ConocoPhillips shares slide on profit drop, lower production outlook

ConocoPhillips shares slid Thursday after the oil and gas firm reported a nearly 58 percent drop in fourth-quarter profit and gave a muted outlook that projects total production for this year will be lower than 2012.

The Houston-based company said that because of planned maintenance, downtime at some facilities and seasonal issues in the second and third quarters it expects full-year production from continuing operations of 1.48 million to 1.53 million barrels of oil equivalent per day. Full-year 2012 production totaled 1.58 million barrels of oil equivalent per day.

In morning trading, ConocoPhillips shares fell $3.07, or 5 percent, to $58.02.

CEO Ryan Lance said during a conference call with investors that that company must execute on its business plan following big divestitures that it previously announced.

“Our highest priority is to focus on safety and operational excellence,” he said.

Lance added that “2013 and 2014 are important years for testing the opportunities that we’ve captured.”

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ConocoPhillips reported late Wednesday that it earned $1.43 billion, or $1.16 a share, in the final three months of 2012, compared to a profit of $3.39 billion, or $2.56 a share, for the same period a year earlier when results included earnings  from downstream businesses it spun off last year.

Excluding one-time items, fourth-quarter adjusted earnings were $1.43 per share.

Revenue for the period was $16.4 billion, compared with $16.1 billion a year earlier.

For all of 2012, the company earned $8.43 billion, or $6.72 a share, compared with full-year 2011 earnings of $12.44 billion, or $8.97 a share.The 2011 profit included 12 months of downstream earnings, and the 2012 figure included the four months of combined earnings before the spinoff of the new Phillips 66 on April 30.

Lance said that given the transition the company has been going through, he was pleased with the results.

“Throughout the year, the business ran well,” he said.

Lance said the company has built momentum in conventional and unconventional exploration and production programs, and he thanked employees for their efforts.

“Despite a year of major change, they maintained their focus on the business and delivered on all fronts,” Lance said.

ConocoPhillips  reported fourth-quarter production of  1.61 million barrels of oil equivalent per day, and said it ended the year with proved reserves of  8.6 billion barrels of oil equivalent. Annual  organic reserve replacement was  156 percent.