Citi 2015 Global Energy and Utilities Conference Al Hirshberg, EVP, Technology and Projects May 13, 2015
Company Overview 1,610 MBOED Production1 1Q15 North Diversified asset base with significant scope and scale American 24% Liquids Gas Multiple sources of growth LNG + Growing inventory of low cost of supply opportunities…
Core Energy Holding We offer attractive annual returns to shareholders through a compelling dividend, predictable growth and a priority on margins and financial returns. 4
Disciplined Approach for the New World 2012-2014 Plan 2015-2017 Plan Compelling dividend = Compelling dividend Cash flow neutrality in 2017 = Cash flow neutrality in 2017 Improve financial returns = Improve financial returns…
Capital Allocation for a Lower, More Volatile Price Environment Prior Plan 16B/year Exploration Reduce & Re-allocate Execute Plan with Growing Flexibility Major Projects Strategy Drivers 11.5B 11.5B Exploration: Limiting new access…
Flexibility, Resilience and Growth for 11.5B 2-3% PRODUCTION GROWTH 2014-2015 Average Capital 11.5B Production 1.7 MMBOED 1.8 Exploration 1.5 MMBOED 1.6 Major Projects 1.4 1.2 MMBOED Development 1.0 0.8 0.6 0.4 Base…
Financial Priorities Return cash to shareholders through a compelling dividend Achieve cash flow neutrality in 2017 Growth from high-margin liquids Aggressively pursuing cost reductions Exercise increasing capital flexibility…
Committed to Compelling Dividend Dividend Yield Cash dividend is key to our value proposition Highest priority use of funds 4.2% Enhances capital discipline Predictable portion of shareholder returns Differential compared to…
2014-2017: Cash Flow Growth Cash From Operations B 3B of Cash 30 MBOED 1B Operating Flow Growth Net Decline Cost Reductions 200 MBOED Net Growth 16.3 15.5 12.5 2014 Actual 2014 Normalized Liquid and LNG Gas Decline Costs…
Focus on Financial Returns 2014 Cash Return on 2014 Return on Capital Employed Capital Employed Competitive ROCE and CROCE performance 20.4% Continued focus on improving returns 9.4% Improve 2014 to 2017 flat price ROCE by 1.5%…
Diversified, Low Cost of Supply Portfolio Delivering 1.7 MMBOED in 2017 2015-2017 Average Capital 11.5B Alaska Europe 11% of Production Alaska New projects Canada Europe APME offsetting decline 21% of 12% of Production Production…
Lower 48: Low Cost of Supply with High-Value Mix Shift Product Mix Shift to Liquids 4-5B annual investment in 2015-2017 Bakken Gas Focus on Eagle Ford, Bakken and Permian Gas 40% Green Wind River Basin 47% River Basin NGL…
Lower 48 Unconventionals: Industry-Leading Cost of Supply INDUSTRY LEADING COST OF SUPPLY UNCONVENTIONALS Rystad1 Wood Mackenzie2 ITG Investment Research3 Eagle Ford Eagle 80 80 80 Bakken Independent Companies Ford Average…
Eagle Ford: Value-Driven Approach to Full-Field Development 220 M net acres; 2.5 BBOE net resource1 2017 Product Mix NGL Developing on 80-acre high/low spacing 19% Testing triple stack development potential 15 years of drilling…
Eagle Ford: Industry-Leading Performance LOWEST COST OF SUPPLY Lowest Cost of Supply1 Highest Oil Rates per Well2 Highest NPV per Acre3 70 200 90 180 80 Gross Operated Production (BPD) 60 160 70 WTI Breakeven (/BBL)…
Bakken: Growth from Highest Value Part of Play North Dakota MOUNTRAIL ConocoPhillips Acreage 620 M net acres; mostly HBP or mineral fee 2017 Product Mix Minerals 0.6 BBOE net resource1 NGL WILLIAMS 6% Developing at 160-acre…
Permian Unconventional: Appraising Long-Term Opportunity High-graded acreage position 2017 Product Mix NGL 100 M net acres of stacked play opportunity 23% 1 BBOE net resource1 25 years of drilling inventory remaining Oil 50%…
