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REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips

ConocoPhillips · Dec 1, 2011 · 24 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 1
    3 Year Repositioning Plan: 2010 2012 Portfolio Optimization Capital Structure Monetize non-core assets Reduce debt Position for Upstream growth Strengthen financial flexibility Focus capital toward E&P Reduce exposure to…
  2. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 2
    Progress through 2011 Right on Target B 2010 Based on actuals / 2011 First Call estimates 60 CFO exceeds Capex and Dividends by 5 B Asset sale proceeds used for 15 B share repurchase plus debt reduction 50 20 39% of funds returned…
  3. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 3
    Recent Highlights Strong third quarter financial performance 14 B in year-to-date cash from operations 3 B of additional share repurchases Repurchased a total of 12% of outstanding shares since 2010 Margin improvement year over year…
  4. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 4
    2012 Initiatives Portfolio Optimization Capital Structure 2012 asset sales of 5 to 10 B Phillips 66 to issue 8 B new debt Progress major E&P projects COP to retire 5 B debt 100%+ reserve replacement ratio Rationalize low margin…
  5. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 5
    Creation of Two Leading Energy Companies Special dividend of Phillips 66 shares to COP shareholders 1 share of Phillips 66 per 2 shares of COP owned at record date 6 B of cash transferred to COP, majority subsequently used for COP…
  6. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 6
    Positioned to Create Value ConocoPhillips a uniquely positioned E&P company Large, diversified, OECD-based portfolio Size, scale and technical capabilities to do any project globally High impact unconventional resource plays Growth…
  7. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 7
    Phillips 66 Capital Employed by Region2 New Approach to Downstream Europe/ Asia Africa 4% R&M, Midstream & Chemicals 12% Pro forma 2011 Capital Employed 29B U.S. Total Assets 50B 84% Employees1 15M Sector leading dividend Net…
  8. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 8
    Global Refining Position Average Refinery Size U.S. Refining Capacity MBD MBD 240 2500 2000 180 1500 120 1000 60 500 0 0 XOM Marathon NewCo Valero Chevron Tesoro HFC Valero Exxon NewCo MPC Chevron Tesoro HFC Nelson…
  9. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 9
    Key Drivers to Improving Refining Margins Clean Product Yield - % Yield Distillate selectivity 83.8 84.2 Crude advantage 83.3 81.6 Access to markets 2009 2010 2011E 2012E Controllable costs Distillate Yield - % Crude Advantage -…
  10. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 10
    Well-Positioned Chemicals Segment Chevron Phillips Chemical Company (CPChem) CPChem Net Capacity 30 B Pounds / yr 50:50 joint venture with Chevron Specialties, Aromatics Olefins / and Assets of 8 B at 12/31/10 Polyolefins…
  11. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 11
    Strong Midstream Segment DCP 50:50 JV with Spectra Largest U.S. NGL producer 2nd largest gas gatherer and processor 60 plants / 11 fractionators 62,000 miles of pipeline Liquids rich footprint Gas processing plant Propane…
  12. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 12
    The New ConocoPhillips Reserves YE 2010 Unique E&P Company 25% Large, diversified and international reserve and resource position OECD Non-OECD 100%+ reserve replacement 75% Growing production and margins Returns-focused Capital…
  13. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 13
    Global Portfolio Alaska North Sea Russia / Caspian 220 MBOED 280 MBOED 30 MBOED Largest oil & gas High value exploitation Large resource potential producer & major projects Canada 260 MBOED Asia Pacific Lower 48 World class SAGD…
  14. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 14
    Production from Major Projects Fuels Growth Asset / Production Peak Region Major Projects Startup MBOED 700 Jasmine Q4 2012 35 North Sea Ekofisk South Q4 2013 26 600 Eldfisk II Q4 2014 26 SAGD Christina L. (D/E/F/G/H) 2012 2016+…
  15. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 15
    Production Growth & Cash Margin Improvement Production MMBOED 2.0 Production growth of 3-4% CAGR from 2012 to 2016 1.5 Shift towards higher margin Cash Margin < 30/BOE production results in 3-4% CAGR 1.0 in cash margin 0.5…
  16. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 16
    Lower 48 Liquids Growth 7% annual production growth expected between 2011 and 2016 Shift to liquid production: 39% in 2011, 52% by 2016 L48 Production MBOED L48 Cash Margin /BOE Emerging Plays Flat Price (95, 4.4) 600 35 Bakken…
  17. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 17
    Malaysia Projects Generate Growth Major projects include Gumusut, KBB, Malikai and SNP Targeting 2012 SNP and Malikai sanctions 0.4 BBOE discovered resource Shell, Murphy and JOC operated Production - MBOED Expect to invest 0.6…
  18. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 18
    Australia Pacific LNG Production1 - MBOED 120 100 80 60 40 20 0 2012 2013 2014 2015 2016 Current production 23 MBOED (2011) Achieved Train 1 FID Captured economic realignment Signed largest LNG contract in Asia 4.2 mpta…
  19. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 19
    Canada SAGD Production Growth Project Phase Start-up1 Foster Creek A-E 2002 SAGD Production MBOED Christina Lake A-B 2002 250 Surmont 1 2007 CAGR 15% Christina Lake C 2011 Christina Lake D 2012 200 Christina Lake E 2014 Surmont…
  20. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 20
    Cash Flow Per Share Growth 3 4% 1 2% 3 4% 3 4% C AGR 0-1 5% 1 2012 CFPS Production Flat Price Margin Growth at Share 2015 CFPS Growth Margin Growth Forward Curve Repurchase 20
  21. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 21
    Executing 3-Year Repositioning Plan 2010 2012 three year plan to position for long term value creation Plan execution on target after first two years 20 B in asset sales 15 B in share repurchase 24 B in capital expenditures…
  22. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 22
    APPENDIX
  23. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 23
    Non GAAP Reconciliations 3Q10 3Q11 3Q10 3Q11 1 1 GAAP E&P Net Income - MM 1,564 1,762 GAAP R&M Net Income - MM 268 789 GAAP E&P Net Income1 - / BOE 9.90 12.45 GAAP R&M Net Income1 - / BBL 0.94 2.69 non-core earnings impacts - MM…
  24. REPOSITIONING TO UNLOCK POTENTIAL – ConocoPhillips – slide 24
    Non GAAP Reconciliations ROCE E&P - ROCE 3Q11 3Q11 Numerator (MM) Numerator (MM) Net income 2,631 Net income 1,762 After-tax interest expense 153 After-tax interest expense 20 GAAP ROCE earnings 2,784 GAAP ROCE earnings 1,782…

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