ConocoPhillips said on Friday weak North American natural gas prices would hurt its third-quarter earnings, and its total oil and gas output would fall nearly five percent from the second quarter.

Conoco's production is expected to be 1.78 million barrels of oil equivalent, excluding its stake in Russian Lukoil, as maintenance on operations in Britain and Alaska reduced output.

Benchmark U.S. natural gas prices in the third quarter fell by 67 percent to $3.39 per million Btu from the year-ago level, while U.S. oil prices fell 42 percent.

Exploration expenses are expected to be about $400 million before-tax for the quarter.

Margins for refining oil into products such as gasoline and diesel fuel also weakened versus both the previous quarter and the year-ago level, and the company's worldwide refinery utilization rates are expected to be in the upper 80 percent range.

U.S. refinery utilization rates were in the lower 90 percent range, the company said, while non-U.S. refineries operated in the upper 70 percent range.

Conoco's Lukoil investment will include a $33 million after-tax gain to align Conoco's previous estimate with Lukoil's actual results released in August.

The company's midstream and chemicals earnings are expected to be slightly higher than in the second quarter.

Shares in Conoco slipped about 0.4 percent in early trade to $45.30 per share.

(Reporting by Matt Daily; Editing by Derek Caney, Dave Zimmerman)

United kingdom Conocophillips Energy