Oil major ConocoPhillips on Wednesday lowered its long-term production growth rate to 2 percent from a previous forecast of 3 percent, saying the company's goal was value not volume.
The third-largest U.S. oil company also said it expects its reserve-replacement rate to exceed 100 percent over the next five years.
Reserve replacements represent the ratio of reserves found over production for a given period. Analysts typically say a company's reserve replacements should average more than 100 percent over a three- to five-year period to indicate growth.
Proved reserves are a key asset of oil companies.
"We expect we're going to more than replace our reserves over the next five years, and we'll do that not from what we hope to do, or what we might get from exploration success," ConocoPhillips Chairman Jim Mulva said at a presentation to Wall Street analysts in New York. "This comes from defined projects and resources that we're going to bring and book."
In February, ConocoPhillips said it lost the equivalent of more than a billion barrels of oil when its Venezuelan operations were expropriated last year, leaving the company to replace less than a third of its 2007 output with new reserves. Excluding the assets seized by the Venezuelan government in an ongoing dispute, the company said it replaced 159 percent of production.
The Houston-based company said it expects to sustain a long-term, average production growth rate of 2 percent. At a similar meeting in New York a year ago, it predicted a growth rate of 3 percent.
John Lowe, ConocoPhillips' executive vice president of exploration and production, said the company could grow production more than 2 percent, but it wants to maintain a balance on matters such as dividend payments versus capital spending.
"We are not going to chase volume to the detriment of value," Lowe said. "So our focus is on value creation -- however best we can do that."
ConocoPhillips shares were down $1.09, or 1.4 percent, to $78.41 in midday trading. They've traded in a range of $64.97 to $90.84 in the past year.
The company reaffirmed its intent to fund a capital program of $15.3 billion in 2008, up from about $13 billion in 2007. Lowe said the company plans to emphasize projects with "material resource potential" in North America, the Arctic and the deepwater Gulf of Mexico, among other regions.
ConocoPhillips plans to spend $10 billion on share repurchases this year, up from $7 billion in 2007.
In January, ConocoPhillips reported 2007 earnings of $11.9 billion, down from $15.5 billion the year before. However, excluding a $4.5 billion charge in the second quarter to write off its Venezuelan assets, the company's earnings amounted to $16.4 billion -- its best-ever result.
Earlier this month, a Lehman Brothers analyst downgraded shares of ConocoPhillips, saying the stock was close to a fair price. Analyst Paul Cheng cut his rating to "Equal Weight" from "Overweight" and noted ConocoPhillips was struggling to improve its natural gas and oil upstream production and processing operations. He also predicted the company would have to cut its growth forecasts.
Your Ads At Here
Oil Mining Exploration Company, ConocoPhillips Lowers Production Outlook
9:39 AM | company, investment, oil exploration, petroleumRelated Posts by Categories
oil exploration
- Rise in Oil Prices Helps Fuel Stock Gains
- Oil Prices Begin the New Year by Slipping 4%
- Iran Budget To Be Based on Oil Price of $37.5
- Russian To Supply Natural Gas Demand in Europe
- Nigeria Crude Oil Production Will Decline 1.1.6 mln barrel
- Crude Oil Extend Decline Record Trader Year-End
- Iraq to Open More Oil Fields to Bidding
- Exxon Argues for Alaskan Oil Lease
- Native Leader Serving Six Months for Opposing Mine
- ConocoPhillips Describes Business Strategies Intended to Deliver Growth and Enhance Shareholder Value
- Oil, gas exploration gets costlier after govt clarifies ship rental tax
- Coastal likely to clinch new offshore support vessel orders
- Troop surge won't stop Iraq oil fraud, insurgency: leading Democrat
- CORRECTED - Oil prices rising due to speculation-OPEC president
- Victoria Petroleum Announces Growler Oilfield Commences Production PEL104, Cooper Basin
- Cairn plans more exploration in B'desh after gas find
- Panda Energy to build natural gas fueled power plant in Sherman
- Rising oil prices spread beyond gas
- Texas pump prices hit record highs
- Offshore oil boom business for isle shipyards
- Crude oil price rising: Need to reduce consumption
- Oil gives up around a dollar on profit-taking, US recession fears
- Mining Oil and Gas Exploration New Investment in India
- Stocks tumble as Bear Stearns liquidity crisis unnerves investors
- Oil Price on Market and Trading
company
- Exxon Argues for Alaskan Oil Lease
- China's LPG imports hit 6.89 mln tons in 2007
- China Huaneng the winner in race to buy Tuas Power
- Kuwaiti firm buys shares in Sudanese oil Petrodar
- Native Leader Serving Six Months for Opposing Mine
- Chevron Corporation Financial Analysts
- ConocoPhillips Describes Business Strategies Intended to Deliver Growth and Enhance Shareholder Value
- Oil, gas exploration gets costlier after govt clarifies ship rental tax
- Coastal likely to clinch new offshore support vessel orders
- Troop surge won't stop Iraq oil fraud, insurgency: leading Democrat
- CORRECTED - Oil prices rising due to speculation-OPEC president
- Victoria Petroleum Announces Growler Oilfield Commences Production PEL104, Cooper Basin
- Cairn plans more exploration in B'desh after gas find
- Panda Energy to build natural gas fueled power plant in Sherman
- Rising oil prices spread beyond gas
- Texas pump prices hit record highs
- Offshore oil boom business for isle shipyards
- Crude oil price rising: Need to reduce consumption
- Oil gives up around a dollar on profit-taking, US recession fears
- Mining Oil and Gas Exploration New Investment in India
- Stocks tumble as Bear Stearns liquidity crisis unnerves investors
- Berry Petroleum says it's being investigated for 2,500-barrel spill
- Edge Petroleum Swings to 4th-Qtr Loss, Hurt by Volatile Commodity Prices and Higher Costs
- Central Petroleum Provides 140308 Exploration Update
- Pilgrim Petroleum Announces Update in Operations for Q1 2008
investment
- Russian To Supply Natural Gas Demand in Europe
- Nigeria Crude Oil Production Will Decline 1.1.6 mln barrel
- Oil Mining Exploration Company, ConocoPhillips Lowers Production Outlook
- Report: Oil Inventories Rose Last Week
- Oil steadies after record run
- OPEC oil surges to more than 100 dollars a barrel
- Paying at the Pump, in a Big Way
- Lundin Petroleum Falls After Abandoning Well in Sudan (Update1)
- Gusher for Marathon Oil boss - $13.1 million
- NRMA to track Sydney petrol prices
- Congress misses chance to cut oil dependence
- Montello Suspends Drilling Operations After Encountering Hydrocarbons in Morgan Highpoint # 3 Test Well
- SAGA Oil ASA: Fourth Quarter 2007 Report
- Exall Announces Exceptional Flow Test on Oil Discovery
- TransGlobe Energy Slides To Loss In Q4 - Update
- Chevron Corp. to start work on big Gulf of Thailand gas project
- Addax Petroleum Presents At Upcoming FirstEnergy / Societe Generale Global Energy Conference
- Marathon Oil CEO, Others Call for Integrated Energy, Climate Change, Foreign Policy
- Alberta Royalty Increase Seen Hurting Small Producers (Update1)
- Teppco Partners 3Q Earnings Rise 16 Pct
- Alberta Premier's TV Address Skirts Oil, Gas Royalty Issue
- Majestic Oil & Gas, Inc Drilling Wildcat Natural Gas Well in Northern Montana
- Nepal Rises Petroleum Prices To Curb Losses At State Firm
- Odds better for $100 oil than Chelsea winning title