ConocoPhillips’s production in 3Q16
For 3Q16, ConocoPhillips (COP) reported total production of 1,557 Mboe (thousand barrels of oil equivalent) per day. That’s higher than its 3Q16 production guidance of 1,510–1,550 Mboe per day.
Even though ConocoPhillips beat its own production guidance, its 3Q16 production is almost flat compared to 3Q15 production of 1,554 Mboe per day.
As you can see in the above graph, ConocoPhillips’s quarterly production volumes peaked in 1Q15. In the first two quarters of 2016, COP reported declining production. But that trend was broken in 3Q16 when the company reported sequentially higher production. Its 3Q16 production was higher by ~11 Mboe per day, or ~1.0%, compared to 2Q16.
Why ConocoPhillips reported higher production in 3Q16
As we saw in Part 2 of this series, COP had major turnaround activities in Alaska in 3Q16. It also saw a significant fall of ~28 Mboe per day in natural gas production from North America. But despite these accomplishments, the company reported sequentially higher production in 3Q16.
This outperformance can be attributed to higher production from Canadian oil sands and APLNG (Asia Pacific Liquefied Natural Gas) in Australia. To know more about APLNG in Australia, take a look at Part 2 of this series.
Also in 3Q16, COP’s production from Surmont in Canada was fully recovered. It was impacted by wildfires in 2Q16. So in 3Q16, COP reported Canadian production of 309 Mboe per day, which is higher by 30 Mboe per day, or ~11.0%, compared to 2Q16.
4Q16 production guidance
For 4Q16, ConocoPhillips expects total production of 1,555–1,595 Mboe per day. That’s a midpoint rise of ~1.0% compared to 3Q16 production.
During its 3Q16 earnings call, while commenting on the reasons behind expected production growth in 4Q16, ConocoPhillips’s chairman and chief executive officer Ryan Lance said, “It’s the absence of those turnarounds and the continued ramp on the big projects at APLNG and Surmont, and some FCCL, as well as Malaysia.”
Production guidance for 2016
For 2016, ConocoPhillips increased its production guidance to 1,560–1,570 Mboe per day, a midpoint rise of ~10 Mboe per day, or ~1.0%, from its previous guidance of ~1,555 Mboe per day.
To know more about ConocoPhillips’s 2017 production plans, refer to Market Realist’s article ConocoPhillips’s 2017 Production Guidance and Strategies.