- The Washington Times - Wednesday, October 26, 2005

HOUSTON (AP) — ConocoPhillips, the nation’s third-largest integrated oil and gas company, said third-quarter profit surged 89 percent, reflecting high prices for crude oil and natural gas after one of the worst hurricane seasons struck the heart of the nation’s oil industry.

The Houston-based company emerged from the one-two punch of hurricanes Katrina and Rita unscathed profit-wise, with earnings for the quarter ended Sept. 30 of $3.8 billion ($2.68 per share). Results a year ago reached $2 billion ($1.43 per share).

“The hurricanes barked, but they didn’t bite,” said Oppenheimer & Co. Inc. analyst Fadel Gheit. “Obviously, what they gained was a result of higher oil and gas prices, which more than offset the impact of lower [production] volume.”

Oklahoma City-based oil and gas producer Kerr-McGee Corp. saw an even bigger jump with net income of $359.3 million ($3.09), up from $7.4 million (5 cents) in the third quarter of 2004. Excluding items and discontinued business, Kerr-McGee’s earnings reached $294.1 million ($2.53) from $143 million (95 cents) last year.

New York-based Amerada Hess Corp.’s profits shot up 53 percent as high commodity prices countered a production drop related to the storms.

ConocoPhillips and Hess are the first of the seven largest U.S. oil companies to report earnings for a quarter that saw crude, natural gas and gasoline prices soar to new highs. Gas prices doubled in the quarter, and crude oil futures traded 44 percent higher than a year earlier as demand grew, yielding windfall profits for producers.

John Parry, an analyst with John S. Herold Inc., noted that hurricanes boosted already high oil and gas prices, further countering what ConocoPhillips and others lost in production disruptions.

“What they lost in production, they gained in price response to the hurricanes,” he said.

ConocoPhillips’ quarterly revenue rose 43 percent to $49.66 billion from $34.74 billion.

“During the quarter, our U.S. Gulf Coast operations were significantly impacted by hurricanes Katrina, Rita and Dennis,” said Jim Mulva, chairman and chief executive. “Despite these impacts, our overall operating performance for the quarter was good, and we continued to benefit from the strong commodity price environment.”

Exxon Mobil Corp. and Marathon Oil Corp., the largest and fourth-largest U.S. oil companies, plan to report third-quarter earnings today. Chevron Corp., the No. 2 U.S. producer, is scheduled to release its report tomorrow.

London-based BP PLC, the world’s second-biggest publicly traded oil company, Tuesday said third-quarter profit rose 16 percent to $4.41 billion, excluding inventory values.

House Republican leaders are urging the industry to use its wealth to build new refineries and pipelines, while some congressional Democrats are pushing a windfall profit tax, measures to counter the concentration of the refining industry and steps to address energy price gouging.

Yesterday, the House Resources Committee approved a bill to expand oil and gas drilling in the Gulf of Mexico and open Alaska’s Arctic National Wildlife Refuge. The measure will be considered by the full House as part of the budget package.

ConocoPhillips said it expects its Lake Charles, La.-based refinery, which has been shut since September because of Rita, to return to normal operations by next week. Its Belle Chasse, La.-based refinery, which sustained more damage from Katrina, should return to full operation early next year, Mr. Mulva said.

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