Summary

• ConocoPhillips is one of the world’s leading exploration and production companies.
• ConocoPhillips had operations and activities in 13 countries, $90 billions of total assets.
• ConocoPhillips's proved reserves were 6.6 BBOE as of December 31, 2022.

ConocoPhillips (NYSE: COP, LSE: 0QZA) is one of the world’s leading exploration and production companies based on both production and reserves, with a globally diversified asset portfolio. Headquartered in Houston, Texas, ConocoPhillips had operations and activities in 13 countries, $90 billion of total assets and approximately 9,700 employees at June 30, 2023.

Recent Developments

Second-Quarter 2023 Results

August 3, 2023; ConocoPhillips reported second-quarter 2023 earnings and adjusted earnings of $2.2 billion, or $1.84 per share, compared with second-quarter 2022 earnings of $5.1 billion, or $3.96 per share, and second-quarter 2022 adjusted earnings of $5.1 billion, or $3.91 per share¹.

Production for the second quarter of 2023 was 1,805 MBOED, an increase of 113 MBOED from the same period a year ago. After adjusting for impacts from closed acquisitions and dispositions, second-quarter 2023 production increased 100 MBOED or 6% from the same period a year ago. Organic growth from Lower 48 and other development programs more than offset decline and downtime.

Lower 48 delivered record production of 1,063 MBOED, including 709 MBOED from the Permian, 235 MBOED from the Eagle Ford and 104 MBOED from the Bakken. Turnarounds were successfully completed in Norway and Qatar.

Earnings and adjusted earnings decreased from the second quarter of 2022 primarily due to lower prices partially offset by increased volumes. The company’s total average realized price was $54.50 per BOE, 38% lower than the $88.57 per BOE realized in the second quarter of 2022.

For the quarter, cash provided by operating activities was $3.9 billion. Excluding a $0.8 billion change in working capital, ConocoPhillips generated CFO of $4.7 billion and received $0.2 billion primarily related to a prior year disposition. The company funded $2.9 billion of capital expenditures and investments. In addition, the company paid $1.4 billion in ordinary dividends and VROC and repurchased $1.3 billion of shares.

ConocoPhillips’ six-month 2023 earnings and adjusted earnings were $5.2 billion, or $4.22 per share, compared with six-month 2022 earnings of $10.9 billion, or $8.36 per share, and six-month 2022 adjusted earnings of $9.4 billion, or $7.18 per share.

Production for the first six months of 2023 was 1,798 MBOED, an increase of 78 MBOED from the same period a year ago. After adjusting for impacts from closed acquisitions and dispositions, production increased 82 MBOED or 5% from the same period a year ago. Organic growth from Lower 48 and other development programs more than offset decline and downtime.

The company’s total realized price during this period was $57.63 per BOE, 30% lower than the $82.70 per BOE realized in the first six months of 2022.

In the first six months of 2023, cash provided by operating activities was $9.3 billion. Excluding a $1.1 billion change in working capital, ConocoPhillips generated CFO of $10.4 billion and received disposition proceeds of $0.4 billion. The company funded $5.8 billion of capital expenditures and investments, repurchased $3.0 billion of shares and paid $2.8 billion in ordinary dividends and VROC.

Outlook

Third-quarter 2023 production is expected to be 1.78 to 1.82 million barrels of oil equivalent per day (MMBOED). Full-year production is now expected to be 1.80 to 1.81 MMBOED, as compared to prior guidance of 1.78 to 1.80 MMBOED.

Consistent with raising full-year production guidance for two consecutive quarters, the company updated its 2023 adjusted operating cost guidance to $8.3 billion versus the prior guidance of $8.2 billion and updated full-year guidance for depreciation, depletion and amortization to $8.2 billion versus the prior guidance of $8.1 billion. Full-year guidance for adjusted corporate segment net loss has been lowered to $0.8 billion from $0.9 billion driven by lower net interest expense. On capital, the guidance range has been narrowed to $10.8 to $11.2 billion from $10.7 to $11.3 billion, reflecting ongoing progress on the company’s development plans.

Company Overview

ConocoPhillips is an independent E&P company headquartered in Houston, Texas with operations and activities in 13 countries. The company's diverse, low cost of supply portfolio includes resource-rich unconventional plays in North America; conventional assets in North America, Europe, Africa and Asia; LNG developments; oil sands assets in Canada; and an inventory of global exploration prospects.²

Business Segments

The company manage its operations through six operating segments, defined by geographic region: Alaska; Lower 48; Canada; Europe, Middle East and North Africa; Asia Pacific; and Other International.

The company explore for, produce, transport and market crude oil, bitumen, natural gas, LNG and NGLs on a worldwide basis. At December 31, 2022, its operations were producing in the U.S., Norway, Canada, Australia, Malaysia, Libya, China and Qatar.

Alaska

The Alaska segment primarily explores for, produces, transports and markets crude oil, natural gas and NGLs. ConocoPhillips is the largest crude oil producer in Alaska and have major ownership interests in two of North America’s largest oil fields located on Alaska’s North Slope: Prudhoe Bay and Kuparuk. The company operate Kuparuk in addition to several fields on the Western North Slope, in which ConocoPhillips has 100 percent interest. Additionally, ConocoPhillips is one of Alaska’s largest owners of state, federal and fee exploration leases, with approximately 1.2 million net undeveloped acres at year-end 2022. Alaska operations contributed 16 percent of its consolidated liquids production and two percent of its consolidated natural gas production.

Lower 48

The Lower 48 segment consists of operations located in the 48 contiguous U.S. states and the Gulf of Mexico, with a portfolio mainly consisting of low cost of supply, short cycle time, resource-rich unconventional plays and commercial operations. Based on 2022 production volumes, the Lower 48 is the company’s largest segment and contributed 64 percent of its consolidated liquids production and 72 percent of its consolidated natural gas production.

Canada

The company's Canadian operations consist of the Surmont oil sands development in Alberta and the liquids-rich Montney unconventional play in British Columbia and commercial operations. In 2022, operations in Canada contributed six percent of its consolidated liquids production and three percent of its consolidated natural gas production.

Europe, Middle East and North Africa

The Europe, Middle East and North Africa segment consists of operations principally located in the Norwegian sector of the North Sea; the Norwegian Sea; Qatar; Libya; and commercial and terminalling operations in the U.K. In 2022, operations in Europe, Middle East and North Africa contributed nine percent of its consolidated liquids production and 17 percent of its consolidated natural gas production.

Asia Pacific

The Asia Pacific segment has exploration and production operations in China, Malaysia, Australia and commercial operations in China, Singapore and Japan. In 2022, operations in the Asia Pacific segment contributed five percent of its consolidated liquids production and six percent of its consolidated natural gas production.

Average Daily Net Production

Company History

ConocoPhillips was incorporated in the state of Delaware in 2001, in connection with, and in anticipation of, the merger between Conoco Inc. and Phillips Petroleum Company. The merger between Conoco and Phillips was consummated on August 30, 2002. In April 2012, ConocoPhillips completed the separation of the downstream business into an independent, publicly traded energy company, Phillips 66.³

References

1. ^ https://investor.colgatepalmolive.com/news-releases/news-release-details/colgate-announces-2nd-quarter-2023-results
2. ^ https://fintel.io/doc/sec-conocophillips-1163165-10k-2023-february-16-19404-4613
3. ^ https://www.conocophillips.com/about-us/our-history/1909-1875/