Friday, January 31, 2014

#AKoil| State of Alaska earns $700 million, Conoco $600 million on 4th quarter production ...

ConocoPhillips's quarterly earnings release usually brings out those who focus on one number -- the company's share of earnings -- without looking at the entire picture.  The company released its fourth quarter 2013 earnings yesterday and I anticipate the usual stories will appear today about the level of the company's earnings with the state and federal government's share of the revenue stream mentioned, if at all, in later paragraphs of the story.

To provide those reading these pages with some perspective, here is how investors look at earnings when considering ongoing investments:

4th Qtr 2013
  • Net Revenues before taxes and royalty:                                  $1.6 billion 
  • Of that, in order of receipt 
    • State of Alaska:                                    $0.7 billion
    • ConocoPhillips                                       0.6 billion
    • Federal Government                               0.3 billion
Full year 2013
  • Net Revenues before taxes and royalty:                                 $6.3 billion
  • Of that, in order of receipt
    • State of Alaska                                     $2.9 billion
    • ConocoPhillips                                       2.3 billion
    • Federal Government                               1.1 billion 
Keep in mind that neither the State of Alaska nor the federal government have made any share of the investment in developing and producing the revenue stream.  As a result, from their perspective, in 2013 investors made 100% of the capital investment and paid all of the expenses, and earned back only 38% (4th Quarter) and 37% (full year) of the net revenues.