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ConocoPhillips announces estimated 2Q20 production curtailments

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Oilfield Technology,

ConocoPhillips has announced its estimated production curtailment impacts for 2Q20 and provided comments on future curtailments.

For 2Q20, the company’s curtailments were primarily related to oil production and averaged approximately 225 000 boe/d on a net basis. Of the total net curtailments, approximately 65% were in the Lower 48, 15% were in Alaska and 15% were in the Surmont operation in Canada. The remainder of the second-quarter curtailments were primarily in Malaysia. Including impacts from curtailments and planned seasonal turnaround activity, the company expects to report 2Q20 production volumes of 960 to 980 000 boe/d. Excluding Libya, and adjusting for closed dispositions and curtailments, production in 2Q20 is expected to be in line with the same period a year ago and approximately 5% below 1Q20.

“ConocoPhillips established a consistent set of criteria for evaluating and implementing economic curtailments during the recent weakness in netback oil prices,” said Ryan Lance, chairman and CEO. “Due to our strong balance sheet, we were in an advantaged position to create value for shareholders by forgoing some production and cash flow in the second quarter in anticipation of receiving higher cash flows for those volumes in the future.”

The company continues to monitor netback pricing and evaluate curtailments across its operated assets on a month-by-month basis. Based on the company’s economic criteria, it expects to begin restoring curtailed production in Alaska during the month of July. In the Lower 48 region, the company also expects to begin bringing some curtailed volumes back on line during July and will continue to make economically driven production decisions at the asset level in the months ahead. At Surmont, the company is also planning to increase production from curtailed levels in the third quarter. Given ongoing variability and uncertainty in the outlook for production curtailments, the company will continue to suspend forward-looking guidance and sensitivities.

The company will announce 2Q20 operational and financial results on 30 July.

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