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Inside ConocoPhillips’s 2Q17 Crude Oil Price Realization and WTI Crude

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COP’s 2Q17 crude oil realized prices

Excluding gains on hedges, ConocoPhillips’s (COP) Lower 48 average realized crude oil (SCO) price in 2Q17 was $43.38 per barrel—up ~10% from $39.50 per barrel in 2Q16. Sequentially, COP’s Lower 48 average realized crude oil price in 2Q17 was ~5% lower than in 1Q17.

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Crude oil realized price compared to WTI benchmark

For 2Q17, COP’s average realized crude oil price in the Lower 48 region underperformed the average WTI (West Texas Intermediate) crude oil price during the same period. COP’s average realized crude oil price in 2Q17 was ~10% lower than the average WTI crude oil price of $48.24 per barrel during the same period.

According to COP’s recent 10Q report for 2Q17: “The differential is driven primarily by local market dynamics in the Gulf Coast and Bakken, and may remain relatively wide in the near term.”

Natural gas and NGL realized prices

For 2Q17, COP’s Lower 48 average realized price for natural gas production rose ~60% to $2.72 per thousand cubic feet, compared with $1.70 per thousand cubic feet for the same period in 2016.

For 2Q17, COP’s Lower 48 average realized price for natural gas liquids production rose ~30% to $18.99 per barrel, compared with $14.59 for the same period in 2016.

Other upstream players

By comparison, S&P 500 ETF (SPY) constituents Pioneer Natural Resources (PXD), EOG Resources (EOG), and Stone Energy (SGY) also had lower realized crude oil prices in 2Q17 compared with the average NYMEX WTI crude oil price during the same quarter. SGY’s 2Q17 realized crude oil price differential was -$0.75 per barrel compared with the average NYMEX WTI crude oil price.

In the next part, we’ll compare COP’s realized price with its production costs.

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