ConocoPhillips

Oil & Gas

ConocoPhillips said it was seeking a “disciplined kind of growth” in their oil production

ConocoPhillips said the company was not seeking to increase production quickly: “companies like ours and other large companies kind of think more of a sustainable growth rate..”“Tim Leach — Executive Vice President of Lower 48: Yeah. I don’t really have a whole lot to add other than to just remind you that underlying decline rate on the Permian is pretty substantial. And so, the increase in activity that we’ve seen from the privates and such will generate more production, and you’ve seen that show up in the numbers. But I think companies like ours and other large companies kind of think more of a sustainable growth rate because that’s really where you get your efficiency is a disciplined kind of growth that allows you to move down the learning curve and lower your cost of supply. ” (ConocoPhillips Q4 2021 Earnings Call, 2/3/2022

ConocoPhillip’s CEO said he was “concerned” and “worried” about the possibility of increasing oil supply in the US

A Wall Street analyst asked ConocoPhillips “are you concerned about the U.S. going back to that level of growth, given the recent history of growth for growth’s sake?” “Doug Leggate — Bank of America Merrill Lynch — Analyst: Thank you. Good morning. Happy New Year, everybody. Ryan, I want to come back to your comments about the Permian. And I just want to ask you philosophically, are you concerned about the U.S. going back to that level of growth, given the recent history of growth for growth’s sake? And we all know how Saudi responded to that in that global market, which despite the post-COVID recovery, still has a relatively pedestrian long-term growth outlook. And how does that play into your strategy? ” (ConocoPhillips Q4 2021 Earnings Call, 2/3/2022

ConocoPhillips CEO: I am absolutely concerned…certainly, if we’re getting back to the level of growth in the U.S. that if you’re not worried about it, you should be and be thinking about.”“Ryan Lance — Chairman and Chief Executive Officer: Yeah. Doug, thanks. No, I am. I think that sits very — not so much at the back of our mind, but right at the front of our mind, I am absolutely concerned about. I think the one change maybe relative to late 2014 and ’15, the last time we were kind of at these levels is just what is the spare capacity sitting in the OPEC+ group. It was quite a different number back at that point in time, and you can — we can all debate what that number is. And the fact that the inventories are down quite a bit globally and certainly here in the U.S. So, I think there’s a little bit of time that we have associated with that. But certainly, if we’re getting back to the level of growth in the U.S. that if you’re not worried about it, you should be and be thinking about. ” (ConocoPhillips Q4 2021 Earnings Call, 2/3/2022

The analyst replied “Yes. Well, I hope your peers are listening.” “Doug Leggate — Bank of America Merrill Lynch — Analyst: Yes. Well, I hope your peers are listening. ” (ConocoPhillips Q4 2021 Earnings Call, 2/3/2022

ConocoPhillips stopped hedging so shareholders could “fully capture the upside of” high oil prices

ConocoPhillips CEO said the company was no longer hedging prices because “shareholders ought to expect full exposure to the upside that we’re experiencing to date.”“Ryan Lance — Chairman and Chief Executive Officer: Yeah, we’re unhedged, Neal. We think shareholders buy our shares because of the upside that it represents in the commodity price and the torque that we have to the upside in the way we set up the company. So, no, we prefer to remain unhedged, and frankly, hedging would do little help. So, we have a very strong balance sheet, which helps us on the downside, and shareholders ought to expect full exposure to the upside that we’re experiencing to date.” (ConocoPhillips Q4 2021 Earnings Call, 2/3/2022

ConocoPhillips’s CEO said the company was no longer hedging for lower prices: “we expect to fully capture the upside of the current price environment.” “Ryan Lance — Chairman and Chief Executive Officer: Now, demonstrating this point and appreciating that it’s helpful for the market to have an accurate sense of our stronger CFO generating capacity, at a WTI price of $75 a barrel with a $3 differential to Brent and a Henry Hub price of $3.75, we estimate our 2022 full-year cash from operations would be approximately $21 billion, which reflects us reentering a tax-paying position in the U.S. this year at those price levels. And our free cash flow for the year would be roughly $14 billion. And of course, we continue to be unhedged across our global diverse production base, so we expect to fully capture the upside of the current price environment. ” (ConocoPhillips Q4 2021 Earnings Call, 2/3/2022