Conoco sees 43% earnings increase for quarter LESS PRODUCTION, HIGH PRICES: Profits from Alaska hit $549 million.

NEW YORK -- Conoco Phillips said Wednesday that first-quarter earnings rose 43 percent as higher oil and gasoline prices made up for a sharp decline in production.
The results weren't as strong as Wall Street had expected, however, and shares fell almost 2 percent.
Conoco, the third-largest U.S. oil company, earned $3 billion in the first three months of the year. Production dropped, however, as the Houston company shed assets to focus on developing oil fields in North America.
Raymond James analyst Pavel Molchanov said Conoco picked a good time to rearrange its operations. The price of oil has risen so high -- 17 percent to nearly $107 at the end of March -- that companies like Conoco were able to earn more money while producing less oil. And higher prices also elevated the value of its assets.
"It's a real seller's market right now," Molchanov said. Oil companies have "found it not only easy to sell properties but at prices that perhaps a year ago would have seemed unrealistically high."
Conoco said oil and natural gas liquids prices increased 27 percent in the quarter to $91.55 per barrel. That made up for a 25 percent drop in production to 1.7 million barrels per day.

ALASKA PROFITABLE
Alaska state Sen. Bill Wielechowski, D-Anchorage, urged Conoco to invest more in Alaska, given its profits from the state.
In its earnings report, the oil giant noted its Alaska profits were $549 million between January and March, far better than in any quarter of 2010.
Wielechowski said more than 28 percent of Conoco's worldwide oil and gas production profits come from Alaska, while only 13 percent of its overall production occurs here.
A study by legislative analysts determined that Conoco Phillips and its partners would reap an estimated 93 percent rate of return on several new investments they are considering in Alaska.
"If that isn't a good enough rate of return, I don't know what is," Wielechowski said Wednesday.

HIGHER DIVIDEND
Conoco said first-quarter income came to $2.09 per share, up from $2.1 billion, or $1.40 per share, a year earlier. Revenue increased 27 percent to $58.25 billion.
Excluding gains from the sale of shares in Russian oil company Lukoil and other assets, the company earned $2.6 billion, or $1.82 per share.
Analysts, who typically exclude one-time items, expected the company to earn $1.93 per share, according to FactSet. Revenue did top expectations.
During the quarter, Conoco spent $1.6 billion to buy back 21 million shares and raised its quarterly dividend by 20 percent to 66 cents.
Excluding properties the company sold, CEO Jim Mulva said oil production fell about 7 percent in the quarter because of weaker production from existing fields in the North Sea, China, the Lower 48 and Alaska. Conoco also experienced a series of unexpected shutdowns.

PIPELINE LEAK
A leak in the trans-Alaska pipeline system stalled oil shipments in January. A supply vessel collided with the company's Britannia platform in the North Sea. Also, Conoco is part owner of oil fields in Libya's Sirte Basin. As the uprising there escalated, Conoco closed offices in the country and evacuated staff.
Together, the unplanned shutdowns cut profits by about $100 million.
Exploration and production profits still increased 28 percent to $2.35 billion when compared with last year.
The refining and marketing business reported a profit of $482 million after posting a $4 million loss in the same period last year. Conoco's refineries benefited from higher fuel prices and profit margins, though lower refining activity along the Gulf Coast pushed total refining activity down to 87 percent in the quarter in the U.S., compared with 88 percent in the same period last year. Mulva said the drop cost Conoco about $50 million in profit in the quarter.