ConocoPhilips Screams Past Street Estimates
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Conoco Philips (COP) beat the Street estimates ($2.42) by $0.20 ($2.62). Daily production was 1.79 million BOE a decrease from 1.84 million BOE in the pervious quarter and 2.02 million BOE in Q1 2007. Most of the decrease can be attributed to the expropriation of the projects in Venezuela, as well as unplanned downtime. Net income was $4.14 billion dollars. EPS were up 17%. Good action!
Significantly higher natural gas prices (currently $10.78)
contributed to the midstream year-over-year comparisons. In my mind,
this completely validates the takeover of Burlington Resources' natural
gas reserves, for which the company was severely criticized. The Burlington nat
gas reserves were purchased at significantly under $5. Jim Mulva is
vindicated and should be recognized for what he is: the best CEO in big
oil. Not only is he a great oil executive, he has been outspoken about
the environment and the need to address the urgent realities of peak
oil.
Knowing the market, COP will trade down today. That said, COP is
expected to earn over $10/share this year. How does ConocoPhilips not
trade over $100 this year?
Here is the complete earnings release.
Disclosure: I am long COP common stock.
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This article has 14 comments:
One of Gore's presentations talks about how the melting of the ice caps will affect Europe. The consensus amongst climatologist is that the metling of the north pole ice will cause the gulf stream to cool. This will lead to a short term cooling of the prevailing winds and weather to Europe and even the Middle East. As Neil Young would say, "that's innaresting".
Regardless, here's the thing. Global warming, or, if you prefer, climate change, doesn't have the capability of creating economic and social chaos on a mass scale for perhaps 2-3 decades. PEAK OIL, on the other hand, may well do so by 2015. Now, the solutions to both are the same. That said, I make the distinction because it is one of URGENCY. If the US does not get an alternative to the gasoline powered internal combustion engine online, and very very soon, we are gonna be hosed from an economic perspective. Look at France (who IBD loves to criticize), they have electrified their transportation system for people and goods and feed it with nuclear power. Look at Germany - they have increased their use of electrified transportation for people and goods and feed it with wind, solar, and geothermal. Look at the US?! We have a failed ethanol push (just gives us inflation), and if we can't get gasoline at a cheap price, we are just hosed. Period. We have no backup, and no big iniative is even in the beginning phase. Sure the venture capitalist are backing wind and solar and biofuels, but a back of the envelope comupation of the power required for then change will require a government led huge iniatitive in nuclear, wind, and solar on a scale that is truely massive. That said, the government (and media like IBD, WSJ, CNBC) are pretty much in complete denial of peak oil and keep saying "all we have to do is drill more in alaska" or some such bunk. They completely miss the depletion rates in Prudoe Bay, the North Sea, Mexico, Saudi, and now even in some fields in Russia. What we need is for Boone Pickens to take over the media and the US Energy Department for 2 years. Then, perhaps the US would have a chance.
That said, I have to believe both Clinton and Obama are trying to get votes. Don't get me wrong, I think Obama is the best candidate by far (can we afford a continuation of Republican policies that have decimated the value of the US dollar, put us in the biggest fiscal deficit in the history of our country, failed to enact a real energy policy, and caused inflation to rage?). Once the next president takes office, the oil companies will make it clear that the president needs them more than they need the president.
btw, your earlier replied seemed to insinuate i don't take global warming seriously. i DO take global warming seriously, and i think the CO2 levels in the ice core samples (as Gore presented) prove without a doubt that it's real, it's manmade, and we are at CO2 levels orders of magnitude above the "norm". my point was, people think we have decades to get off fossil fuels, and that is an incorrect impression: we'll get off fossil fuels much sooner than that since by 2015, if we don't do something to address peak oil, the economy will completely tank, and we'll slip into the abyss...
1) abnormal levels of CO2 began to develop about the time man began burning coal in significant quantities
2) increased significantly more when automobile transportation began in earnest
3) and has, almost exponentially (in terms of the history of the planet) increased since the beginning of the industrial revolution until today.
the ice core samples prove this so convincingly that, as a scientist, one must be able to:
1) refute carbon dating as a method (not likely)
2) prove a conspiracy amongst multiple independent international teams (more likely than 1) above, but still not very likely) or
3) prove that something other than burning fossil fuels caused the jump
now, sun spots have been happening for billions of years, so why don't the ice core samples reflect that? well, they don't. also, the excuse rush limbaugh and such "non-believers&qu... use that "hey, there were volcanos that erupted and put larger amounts of CO2 in the air than there is today. well, the ice core samples prove that this indeed took place from time to time. the difference is, the CO2 levels soon dropped back to normal. what we are seeing NOW is CO2 levels that are **orders of magnitude** above historical norms of the planet and they are ** increasing ** at a very fast rate, not decreasing. i suppose, for these reasons, 95% of climatologist are in agreement over the issue. yeah, there is the one MIT expert that is being paid huge sums by XOM to refute it, but i think by now (even G.W. Bush) everyone realized these guys are paid stooges and they have been marginalized by the thinking world.
wrt energy investments, they are pretty near the only things to invest in. as long as the government, media, and people of the US ignore peak oil, the worse our economy will get, the more the US dollar will fall in value, the higher inflation will go, and the worse the "market" (as in S&P500) will perform. what i can't understand is how a company like COP, which produces oil & gas, much of it domestically, can earn $10/share this year and trade at $83. it should be at $125, and will be as soon as wall street figures out it isn't "speculation"... that is driving oil and gas prices, it's the long term supply/demand realities of peak oil.
by the way, you can't be serious about putting another "republican" in office can you? our latest so-called "conservative republican" (bush) has:
1) run up the biggest fiscal deficits in the history of the world
2) caused the US dollar to drop 50% in value
3) opened our borders up to illegal aliens
4) let the federal reserve (small letters) bail out a *private investment* publically traded firm (bear stearns) with taxpayer money!?! (un-friggin believable). now wall street makes all the profits if they are successful, if not, the middle class (what is left of us...) taxpayers bail them out. wonderful.
5) enacted an "energy policy" (ethanol) which is one of the most assinine and destructive policies ever
6) resided over a stock market that, once adjusted for inflation and the fall of the US dollar, done worse than nothing (negative) return in his nearly 8 years in office
7) inacted the most insane foreign policy in the history of the country by fighting two (count em, 2) unconstitutional wars (Congress has STILL not declared war on either Iraq or Afghanistan).
8) pissed every friend we had, til we don't have any more
do you seriously want a continuation of these policies going forward? if you do, don't vote for obama. if you want a change, vote for him. he is our only hope of the 3, and it's a slim hope in reality. we KNOW what the other two will be (more of the same).
thanks.
mike
1. HR2264 - have DOJ sue OPEC.
2. HR1252 - have the FTC investigate big oil.
3. HR5351 - take away tax credits from big oil for domestic oil production.
4. Market manipulations part of Energy Act of 2007 - have the FTC investigate market manipulations of energy.
5. This just in - Chuck Schumer (D-NY) wants the White House to tell the Saudis, etc. we won't sell them weapons unless they lower oil prices. I mean, it's not like they could buy weapons from Europe or Russia or China, right, Chuck?
What a great plan, he said sarcastically.