ConocoPhillips beats expectations on refining

ConocoPhillips posted much higher-than-expected earnings on Wednesday on soaring profits from its refineries.
Excluding a huge charge related to Venezuela's move to take over ConocoPhillips operations in the country, the third-largest U.S. oil company posted earnings of $2.90 a share -- well ahead of Wall Street's average forecast of $2.68 a share, according to Reuters Estimates.

"Their refining and marketing operations did wonders for the quarter, and oil and gas prices stayed pretty high, too," said Oppenheimer & Co. analyst Fadel Gheit.
"We had record (refining) margins in the second quarter, and (Conoco's) reliability was pretty high. They operated at 93 percent of capacity, which given all the gory news in the newspapers of refinery fires and floods means they did pretty well relative to the industry."
Earnings from its refining and marketing segment rose 38 percent to $2.36 billion boosted by the higher margins and lower costs.
ConocoPhillips' shares rose $1.25, or 1.5 percent, to $83.58 in early New York Stock Exchange trading.
The company's second-quarter net profit fell as it took a $4.5 billion charge related to Venezuela's move to take over the company's operations in the country.
Net income in the quarter fell to $301 million, or 18 cents a share, from $5.19 billion, or $3.09 a share, last year. ConocoPhillips' exploration and production earnings, excluding the effect of the Venezuela impairment, fell 36 percent as lower crude oil prices and sales volumes as well as higher taxes weighed on results.
The company said its daily production fell to 1.9 million barrels of oil equivalent per day from 2.1 million barrels of oil equivalent per day in the second quarter of 2006, citing a host of issues including field decline, planned maintenance in the North Sea, OPEC reductions, and pipeline sabotage in Nigeria.
It expects lower third-quarter production due to the takeover of its Venezuela oil projects, unplanned downtime in the U.K., and planned downtime in the Timor Sea and Alaska.
Integrated oil companies that both produce and refine oil and gas were expected to have yet another in a series of stellar quarters as soaring refining margins picked up the slack for a year over year drop in oil prices.
On Tuesday, British oil major BP Plc said its profit fell 1 percent as lower production and refinery outages prevented the company from taking advantage of near-record refining margins. U.S. oil companies Exxon Mobil Corp. , and Chevron Corp. are scheduled to report earnings later this week.
Through Tuesday's close, ConocoPhillips' shares were up about 14 percent this year, underperforming the Chicago Board Options Exchange's oil index , which rose about 20 percent in the same period.