ConocoPhillips, Amerada Hess Corp. and Kerr-McGee Corp. posted gains in third-quarter earnings yesterday as surging energy prices more than made up for output disruptions caused by hurricanes Katrina and Rita.
Profit at ConocoPhillips, the third-largest U.S. oil producer, jumped 89 percent, to a record $3.8 billion, or $2.68 a share, the company said in a statement. Amerada Hess, the No. 5 U.S. oil company, said its profit rose 53 percent, to $272 million, or $2.60 a share. At Kerr-McGee, profit soared 48-fold to $359 million, or $3.09 a share.
Houston-based ConocoPhillips and New York-based Hess are the first of the seven largest U.S. oil companies to report earnings for a quarter in which crude, natural gas and gasoline prices soared 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 profit for producers.
"Prices are being driven higher by demand, and the only thing that's going to lower demand is an economic slowdown, which we don't foresee," said Tobias Crabtree at Leeb Capital Management in New York. "For the next three to five years, we see energy as a very bullish sector."
Exxon Mobil Corp. and Marathon Oil Corp., the largest and fourth-largest U.S. oil companies, respectively, plan to report third-quarter earnings today. Chevron Corp., the No. 2 U.S. producer, is scheduled to report tomorrow. London-based BP PLC, the world's second-biggest publicly traded oil company, on Tuesday reported that third-quarter profit rose 34 percent, to $6.53 billion.
EnCana Corp., the largest producer of gas in the United States and Canada, said in a statement yesterday that its profit fell 38 percent, to $266 million, or 30 cents a share, on hedging contracts that locked in sales before the price rally. Excluding a currency gain and drop in the value of hedges, per-share profit rose 33 percent, to 80 cents, Calgary-based EnCana said.