Renaissance Technologies and ConocoPhillips
Renaissance increased its position in ConocoPhillips (COP) during 3Q14. The stock accounts for 0.32% of the firm’s total portfolio—up from 0.05% of the fund’s 2Q14 portfolio.
COP is an independent exploration and production company. It explores, produces, transports, and markets crude oil, bitumen, natural gas, LNG (liquefied natural gas), and NGLs (natural gas liquids) worldwide. The company has operations and activities in 27 countries.
COP cuts 2015 drilling budget
COP said it would cut 2015 capital spending by 20% to $13.5 billion. This announcement is a result of the recent plunge in crude prices. Also, the company will spend less on some of its largest projects that are nearly complete. It estimates that it will pump 3% more oil and gas in 2015 than in 2014.
Third quarter earnings grew
COP reported earnings of $2.7 billion, or $2.17 per share—compared to $2.5 billion, or $2 per share in 3Q13. Adjusted earnings were $1.6 billion, or $1.29 per share—compared to $1.8 billion, or $1.47 per share in 3Q13. The decline was due to lower realized prices and higher operating costs associated with increased turnaround activity. It was partially offset by higher volumes. The company’s total realized price was $64.78 per barrel of oil equivalent—compared to $69.68 per barrel of oil equivalent in 3Q13.
Production was 1,473 MMboe/d (million barrels of oil equivalent per day) from continuing operations, excluding Libya. It represents 4% growth year-over-year, or YoY, when adjusted for downtime.
In September, it achieved the first production from Foster Creek Phase F and the Britannia Long-Term Compression Project. In October, it achieved the first production from the Gumusut-Kakap floating production system. In November, it achieved production from the Kebabangan gas development.
It continues major project preparations for startup at Eldfisk 2, Surmont 2, and APLNG in 2015. It discovered oil at the FAN-1 exploration well, offshore Senegal. It completed the sale of the Nigerian business in July for proceeds of $1.4 billion, including deposits received previously.
COP increased quarterly dividend by 5.8% in July. During the quarter, it paid dividends of $0.9 billion.
Fourth quarter and full-year outlook
For the fourth quarter, production guidance is 1,545–1,575 MMboe/d. Full-year 2014 production from continuing operations, excluding Libya, is expected to be ~1,525–1,535 MMboe/d.
Renaissance’s other 3Q14 positions
During the quarter, it added new positions in Viacom (VIAB) and Oracle (ORCL). It also increased positions in Intercontinental Exchange (ICE) and Facebook (FB). It exited positions in Apple (AAPL) and Pfizer, Inc. (PFE). It reduced positions in Intel Corp. (INTC) and IBM (IBM).
In the next part of the series, we’ll discuss Renaissance’s position change in ICE.