ConocoPhillips missed Wall Street forecasts for quarterly revenue on Tuesday as it spent over expected and took a hit from lower crude due to concerns of a slowing global economy.
The OPEC and Russia have put a cap on production; however, that has not translated into higher costs as a result of surging shale oil output from the US.
Shares of Conoco dropped 2% as the Houston, Texas-based firm posted $1.73 billion in capital expenditure during the quarter, above-average estimates of $1.53 billion, based on IBES data from Refinitiv.
The corporate further raised its capital spending for 2019 by $200 million to $6.3 billion, citing additional drilling in Alaska and the Eagle Ford shale of Texas.
Raymond James analyst Muhammed Ghulam called the outcomes “mixed” and stated the share price movement was in line with recent market reactions to different oil companies elevating capital budgets.
Traders have been pressuring oil producers to cut spending on expansion and increase returns with share buybacks or dividends. The corporate said it might increase full-year buyback goal by $500 million to $3.5 billion and could spend up to $300 million on acquisitions.
U.S. light crude CLc1 costs averaged $59.91 a barrel in Q2, 11.8% lower than a year prior, while Brent oil LCoc1 averaged $68.47 a barrel, 8.7% lower than a previous year.
That led to a decline in realized costs a barrel for the corporate, which received $50.50 per barrel sold in the newest quarter, compared with $54.32 a year prior.
ConocoPhillips, the world’s biggest standalone oil and gas producer, said production, excluding Libya, climbed to 1.29 million barrels of oil per day, a rise of 79,000 boepd from a previous year.