ConocoPhillips lost $450 million in the third quarter as low crude prices and reduced production during the coronavirus pandemic continued to take a toll on the company’s bottom line.
The Houston independent oil and gas producer on Thursday reported a third-quarter loss of 42 cents per share, compared with earnings of $2.74 a share, or $3.1 billion, during the same period a year earlier. Revenue declined by almost 50 percent to $1.2 billion from $2.3 billion in the third quarter of 2019.
“In the third quarter we ended our curtailment program and successfully completed our seasonal turnarounds. ” CEO Ryan Lance said in a statement. “We remain very well-positioned financially and operationally thanks to our strong balance sheet and exceptional workforce.
Now that we’re back to more normal business, we’re focused on continued strong execution of our programs and progressing our announced transaction with Concho Resources.”
Low oil prices and sluggish demand during the pandemic have hurt the industry since the pandemic took hold in the U.S. in spring. Conoco produced an average of 309 million barrels of oil per day in the lower 48 states after cutting production by about 65 million barrels per day earlier in the year after crude prices sank.
The third-quarter loss comes as Conoco attempts to buy Midland producer Concho Resources and its assets in the Permian Basin. The company last week announced plans to acquire the Midland shale driller in a $9.7 billion all-stock deal that fills Conoco’s gap in the West Texas shale play. The acquisition, pending approval from shareholders and regulators, is expected to close early next year.
Lance again tried to reassure investors of the deal’s worth despite dwindling returns in the energy sector during recent oil busts. Conoco is paying a 15 percent premium for Concho, and will add $4 billion of debt to its balance sheet, a 25 percent increase, after the deal closes.
“The combination with Concho will make us a stronger company,” said Lance, adding, “This is the winning formula for our sector and we’ll be uniquely positioned to deliver on it through the cycles of our business.”
This article first appeared on the Houston Chronicle – an Energy Voice content partner. For more from the Houston Chronicle click here.
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