ConocoPhillips (COP - Analyst Report) reported second-quarter 2015 adjusted earnings of 7 cents per share, beating the Zacks Consensus Estimate of 5 cents. The year-ago-quarter adjusted profit was $1.61 per share.

Revenues in the reported quarter decreased to $8,660 million from the year-ago level of $14,701 million. Moreover, revenues widely missed the Zacks Consensus Estimate of $9,816 million.

Exploration and Production

Daily production, from continuing operation, averaged 1.595 million barrels of oil equivalent (MMBOE) in the quarter, up from 1.556 MMBOE in the year-ago quarter. Growth was primarily backed by new production from major projects and development programs, partially offset by normal field decline and downtime.

Price Realization

Average realized price for oil was $58.00 per barrel compared with $103.39 in the year-earlier quarter. Natural gas liquids were sold at $19.62 per barrel, way below the year-ago level of $40.36 per barrel. The price for natural gas was $3.90 per thousand cubic feet compared with $6.82 in second-quarter 2014.

Financials

As of Jun 30, 2015, the company had total cash and cash equivalents of $3,813 million and $24,925 million in debt, with a debt-to-capitalization ratio of 34%.

In the reported quarter, cash provided by continuing operating activities was $2.0 billion. Excluding a $0.3 billion change in operating working capital, ConocoPhillips generated $2.3 billion in cash from operations. In addition, the company funded $2.4 billion in capital expenditures and investments, paid dividends of $0.9 billion, and increased debt by $2.5 billion.

Guidance

For 2015, ConocoPhillips still expects 2–3% production growth. For the third quarter of 2015, production from continuing operations is expected at 1,510–1,550 MBOED, excluding Libya.

Outlook

With leading positions in both natural gas and heavy crude oil in North America, as well as a legacy position in the North Sea and growing exposure to lucrative international regions, ConocoPhillips expects to replace reserves and sustain production growth over the long term.

However, with oil price presumed to remain at low levels in the near future, we don’t see any immediate progress for the upstream player.

ConocoPhillips currently carries a Zacks Rank #3 (Hold).

Some better-ranked players in the energy sector are Linn Energy, LLC (LINE -Snapshot Report), Gulfmark Offshore, Inc. (GLF - Snapshot Report) and Cheniere Energy, Inc. (LNG - Snapshot Report). All these stocks sport a Zacks Rank #1 (Strong Buy).