ConocoPhillips sees Q1 production volumes 1,470 to 1,490 MBOED, expects to book charges on hedges, Concho deal

said Wednesday it expects first-quarter production volumes of 1,470 to 1,490 thousand barrels of oil equivalent per day, or MBOED, including about 50 MBOED of unexpected weather impacts caused by Winter Storm Uri. The energy giant will report first-quarter earnings on May 4. Total average realized prices are expected to range from $43 to $45 per barrel of oil equivalent. The company is expecting to book restructuring charges of about $300 million before tax related to the acquisition of Concho Resources Inc., which it is buying in an all-stock deal valued at $9.7 billion that was announced in October. The charge will be treated as a special item in non-GAAP adjusted earnings. The company expects to incur losses of about $300 million from commodity hedging positions. “Excluding working capital, the expected total impact to cash from operations from the transaction and restructuring expenses in combination with the hedging impacts is a reduction of approximately $1.0 billion,” the company said in a release. “This includes approximately $0.8 billion related to settling all oil and gas positions acquired from Concho, of which approximately $0.5 billion in net liability was recorded on the acquisition close date of Jan. 15.” The company is still expecting fiscal 2021 production excluding Libya of 1.5 MMBOED. Shares were flat premarket, but have gained 34% in the year to date, while the S&P 500
has gained 5%.

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