Canada: Growth from Two Vast Resource Positions 2017 Product Mix 1B capital focused on unconventionals and oil sands NGL 7% Exploration drilling offshore Nova Scotia Gas Surmont 2 on track for 2015 startup 29% Production through…
Asia Pacific & Middle East: High-Margin Growth Underway Capital profile reflects completion of several major 2017 Product Mix projects Beijing LNG Oil Bohai Bay Attractive opportunities in Malaysia, China and 38% 27% CHINA…
Alaska: New Projects Maintain Strong Performance in Alaska Beaufort Product Mix - 2017 Beaufort Sea Sea LNG 2% 1H NEWS NGL Colville River Unit Alaska 6% CD5 Gas Oil DS-2S Prudhoe Bay Unit 87% GMT1 5% Nuiqsut Kuparuk River…
Europe: Optimizing Performance in Mature Assets PL720 PL615B 3 major project startups in 2015 2017 Product Mix PL615 PL603 PL718 PL218 Drilling from new infrastructure offsets decline NGL Barents Sea Heidrun 4% NORWAY Norwegian…
Global Exploration: 2015 Exploration and Appraisal Drilling 0.9B Exploration North Slope 1.5B UK & E&A Western Canada Norway Unconventionals 0.6B Appraisal Nova China Lower 48 Scotia Unconventionals Gulf of Mexico Senegal…
Large, Diverse, Low Cost of Supply Resource Base YE 2014 Total Resource 44 BBOE Today 8.9 BBOE proved reserves Proved Reserves 16 year R/P from existing proved reserves…
Growing Our Low Cost of Supply Resource Base 7 BBOE RESOURCE…
Key Takeaways DIVIDEND Dividend is highest priority use of cash REMAINS TOP PRIORITY Cash flow neutrality in 2017 2017 CASH FLOW Predictable growth with disciplined 11.5B capital program NEUTRALITY Ongoing focus on margins and…
Appendix
2012-2014: Successfully Delivered on Our Commitments Operational Financial Strategic 3% production compound 9% cash margin compound Completed 14B in non-core annual growth rate1 annual growth rate2 asset sales 9 major project…
2012-2014: Track Record of Value Creation Total Shareholder Return Since April 30, 2012 14.1% ConocoPhillips Integrated 6.2% Peer Average 4.1% Independent Peer Average S&P 500 Energy -6.1% Peers include: APA, APC,…
2015-2017: Uncertain Price Outlook 140 Brent (/bbl) Wide range of outlooks based on differing 120 views of macro factors 100 112 109 80 99 Global economic outlook 60 Supply and demand response to low oil prices 40 Industry cost…
What Wins in a Lower, More Volatile Price Environment Asset Characteristics Role in Portfolio Stable source of funding to Diverse, low-decline base sustain dividend Investment returns resilient Low cost of supply to lower…
Winning Portfolio: Increasing Flexibility and Returns, Decreasing Cost of…
Capital Allocation for a Lower, More Volatile Price Environment Execute Plan with Growing Flexibility Delivering Profitable Growth 1.7 MMBOED 1.8 1.5 MMBOED 1.6 11.5B 11.5B Exploration Exploration Future Projects Future Projects 1.4…
Completion of Major Projects Increases Capital Flexibility 5 Projects in Execution 4 Canada Future Major Projects Capital Spend (B) 3 APME Canada Canada 2 APME APME Europe Europe 1 Europe Alaska 45% CAPITAL Alaska…
Capital Flexibility Directed Toward Development Drilling 7 Other 6 Other Canada Canada Permian 5 Permian Capital Spend (B) Canada Bakken Bakken 4 Permian Bakken 3 Eagle Ford Eagle Ford Eagle Ford 2 1 Conventional…
Growth in High-Margin Liquids Production (MBOED) 1.8 Liquids growth from major projects at APLNG, Canadian oil sands and Malaysia 1.6 North American 1.4 Unconventional Oil Liquids growth from flexible, low cost of supply Oil…
Committed to Cash Flow Neutrality in 2017 Capital to Maintain Flat Significant capital flexibility in 2017 15.5B Production 2017+ Production growth a function of capital 11.5B for predictable growth 9B to maintain flat…
