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ConocoPhillips, ExxonMobil Report Solid Q1 Earnings

HOUSTON and IRVING, Texas -- ConocoPhillips reported a $2.1 billion profit for the first quarter 2010, more than doubling from last year, reflecting significantly higher crude oil prices and lower operating costs amid improving market conditions.

This was partially offset by lower production volumes, lower worldwide realized refining and marketing margins, and charges. Adjusted earnings per share for the quarter climbed, and topped analysts' expectations by 9 cents per share, according to the company.

In a statement, ConocoPhillips Chairman and CEO Jim Mulva said: "Improving market conditions in the first quarter contributed to increased earnings. Our performance in the first quarter was solid, with Exploration & Production in line with the fourth quarter of the prior year. This allowed us to capture the benefit of significantly improved oil prices. In Refining & Marketing, the U.S. refining capacity utilization rate improved, light-heavy crude differentials widened and we reduced costs."

The Houston-based company reported net income of $2.10 billion for the first quarter, more than doubling from $0.80 billion in the prior-year quarter. The company reported net income of $1.29 billion for the fourth quarter of 2009. Excluding after-tax charges of $110 million for ending participation in the Shah and Yanbu projects, adjusted earnings for the latest quarter was $2.2 billion, according to the company.

ConocoPhillips' Refining & Marketing segment posted a loss for the quarter totaling $4 million, compared to a profit of $205 million a year ago. The company noted that U.S. refining capacity utilization rate was 88 percent, reflecting economic run cuts and turnaround activity, and the international utilization rate was 48 percent.

The company's LUKOIL Investment delivered earnings of $387 million, sharply up from $8 million a year ago. In March, ConocoPhillips announced plans to reduce its equity ownership in the Russian oil company from 20 percent to 10 percent by the end of 2011.

Meanwhile, ExxonMobil reported first-quarter 2010 earnings of $6.3 billion, an increase of 38 percent or $1.75 billion from the first quarter of 2009. The earnings include a charge of approximately $200 million associated with the recently enacted U.S. health care legislation, according to the Irving, Texas-based company.

"Our results reflect higher crude oil realizations and stronger chemical margins, while the downstream industry margins remained weak," ExxonMobil Chairman Rex W. Tillerson said in a statement. "Our solid financial position enabled ongoing investment at record levels through the business cycle. In the first quarter, capital and exploration spending was $6.9 billion, up 19 percent from last year."

Looking at the first quarter 2010 vs. first quarter 2009, downstream earnings were $37 million, down $1.096 billion. Lower refining margins drove the majority of the decline, reducing earnings $1.1 billion. Petroleum product sales of 6,144 kbd were 290 kbd lower than last year's first quarter, mainly reflecting lower demand, Exxon stated.

U.S. downstream recorded a loss of $60 million, down $412 million from the first quarter of 2009. Non-U.S. downstream earnings of $97 million were $684 million lower.

The company's corporate and financing expenses were $800 million, up $364 million from first quarter 2009, mainly due to a charge related to the U.S. health care legislation signed into law in March 2010, and the absence of favorable 2009 tax items.

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