ConocoPhillips reports third-quarter profit beat, hikes production forecast

9:14 am Thursday, October 31st, 2024

(Reuters) -Oil and gas producer ConocoPhillips topped Wall Street estimates for third-quarter profit on Thursday and hiked its full-year output forecast on a boost from higher production, sending its shares up 3% at $106.7 in premarket trading.

Commodity price volatility has been in focus in the past few months, driven by several factors including the escalating conflict in the Middle East, weak China demand, rate decisions by the U.S. Federal Reserve and OPEC actions.

Benchmark Brent crude averaged $78.3 a barrel in the reported quarter, nearly 9% lower than last year, but still favorable enough for oil and gas producers to drill profitably.

Production for the quarter stood at 1.92 million barrels of oil equivalent per day, up 6% from 1.8 million boepd in the year-ago quarter, due to higher volumes in the Permian and Eagle Ford basins.

“Data suggests the company continues to bring online improved Permian wells that will continue to provide a notable boost,” Truist analysts said in a note.

ConocoPhillips forecast its full-year output to be between 1.94 million and 1.95 million boepd, compared with 1.93 million to 1.94 million previously.

The beat comes as it waits to wrap up its $22.5-billion takeover of rival Marathon Oil. The deal, which was approved by Marathon shareholders in August, is still under U.S. Federal Trade Commission review.

Plans to close the deal this quarter remain on track and the company expects to significantly exceed its initial $500 million synergy forecast, CEO Ryan Lance said.

The deal going through would materially increase ConocoPhillips’ fourth-quarter free cash flow, which should result in boosted shareholder returns, according to Truist analysts.

The company increased its existing share repurchase authorization by up to $20 billion and reiterated its $9 billion minimum shareholder return for 2024.

On an adjusted basis, it reported a profit of $1.78 per share for the three months ended Sept. 30, compared with analysts’ average estimate of $1.64 per share, according to data compiled by LSEG.

(Reporting by Mrinalika Roy in Bengaluru; Editing by Pooja Desai)