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ConocoPhillips’s 2Q16 Crude Oil Price Realization Underperforms

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ConocoPhillips’s 2Q16 crude oil realized prices

Excluding the effect of hedges, ConocoPhillips’s Lower 48 average realized crude oil price for 2Q16 was $39.50 per barrel. That’s a fall of ~24% from $52.01 per barrel in 2Q15. Sequentially, COP’s Lower 48 average realized crude oil price for 2Q16 was ~46% higher than 1Q16.

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ConocoPhillips’s 2Q16 crude oil realized price compared to the benchmark

COP’s Lower 48 average realized crude oil price in 2Q16 underperformed the average WTI (West Texas Intermediate) crude oil price during the same period. COP’s average realized crude oil price in 2Q16 was ~13% lower than the average WTI crude oil price of $45.64 per barrel for the same period.

According to ConocoPhillips’s 10Q report for 2Q16, this differential is driven primarily by local market dynamics in the Gulf Coast and the Bakken, and may remain somewhat wide in the near term.

ConocoPhillips’s 2Q16 natural gas and natural gas liquids realized prices

For 2Q16, COP’s Lower 48 average realized price for natural gas production fell ~29% to $1.70 per thousand cubic feet compared to $2.38 per thousand cubic feet for the same period in 2015.

For 2Q16, COP’s Lower 48 average realized price for natural gas liquids production fell ~5% to $14.59 per barrel compared to $15.29 for the same period in 2015.

Other upstream players

Other upstream companies from the S&P 500 (SPY) such as Southwestern Energy (SWN), Pioneer Natural Resources (PXD), and Devon Energy (DVN) had lower realized crude oil prices in 2Q16 compared to the average WTI crude oil price during the same quarter.

Now let’s take a look at an interesting graph that’s related to ConocoPhillips’s realized price effectiveness in terms of production costs.

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