Phillips expects slight net operating loss in first quarter
Tuesday, April 9th 2002, 12:00 am
By: News On 6
BARTLESVILLE, Okla. (AP) _ Phillips Petroleum Co. expects a slight net operating loss in the first quarter because prices of petroleum products have lagged behind recovering crude oil prices, the company said Tuesday.
The Bartlesville-based company said its refining, marketing and transportation segment will see a significant loss in the first quarter.
Marketing margins were 50 percent smaller than the prior quarter, and refining production was cutback to 86 percent capacity because of the lowest refining margins in 10 years, the company said.
Two major scheduled turnarounds will cost the company $40 million when first quarter results are announced April 25, the company said.
Phillips' net operating income in the fourth quarter was $227 million, or 59 cents a share.
Daily crude oil production for the first quarter is expected to be 830,000 barrels of oil equivalent, in line with the company's target and consistent with fourth quarter 2001, the company said.
Crude oil sales prices are expected to be similar to the previous period but down significantly from a year ago, the company said. In some areas, such as Alaska, increasing crude oil prices won't be realized until the second quarter because of contractual pricing lags, the company said.
Natural gas production is expected to be up slightly from the same period in 2001 but down from the fourth quarter. A significant drop in natural gas prices versus the first quarter 2001 will hurt first quarter earnings, the company said.
Sluggish demand and small margins continued to hurt the company's chemicals unit, but first quarter results are expected in line with the previous quarter, Phillips said.
Phillips said its debt-to-capital ratio at the end of the quarter will be 38 percent, up from 37 percent at the fourth quarter's end.
Phillips and Houston-based Conoco Inc. announced merger plans in November with Phillips corporate offices moving to Texas. The deal is expected to close in the last half of the year.