ConocoPhillips reported a $1.1 billion net loss for the second quarter as the company’s production exceeded its previous guidance.
The Houston-based company reported a second quarter an after-tax net loss of about $1.07 billion, or a loss of $0.86 per share, compared with a second quarter 2015 net loss of $179 million.
Adjusted earnings, excluding special items, came in at a loss of $985 million compared to a profit of $81 million in the prior year quarter.
ConocoPhillips said that adjusted earnings were lower compared with second quarter 2015 primarily due to lower realized prices.
ConocoPhillips booked $159 million in after-tax impairments for the second quarter.
Special items for the second quarter were related to non-cash impairments in the Lower 48, primarily in the Gulf of Mexico, pension settlement expense, deferred tax adjustments and a gain on an asset sale.
Production and operating expenses for the second quarter declined to $1.44 billion, down from $1.79 billion in the year ago quarter.
Operating costs fell to $1.75 billion in the second quarter compared to $2.16 billion in the second quarter of 2015.
Cash provided by operating activities in the second quarter was $1.26 billion.
Excluding a change in operating working capital, ConocoPhillips generated $1.23 billion in cash from operations and received proceeds from asset dispositions of $0.2 billion.
ConocoPhillips said that it reduced its debt by $0.8 billion in the second quarter.
The company’s total realized price was $27.79 per barrel of oil equivalent, compared with $39.06 per BOE in the second quarter of 2015.
Production for the second quarter was 1.546 million barrels of oil equivalent per day (boed), a decrease of 49,000 boed compared with the same period a year ago.
The company said decrease was tied to normal field decline, dispositions, planned downtime and the impact of wildfires in Canada.
Growth from major projects, development programs and improved well performance helped offset those declines, the company said.
Despite the decrease, ConocoPhillips said that second quarter production exceeded its guidance.
When adjusted for 95,000 boed tied to dispositions and downtime, production increased 3 pernce to 46,000 boed.
The company has increased its full-year 2016 production guidance to 1.54 to 1.57 million boed thanks to strong year-to-date performance across most of its portfolio.
Third-quarter 2016 production guidance is set at 1.51 to 1.55 million boed, reflecting “significant planned turnaround activity” during the quarter.
ConocoPhillips added that it has lowered its 2016 capital expenditures guidance from $5.7 billion to $5.5 billion.
“The price environment remains challenging, but our business is running well and we continue to beat our production, capital expenditures and operating cost targets,” ConocoPhillips chairman and CEO Ryan Lance said.