Balance Sheet Strength and Flexibility is Core Priority New Debt Issuance Rates1 Capacity to fund 2015 and 2016 spending 5% Balance sheet strength to weather price 4% downturn 2.7B of cash at the end of 1Q15 3% 6.2B of unused…
Lower 48 Unconventionals: Prudent Pace Preserves Value & Optionality Priority on protecting value Reducing Cost of Supply Prudent to defer programs in current market Drilling & Completions Efficiency Expect to ramp up activity…
Eagle Ford: Driving Drilling and Completion Efficiencies 2013 2015 Continued drilling and completion efficiencies Job Size Job Size 3.8 MM lbs 7.7 MM lbs Pilot studies optimizing recovery DEEP implementation to reduce drilling days…
Eagle Ford: Maximizing Operating Efficiencies 43% LIFTING COST ADVANTAGE COMPARED WITH COMPETITOR AVERAGE Leading Total Production Efficiency Lifting Cost per BOE Top-tier production efficiency and reliability Integrated…
Eagle Ford: Optimizing Field Development Through Pilot Programs Transition to High/Low Completed 2015: Testing Tighter Spacing and Triple Stack Development 2015 Pilot Program Focus Areas Triple stack pilot tests GR BVI 80-acre1…
Upper Eagle Ford: Pilot Test Results Exceeding Expectations CONFIRMED UPPER EAGLE FORD POTENTIAL Triple Stack Development Strategy Production Performance1 Performance analogous to Lower Eagle Ford Evaluating Austin Upper…
Bakken: Driving Drilling & Completion Efficiencies Wood Mackenzie: Sub-Play Acreage Values (NPV10 per Acre)1 Nesson Anticline TOP Parshall Sanish PRODUCER Fort Berthold Three Forks NESSON ANTICLINE1 Williams Core Bakken 0 5,000…
Bakken: Optimizing Field Development Through Pilot Programs North Dakota Current Testing Tighter Spacing Evaluating Further Upside WILLIAMS MOUNTRAIL 160-acre1 in Bakken / 80-acre1 in Bakken/ Additional Wells in GR BVH Upper Three…
Middle Three Forks: Encouraging Results CONFIRMED MIDDLE THREE FORKS POTENTIAL Three-Layer Development Strategy Production Performance1 Well performance comparable to Upper Three Forks Upper Three Forks Well Middle Executing…
Permian Unconventional: Appraising Multiple Stacked Pays Potential for multiple stacked horizontal wells NEW MEXICO Appraisal results confirming expectations TEXAS Midland Focused on the lowest cost of supply zones Targeting…
Niobrara: Continued Improvement in Performance 120 M net acres in the DJ Basin 2017 Product Mix NGL 23% Encouraging results in liquids-rich basin Continuing to appraise acreage Optimizing completion design and well lateral length…
Lower 48 Unconventionals: High-Value Position with Upside RETURNS REMAIN ATTRACTIVE Similar Returns Expected at Lower Prices Offsetting impacts of lower prices Optimizing full-field development programs Oil Price Deflation…
Western Canada: Appraising and Developing Unconventional Plays North Central South ConocoPhillips Acreage Mix of mature and emerging unconventionals Alberta 6,000 feet of stacked pay Applying learnings from Lower 48 Falher/…
Oil Sands: Significant Growth from World-Class SAGD Portfolio Second largest SAGD producer Top-tier steam-to-oil ratio 100 MBOED growth through 2017 Slowing sanction of new project phases Optimizing production through existing…
Oil Sands: Surmont 2 On Track for 2015 Startup 90% Complete First steam expected in mid-2015 Total Surmont Capital Total Surmont Production First production 3Q15; ramping up through 1 80 2017 Increases gross capacity to 150…
APME: Long-Term Cash Flow Generation from APLNG 90% Complete Startup expected in 3Q15 APLNG Capital APLNG Production 120 2 APLNG JV self funding from 2016 forward 100 1.5 80 MBOED 20 years of long-life, flat…
APME: High-Margin Developments in Malaysia SNP and Gumusut on production South KBB Cluster PSC China Ubah KME KBB complete; awaiting third-party pipeline Sea KBB Malikai SB 311 Pisagan SNP Malikai oil field online in 2017 3E…
