ConocoPhillips posts $2.3 billion profit

Average daily crude production fell by 31,000 barrels in '06

Posted: Friday, March 02, 2007

ANCHORAGE - Buoyed by high oil prices, ConocoPhillips posted a $2.3 billion profit on its Alaska oil production last year, according to an annual report the company filed with the U.S. Securities and Exchange Commission.

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The company's profit was slightly lower than its record 2005 tally of $2.6 billion, despite a partial shutdown of the giant Prudhoe Bay field due to leaks from corroded pipes.

Conoco, Alaska's top producer of crude oil and natural gas, reported that average daily crude production slipped by 31,000 barrels last year to 263,000 barrels. The Houston-based company attributed about a third of the decline to the partial shutdown of Prudhoe Bay from early August to October.

Conoco owns a 36 percent share of BP-run Prudhoe Bay, the nation's largest oil field.

Conoco's annual report also described its future plans in Alaska.

The report said five of seven exploration wells drilled in 2006 struck "commercial quantities of oil" on the North Slope. Dawn Patience, a Conoco spokeswoman, said Wednesday the company is drilling five more exploration wells this winter.

The company plans capital spending of $783 million this year in Alaska, down slightly from the $820 million in 2006.

On a per-barrel basis, the cost of oil production in Alaska rose last year, averaging $6.38 per barrel compared with $3.91 the prior year, Conoco said.

The company also reported that federal investigations into possible environmental violations aboard two of the company's new double-hull tankers remain unresolved. The company reported receiving subpoenas from the U.S. Attorney's Office in Anchorage in 2004 and 2005.

Elsewhere, the company reported averages last year of $4.85 per barrel in the Lower 48, $9.05 in Canada and $4.51 in the Middle East and Africa.

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