ConocoPhillips, the third-largest U.S. oil company, said Thursday that lower oil and natural-gas prices and significantly lower worldwide marketing margins are expected to hurt first-quarter results.
Despite the seemingly bad news, shares of ConocoPhillips were up more than 5 percent Thursday.
In an overview of market conditions for the January-March period, the Houston-based company also said production likely rose by about 30,000 barrels of oil equivalent from the fourth quarter. Those results include ConocoPhillips' Canadian Syncrude operations but not its Russian Lukoil business.
But lower commodity prices were a problem.
The market price for oil — based on the benchmark West Texas Intermediate — was down $15.52 a barrel from the fourth quarter and $54.97 a barrel versus the first quarter a year ago, the company said in its report, citing figures from Platts, a division of McGraw-Hill Cos.
The market price for natural gas was down $2.04 compared with the first quarter and $3.12 from the year-ago period.
ConocoPhillips noted its actual crude oil and natural-gas prices may vary greatly from the price indicators because of quality, pricing lags and other factors.
The company said its exploration expenses amounted to about $275 million before-tax in the quarter.
ConocoPhillips, like others in the industry, saw its financial results worsen in the second half of the year as crude prices plunged. The company announced 1,300 job cuts in January and, anticipating a difficult 2009, has reduced its capital spending budget by 37 percent this year.
In its report Thursday, ConocoPhillips said it expects to report lower international refining and marketing margins, but higher domestic refining margins.
Refining margins reflect the difference between the cost of crude and what the company makes on refined products such as gasoline.
The company said the utilization rate at its U.S. refineries was about 80 percent in the first quarter, reflecting significant planned maintenance. Many refiners have slowed production in recent months because of growing gasoline stockpiles and lower prices.
ConocoPhillips didn't provide any specific earnings projections for the first quarter, but Wall Street is expecting the results to be far lower than those of a year ago. ConocoPhillips is scheduled to report results April 23.
The average earnings estimate among analysts surveyed by Thomson Reuters is 69 cents a share, well off the $2.62 a share ConocoPhillips posted in the first quarter a year ago.
Its shares have fallen nearly 59 percent from a 52-week high of $95.96, but the stock rallied Thursday, advancing $1.98, or 5 percent, to $41.78 in midday trading.
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-CNBC.com staff contributed to this report.