Higher Natural Gas Prices Boost Oil Firms’ Net

Three major oil companies Monday reported stronger earnings, partly because of higher natural gas prices that have helped results throughout the industry in the July-September quarter.

Atlantic Richfield Co. reported third-quarter profit of $332 million, contrasted with a $156-million loss during the period last year, when it was restructuring through job cuts and property sales.

Quarterly profit at Unocal Corp. rose 22%, with restructuring costs and unusually high environmental and legal charges keeping the increase from being greater.

Phillips Petroleum Co.’s third-quarter earnings rose 75%, mostly because of a $78-million revision of its estimated future taxes. The company’s exploration and production results were helped by natural gas prices, but its refining and marketing business was hurt by higher crude oil prices.

Atlantic Richfield’s $332-million profit, the equivalent of $2.06 per share, came on revenue of $4.8 billion during the third quarter. That contrasted with the loss of 99 cents per share on revenue of $4.4 billion in the July-September period of 1991.

From Arco’s Los Angeles headquarters, Chairman C. Lodwrick Cook said strong results from West Coast refining and marketing operations, $123 million versus $59 million, helped push earnings up along with higher crude oil and gas prices.

Arco’s production-exploration business showed a $232-million after-tax profit, contrasted with a year-earlier loss of $72 million, which included $180 million in charges related to jobs cuts, property sales and write-downs.

Coal operations earned $25 million, contrasted with a $37-million loss in 1991, which included a write-down of $60 million on an Australian mine. Transportation earned $53 million, compared to $16 million; chemicals and specialty products earned $68 million, compared to $37 million.

Bartlesville, Okla.-based Phillips Petroleum earned $99 million, or 38 cents per share, on revenue of $3.13 billion for the quarter ended Sept. 30. In the same period a year ago, the company earned $56 million, or 21 cents per share, on revenue of $3.11 billion.

Not counting the income tax gain and about $36 million in special charges, the company earned $51 million. Earnings before one-time gains in last year’s third quarter were $13 million.

Unocal Corp. said it earned $11 million on revenue of $2.5 billion, compared to $9 million on sales of $2.7 billion during the same period in 1991. Per-share profit was 1 cent versus 4 cents, reflecting $8 million in dividends paid on recently issued preferred stock.

Higher crude oil and natural gas prices helped exploration and production profit rise 48% to $117 million. Refining and marketing profit was $15 million, down from $16 million. Chemicals lost $2 million, contrasted with a $6-million gain; geothermal earned $8 million, down from $11 million.

Excluding one-time charges and gains, the Los Angeles-based firm would have earned $65 million, or 24 cents per share, compared to $23 million, or 10 cents per share, in 1991.

Unocal Chairman Richard Stegemeier said the company has made significant progress in reducing debt as it retreats from businesses outside core operations in the West. Job eliminations and operating improvements are expected to contribute $200 million to after-tax cash flow in 1993, he said.