, said in a research note Thursday.
ConocoPhillip’s second-quarter financial results were helped by the sale of its northern Australian business to Santos for $1.39 billion in May. The sale, announced in October, produced about $765 million in proceeds during the second quarter that are expected to be used for “general corporate purposes,” the company said.
This article first appeared on the Houston Chronicle – an Energy Voice content partner. For more from the Houston Chronicle click here.