ConocoPhillips reports $1.1B global loss, but earnings in Alaska

Despite a global loss of $1.1 billion, oil giant ConocoPhillips reported $54 million in adjusted earnings in Alaska last quarter, according to an earnings report filed Thursday.

ConocoPhillips still has a "negative cash flow" in Alaska, said Natalie Lowman, a spokesperson for the company's operations here, where the company spent $183 million on capital expenditures in the second quarter.

Alaska was one of three markets where the company reported earnings — along with its Europe and North Africa, and Asia Pacific and Middle East segments — while reporting losses in the Lower 48, Canada and other international operations.

The $54 million earnings in the second quarter in Alaska are "generally attributed" to the sale of the company's interest in the Beluga River Gas Unit to Anchorage Municipal Light and Power and Chugach Electric, Lowman said. During the same time period in 2015, the company reported $195 million in adjusted earnings in Alaska.

ConocoPhillips is the only North Slope oil producer that breaks out its Alaska-specific earnings. Lowman said that's because "Alaska is a fairly significant part" of the company's business.

The global loss of about $1.1 billion in the second quarter is a sharp increase compared to a net loss of $179 million during the same quarter of 2015. The company also said it would cut its capital expenditures in 2016 by $200 million, to $5.5 billion.

ConocoPhillips "progressed several major turnarounds in Europe and Alaska," the company said in a news release, and that "will continue in the third quarter." A turnaround is essentially a planned maintenance shutdown of a facility.

Last week, the company said it will lay off 1,000 workers through the rest of this year, though Lowman said that's unlikely to result in a "significant reduction" in the Alaska workforce.

Al Hirshberg, executive vice president of production, drilling and projects, said in a conference call Thursday morning that in Alaska the company "saw growth compared to the same time last year," which "came from ongoing strong production at CD5 and drill site 2S."

Lowman said in an email year-to-date production averaged 185,000 barrels of oil per day, up from 180,000 barrels per day throughput in the first half of 2015.

Oil prices have dropped from over $100 per barrel in 2014 to around $43 per barrel today, putting pressure on energy companies' bottom lines. ConocoPhillips cited lower prices "across all commodities" as contributing to its losses.

"The price environment remains challenging, but our business is running well and we continue to beat our production, capital expenditures and operating cost targets," said Ryan Lance, chairman and CEO, in a news release.

Also in the second quarter, the company approved an expansion phase of the CD5 drill site, which started producing oil in October. That expansion will add an additional 16 wells and "bring CD5 to its full design capacity," Hirshberg said.