Conoco profit rises on higher oil prices, asset sales

Oil giant ConocoPhillips posted a 66 percent increase in fourth-quarter profits, boosted by higher oil prices and the company’s aggressive program to shed underperforming refineries and other assets, the company announced today.

Houston-based Conoco earned $3.4 billion during the three-month period ending Dec. 31, compared to $2 billion during the same period in 2010. Earnings per share rose $1.17 to $2.56, according to the company’s income statement.

Fourth-quarter revenue grew 17 percent to $62 billion.

ConocoPhillips launched a three-year program in 2010 to unload weighty assets and streamline the company’s focus on high-margin operations. Sale of refining assets brought in $1.5 billion in the fourth quarter of 2011, boosting the company’s income results.

The company plans to shed an additional $5 billion to $10 billion in assets in 2012, executives said in a conference call with analysts Wednesday morning.

Adjusted for the asset sales and other special items, Conoco’s oil and natural gas exploration and production arm saw a 27 percent boost in fourth-quarter earnings. Profits from its refining arm fell 2.9 percent.

The quarter was highlighted by increased production in several North American fields, including the Eagle Ford and Barnett shales in Texas, the Bakken shale in North Dakota, and the Canadian oil sands, said Jeff Sheets, chief financial officer. Together, the fields produced and average 153,000 barrels of oil equivalent per day, up 53,000 boe per day from the fourth quarter of 2010.

Refining was hurt by lower margins, the company said.

“The refining market environment in the fourth quarter was generally worse than the refining market we saw in the fourth quarter of 2010,” Sheets said.

ConocoPhillips will split in two later this year, creating a separate company called Phillips 66 for its refineries, gas stations and pipelines. The new ConocoPhillips will focus solely on exploration and production of oil and natural gas.

That spinoff will be complete as soon as May, Conoco executives said.

ConocoPhillips shares were down 61 cents to $70 in afternoon trading on the New York Stock Exchange.