Strong earnings for 2 oil giants

Two oil companies on Thursday reported strong fourth-quarter earnings as crude prices jumped at the end of last year and costs remained under control.

Both Royal Dutch Shell, the Anglo-Dutch oil major, and ConocoPhillips, the Houston independent, reported their best profits in years as the industry’s recovery from a two-year oil bust picks up speed.

Shell’s fourth-quarter profit more than doubled to $3.81 billion from $1.54 billion in the same quarter a year earlier, the company said. The average price Shell received for its oil rose 24 percent from a year earlier to $55.28 a barrel.

Despite the buoyant earnings, Shell’s share price fell amid investor concern that a 21 percent drop in third-quarter cash flow would delay a planned share buyback. Shell announced an interim dividend of 47 cents a share for the fourth quarter, the same as a year earlier

Shell said the drop in cash flow was due mainly to a $2 billion charge related to the cut in U.S. corporate tax rates approved by Congress recently. While Shell expects the changes to boost earnings, the company had to revalue its deferred tax position to account for the lower tax rate.

Shell and other oil companies slashed costs and reined in investment as they sought to adjust to an era of lower oil prices after crude plunged to less than $30 a barrel in 2016 from more than $100 two years earlier. Even with the rebound in oil prices and earnings, CEO Ben van Beurden

promised “continued discipline.”

ConocoPhillips CEO Ryan Lance also promised discipline as his company’s fourth-quarter earnings swung from a small loss in 2016 to a big profit. ConocoPhillips said its profit jumped to $1.58 billion in the last three months of the year compared to a $35 million loss during the same period a year ago.

Most of those earnings came courtesy of an extra $900 million from favorable changes in the U.S. tax law and a $337 million settlement with Ecuador. Without those, ConocoPhillips still would have earned about $400 million in the fourth quarter.

ConocoPhillips said it recently paid $400 million to The Woodlands’ Anadarko Petroleum to acquire its 22 percent stake in Alaska’s Western North Slope development.

The oil and gas producer also said it will increase the quarterly dividend from 26.5 cents a share up to 28.5 cents.

ConocoPhillips said it also is moving forward with a share buyback program and a plan to pay down $2.25 billion in debt.

“While the outlook for commodity prices has improved, our operating plan remains unchanged and we have already taken clear actions to demonstrate our commitment to maintain discipline and follow our priorities,” Lance said.