ConocoPhillips First Quarter Earnings Release Preview

Investors to turn their focus on progress of assets sales and oil price outlook, as industry continues to suffer from low energy prices hitting bottom lines.

It’s no secret that oil exploration companies and oil service companies around the world are still feeling the heat of low prices knocking down their revenues as well as their bottom lines. And in the case of ConocoPhillips’s (NYSE:COP), which is due to submit its earnings today, is no different either.

Consensus for the oil major calls for first quarter 2015 production to be at the range of 1,570−1,610 million barrels of oil equivalent per day (MBOED), higher than 1,540 MBOED in full-year 2014.Talking about the expected revenue or earnings per share is relatively useless, since it’s clear that earnings will be disappointing, though it’s still important to emphasize the scale of the losses.

Instead, many investors will focus on the ongoing asset sales program that the oil and gas company has initiated for the past half a year, as it seeks to sell off its unproductive assets, mostly in North America, and has hired financial advisers in the expedite the process. The proceeds, likely to total around less than $5 billion, if all goes well, will be used to help maintain the CAPEX on current projects, and also to help maintain the dividend yield to its investors. All this so that the company secures lesser debt. The asset sales plan will not affect the company’s trimmed down CAPEX spending program till 2017.

Another area that investors will focus on is the future oil prices outlook. Energy prices have been on a relatively upward trend due to Saudi’s hold policy on its oil production finally bringing down shale producers to its knees, with Baker Hugs reporting less than 735 oil wells under operation, down from the significant 1357 rigs that were in operation for past several months. Currently oil prices are hovering between the range of $55- $65.It May likely increase further as many Americans will likely hit the road ahead of July 4^th celebrations, taking advantage of low oil prices, and summer starting to show its face in the Middle East, driving demand on the upside. Don’t be surprised with more oil price rise on the horizon.

ConocoPhillips stock price ended the day flat at $67.74

BP plc to face another lawsuit by Ohio over tank cleanup

On Monday, as reported by Bloomberg, a lawsuit has been filed against BP plc by Mike Dewine an attorney General at Ohio and Underground Storage Tank Compensation Board. The state legal representatives accused the company of taking wrongfully an amount of $33 million from the compensation fund and insurers to get rid of the leaks caused by the company’s storage tanks situated at various different gas stations.

The British oil major along with Amoco Oil and Atlantic Richfield Co, Standard Oil of Ohio, & Standard oil and affiliates are also involved in the lawsuit filed by the state board. Mr. Dewine mentioning the British oil giant said, it was same as every other company and the company must stick to the laws set by state. He further said, BP should be ready to face the music if it did not do anything about its misconduct.

According to Bloomberg, British Petroleum acquisition has provided the companies a way in to various service stations and underground tanks for storage.

According to Mr. Dewine the insurers fund and state board were built to guard the owners of the tanks with no accidental insurance, and the British oil company has misused the situation for its own purpose. Ohio attorney general said the company put out of sight its insurance and applied for reimbursement of the cleanup cost from the state board. The compensation board told that the company claim of $22 billion is still in the pipeline.

The England based Oil Company, who is already finding it difficult to maintain its liquidity; this is considered as a major setback for them. With declining crude oil prices from past 7 months to almost 50% and BP is still stuck in the oil spill lawsuit, which is still in progress and US Federal court is expected to impose a penalty of $13.7 billion on London oil giant.

The company has now considered value program, based on quality instead of quantity. It has reduced its capital expenditures along with a substantial ct in its workforce. Bearing in mind all these sacrifices, these lawsuits will hurt the company’s reputation in front of its shareholders.

As reported by Wall Street Journal, Jason Ryan a Spokesperson at BP plc. said the company will face the lawsuit and its actions will be based on good faith.

BP plc. Stock was trading at $41.74 at market close on Tuesday after it went up by 1.07%.