Unplanned E&P downtime, primarily from the temporary shutdown of the Trans Alaska Pipeline System in January, a supply vessel collision with the company's Britannia platform and civil unrest in Libya, hit ConocoPhillips production at the level of 65,000 BOE per day. Asset sales made in 2010 and the first quarter also reduced production by approximately 50,000 BOE per day.
The company said that the unplanned E&P downtime of approximately 65,000 BOE per day reduced earnings for the quarter by about $100 million.
Replacing lost production is a key measure for all oil companies and ConocoPhillips CEO Mulva stressed amid the disappointments, "Consistent with our strategy, we continue to build our Exploration portfolio of high-impact drillable prospects and expand our positions in world-class shale opportunities."
While refining profits were up from $21 million to $480 million year over year, CEO Mulva noted, "While we had significant improvement in earnings from our downstream business, we did not capture all the market opportunities available to us due to downtime at several refineries." The U.S. refining crude oil capacity utilization rate was 87% and the international rate was 96% in the quarter.
"For the quarter, earnings would have been about $50 million higher if we had operated our U.S. downstream at planned levels," the ConocoPhillips CEO said.
ConocoPhillips repurchased 21 million of its own shares for $1.6 billion in the quarter, and recently increased the quarterly dividend rate by 20% to 66 cents per share.
The company recently announced plans to sell an additional $5 billion to $10 billion of noncore assets over the next two years to fund the company's recently announced $10 billion share repurchase program and for investing.
At its recent analyst day, ConocoPhillips outlined a plan to return 40% cash to shareholders annually through dividends and buybacks.
Conoco reiterated this goal in its first quarter earnings release. "We remain focused on delivering value through improving returns, increasing shareholder distributions and growing production and reserves per share," ConocoPhillips CEO Mulva said in the earnings.
-- Written by Eric Rosenbaum from New York.
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