By Arunima Kumar and Sheila Dang (Reuters) -ConocoPhillips raised its quarterly dividend and full-year production forecast on Thursday, but the third quarter results appeared to be overshadowed by concerns about higher costs at the oil producer’s already-pricey Willow project in Alaska. Willow’s total project capital was raised by $1.5 billion to a range of $8.5 […]
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ConocoPhillips lifts dividend, but higher costs at Alaska oil project disappoints
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By Arunima Kumar and Sheila Dang
(Reuters) -ConocoPhillips raised its quarterly dividend and full-year production forecast on Thursday, but the third quarter results appeared to be overshadowed by concerns about higher costs at the oil producer’s already-pricey Willow project in Alaska.
Willow’s total project capital was raised by $1.5 billion to a range of $8.5 billion to $9 billion, mostly due to rising inflation, executives said. Shares of ConocoPhillips declined 1.5%.
“We’re disappointed that the costs are higher, but certainly we’ve taken measures across our portfolio to mitigate the increase,” ConocoPhillips CEO Ryan Lance said during a conference call with analysts.
The company posted third-quarter earnings above estimates thanks to higher output and lower costs elsewhere in the company, which offset weaker oil prices.
The company’s cost-cutting and efficiency efforts, including more than $1 billion in expected savings from its $22.5 billion Marathon Oil acquisition, helped cushion a 13% drop in Brent crude prices from a year earlier.
The deal, completed last year, strengthened its U.S. shale portfolio and added assets in the Anadarko Basin and Equatorial Guinea.
Higher contributions from U.S. onshore oilfields, including the Delaware and Eagle Ford basins, lifted third-quarter production to 2.4 million barrels of oil equivalent per day (boepd), up 482,000 boepd from a year ago.
For the fourth quarter, ConocoPhillips expects output of 2.30 million to 2.34 million boepd.
The company raised its ordinary dividend 8% to $0.84 per share and lifted its full-year 2025 production forecast to 2.375 million boepd, up from 2.35 million to 2.37 million boepd.
It also cut its 2025 operating cost forecast to $10.6 billion from a previous estimate of up to $10.9 billion.
Looking to 2026, ConocoPhillips projected about $12 billion in capital spending, $10.2 billion in operating costs, and up to 2% underlying production growth, driven by projects including the Willow development and U.S. Gulf Coast LNG ventures.
RBC Capital Markets called the quarter strong, citing higher production and lower costs, while J.P. Morgan said the profit beat and dividend increase were partly offset by a 17%-24% rise in Willow capex.
ConocoPhillips reported adjusted earnings of $1.61 per share for the quarter ended September 30, beating analysts’ estimate of $1.43, according to data compiled by LSEG.
(Reporting by Arunima Kumar in Bengaluru; Editing by Devika Syamnath and Alan Barona)