HOUSTON ConocoPhillips reported a surprise quarterly loss on Tuesday as operating costs came in higher than expected, sending its shares lower in afternoon trading.
However, the largest U.S. independent oil producer's results reflected a slow but steady improvement across the industry bolstered by improved pricing for its oil and natural gas. Crude prices are up more than 50 percent from a year ago.
Don Wallette Jr., chief financial officer, said the latest quarter included a $200 million loss from a currency hedge tied to the British pound and a benefit of about $100 million from a tax loss carry forward.
The company expects to complete the sale of some Canadian oil sands and natural gas properties this quarter, and will finish a planned $3 billion share buyback by year end, he said in a conference call.
The Houston-based company said its total realized price was $36.18 per barrel of oil equivalent in the first quarter, compared with $22.94 a year earlier.
ConocoPhillips's production, excluding Libya, inched up 2 percent to 1.584 million barrels of oil equivalent per day (boepd) in the latest quarter.
That was higher than Wall Street expectations of 1.571 million boepd.
"Production was above guidance, but this was outweighed by higher costs," Raymond James analyst Pavel Molchanov said.
The company's operating expenses of $1.30 billion were higher than Raymond James' estimate of $1.24 billion, Molchanov said. Exploration expenses of $258 million on a pre-tax basis were also much larger than the $70 million Barclays analysts had estimated.
ConocoPhillips said it expects production of between 1.495 million and 1.535 million boepd for the current quarter, excluding any output from Libya. The estimate does not reflect the impact of recently announced asset sales.
The oil producer said last month it would sell natural gas-heavy assets in San Juan basin to privately held Hilcorp Energy Co for about $3 billion and earlier agreed to sell oil sands and western Canadian natural gas assets to Cenovus Energy Inc for C$17.7 billion.
ConocoPhillips has also marked other gas-weighted assets for sale, including some assets in the Anadarko basin, the Barnett shale field, and the Gulf of Mexico.
Net profit was $800 million, or 62 cents per share, in the first quarter ended March 31, compared with a net loss of $1.5 billion, or $1.18 per share, a year earlier.
Excluding a gain on the sale of assets in Canada, the company posted a loss of 2 cents per share. Analysts on average were expecting a profit of 1 cent per share, according to Thomson Reuters I/B/E/S.
(Reporting by Swetha Gopinath in Bengaluru and Gary McWilliams in Houston; Editing by David Gregorio)