ConocoPhillips on Tuesday reported 21% annual production growth from its US Lower 48 assets, which it said helped to fuel most of the company's global output growth during the third quarter of 2019.
Including gains from development programs and major projects in Alaska, Europe and the Asia Pacific, ConocoPhillips dialed up its global third-quarter production by 7% on the year to 1.32 million boe/d.
In late September, the company completed a divestiture of its UK North Sea assets to Chrysaor E&P for $2.2 billion -- a move that it said would result in a slight downward revision to fourth-quarter output to around 1.27 million b/d to 1.31 million b/d.
A second divestiture during ConocoPhillips' Australia-West assets during the quarter generated about $1.4 billion in capital.
In North America, the company completed a turnaround at the Kuparuk field on Alaska's North Slope. Separately, it continued to make progress in appraising its Willow and Narwhal discoveries and has begun gearing up for its largest ever winter exploration and appraisal season there with plans to drill wells at Willow, Narwhal and Harpoon.
In Canada, the company completed commissioning of its Montney gas processing plant during the quarter. Delays in a third-party pipeline won't see the project enter service until early 2020, it said.
In the third quarter, ConocoPhillips' total realized oil price declined by 18% to $47.07/b, down from an average $57.71/b in the third quarter. Higher LNG realizations, an uptick in production and lower overall costs, though, help offset the impact of the lower commodity prices, the company said.
"This past quarter once again...demonstrates our unwavering commitment to financial returns, capital discipline, free cash flow generation and returning capital to shareholders," Chief Financial Officer Don Wallette said.
BIG THREE, ALASKA
On its quarterly earnings call Tuesday, executives at ConocoPhillips offered a truncated, high-level overview of the company's third-quarter financial, operational and strategic results.
Conspicuously absent was an extended discussion of the company's Lower 48 "big three" assets -- the Eagle Ford, the Bakken and Delaware basins - which have figured prominently in recent quarterly earnings calls.
Executives did say they expect Q3 production levels at 226,000 b/d in the Eagle Ford, 120,000 b/d in the Bakken and 51,000 b/d in the Delaware to remain flat in the fourth quarter with growth from Lower 48 assets expected to resume next year.
As exploration and development of Alaska becomes increasingly important to ConocoPhillips' North American portfolio, the company said it is keeping a close eye on a ballot initiative that could reverse tax advantages provided to oil and gas companies operating in the state.
Alaska's Fair Share Act, which requires some 28,000 signatures before it can appear on the 2020 ballot, would reverse an $8/b tax credit for producers and reinstate progressive taxes on legacy oil fields there.
"It's a situation that we're monitoring very closely," said Michael Hatfield, ConcoPhillips president of Alaska, Canada and Europe. "This sort of initiative has come up in the past and we've successfully informed voters...about the benefits of continuing under the fiscal regime that we currently have," he said.
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