Alaska tax will stop ConocoPhillips work: Update 2

  • Spanish Market: Crude oil, Natural gas
  • 29/10/20

Updates with Lower 48 production, full-year 2020 data.

ConocoPhillips warned it will indefinitely stop drilling on Alaska's North Slope if voters approve a new tax on production at the polls next week.

Passage of Ballot Initiative 1 would mean the independent producer would not resume normal production of its Alpine, Prudhoe and Kuparuk fields in 2021 "or beyond that," chief operating officer Matthew Fox said during a third quarter earnings call with analysts.

"We're getting down with a wire here, and we really feel we have to be clear with Alaska voters," Fox said.

Ballot Initiative 1, also called the North Slope Oil Production Tax Initiative, would tax fields with a lifetime output of at least 400mn barrels of crude and at least 40,000 b/d in the preceding calendar year. The oil sector has mobilized against the measure.

ConocoPhillips is the largest oil and gas producer in Alaska. Together, the three fields on the North Slope generated 218,000 b/d oil equivalent (boe/d) last year, or about 25pc of the company's worldwide crude production.

The company said it would adopt a cautious outlook for global oil demand in 2021.

"We're not going to rush headlong into trying to grow production," chief financial officer Bill Bullock said. "It doesn't make any sense to us. We'll see how things play out here over the next several months, and then we'll make adjustments."

Last week ConocoPhillips said it would purchase Concho Resources for nearly $10bn, a deal it hopes to close by the first quarter of 2021.

"As we all know, the year has been historically volatile for our industry," said chief executive Ryan Lance. "Now that we're back to more normal business, we're focused on continued strong execution of our programs and progressing our announced transaction with Concho Resources."

Fourth quarter production is expected to reach 1.13mn-1.17mn boe/d, leading to a full year average production of 1.12mn-1.13mn boe/d. Operating plan capital for 2020 is expected to be $4.3bn.

3Q results

Third quarter production excluding Libya was 1.07mn boe/d, but would have been 1.16mn boe/d if not for curtailments put in place in response to global crude demand drops earlier in the year amid the Covid-19 crisis.

Production in the Lower 48 states averaged 309,000 boe/d, including 167,000 boe/d from Texas' Eagle Ford shale, 75,000 boe/d from the Bakken and 67,000 boe/d from the Permian.

The company's total average realized price was $30.94 boe/d, about 34pc lower than the $47.07 boe/d it realized in the third quarter of 2019.

ConocoPhillips said it spent $1.1bn on capital expenditures and investments for the quarter and generated $870mn in cash from operating activities.

The company reported a $500mn loss for the quarter compared to a profit of $3.1bn during the same period in 2019.


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17/06/24

Iran rebukes G7 over nuclear warning: Update

Iran rebukes G7 over nuclear warning: Update

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Japex takes control of Norway-focused upstream venture


17/06/24
17/06/24

Japex takes control of Norway-focused upstream venture

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Iran rebukes G7 after warning over nuclear escalation


17/06/24
17/06/24

Iran rebukes G7 after warning over nuclear escalation

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S Africa's ANC, DA agree to form government


14/06/24
14/06/24

S Africa's ANC, DA agree to form government

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Renewable natural gas not ‘major’ for climate: Chevron


13/06/24
13/06/24

Renewable natural gas not ‘major’ for climate: Chevron

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