UPDATE 2-Conoco profit beats estimates, asset sales help

Thu Jan 30, 2014 10:38am EST
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By Anna Driver

Jan 30 (Reuters) - ConocoPhillips, the largest U.S. oil company without refining operations, said on Thursday its fourth-quarter profit rose more than expected, helped by the sale of its Algerian business and production of more North American crude oil.

Conoco, which shed its refining business in 2012, has sold billions of dollars of lower-yielding assets to focus on more profitable oil production from North American shale basins, like the Eagle Ford in south Texas.

Now that strategy is beginning to pay off, analysts said.

In a note to clients, Ed Westlake of Credit Suisse dubbed Conoco the best performing large oil company, citing 7 percent growth in cash flow despite asset sales, a reduced share count and more cash on the balance sheet.

Profit in the quarter was $2.5 billion, or $2.00 per share, compared with $1.4 billion, or $1.16 per share, a year earlier.

Excluding items, Houston-based Conoco had a profit of $1.40 per share. Analysts on average had expected a profit of $1.31 per share, according to Thomson Reuters I/B/E/S.

Analysts characterized Conoco's reserve replacement ratio, a measure of a company's ability to find new oil and gas reserves to replace what is produced, as strong.   Continued...