West Africa: Exploration and Appraisal Drilling Angola Pre-salt lacustrine carbonate play in Kwanza Basin SENEGAL Vali-1 spud in April 2015 Atlantic Ocean Senegal AFRICA FAN-1 Discovery 3Q14 Cretaceous stratigraphic trap 95…
East Canada: Nova Scotia and Newfoundland Exploration Drilling Nova Scotia NEWFOUNDLAND Cheshire-1 planned spud 4Q15 Targeting Lower Cretaceous and Jurassic 4-way Atlantic Ocean closure NOVA SCOTIA Monterey Jack-1 planned to follow…
Aggressively Pursuing Operating Cost Reductions 2014 Operating Costs 9.7B Cost reduction programs underway to source 1B of reductions in 2016 compared to 2014 SG&A Exploration G&A and G&G Internal costs account for 1/3 of total…
Delivering Capital and Operating Cost Efficiencies Integrated Operations Centers Lowering Costs Operating Cost Reductions 80% Production Under Management1 UK Australia Reduce lifting costs globally 60% Alaska Continue focus on…
Capturing Benefit from Rapid Cost Deflation 9 Land Rigs Highly Stimulation Sensitive Shallow Well Services Water Rigs Midwater Floaters Tubulars Deepwater Rigs 6 Helicopters Sensitivity of Steel Activity Levels Fabricated…
Adding It Up: On Track to Achieve Significant Savings in 2015+ Deflation Materializing In-line with Expectations 715MM Savings Identified To Date1 Line of sight to 715MM savings in 2015 In Progress Operating Other 500MM capital…
Diverse Long-Term Growth from Low Cost of Supply Resource Base Total Resources 44 BBOE Reserves 8.9 BBOE Challenged Resource Stakeholder…
Conventional Resources: Substantial Inventory for Growth North Sea Aasta Conventional Resources Hansteen 24 BBOE 8.7 BBOE 60-75/BOE 45-60/BOE Alaska North Slope Clair Bohai Bay Proved Fiord West NEWS Bear CD5 China…
Unconventional Resources: Top-Tier, Low Cost of Supply Resource Unconventional Resources 25% of resources with cost of…
Unconventional Resources: Unlocking Upside with Technology Common Industry Interpretations Stimulated rock volume (SRV) drives production and recovery Logged and cored fracture-stimulated reservoir Results challenge common…
Oil Sands: Reducing Cost of Supply in Massive Captured Resource 12/BOE COST OF SUPPLY REDUCTION1 ALREADY PROVEN Targeting 25/BOE Reduction in Cost of Supply1 Oil Sands Resources 24 BBOE 5.2 BBOE 60-75/BOE 12/BOE Oil Sands…
Oil Sands: Technology and Optimization Reducing Cost of Supply Proven Technology and Optimizations In Development Technology and Optimizations Central Central Processing Processing Wells Wells 12 Facility 13 Facility /BOE…
LNG: Evaluating Monetization Opportunities Attractive options to backfill or expand LNG Resources Darwin LNG 24 BBOE 3.4 BBOE LNG 60-75/BOE Pre-FEED studies underway to commercialize 1 BBOE net of North Slope gas 45-60/BOE…
Global Deepwater: Developing Low Cost of Supply Discoveries 2015 Drilling Deepwater Resources Previous Drilling 24 BBOE 0.9 BBOE ConocoPhillips Lease 45-60/BOE Gila ConocoPhillips Prospect or Discovery Gibson Tiber…
Annualized Net Income Sensitivities Crude Brent/ANS: 85-95MM for 1/BBL change WTI: 40-45MM for 1/BBL change WCS: 30-40MM for 1/BBL change North American NGL Representative blend: 5-10MM for 1/BBL change Natural Gas Henry Hub:…
2015 Outlook Guidance 2015 DD&A of 9.0B Reflects reserve booking schedule in unconventionals Higher DD&A from major project startups Operating Costs of 9.2B Production and SG&A expense of 8.4B Exploration G&A and G&G of 0.8B…
Investor Information Stock Ticker Investor Relations Contacts: NYSE: COP Telephone: +1 281.293.5000 Website: www.conocophillips.com/investor Ellen DeSanctis: ellen.r.desanctisconocophillips.com Sidney J. Bassett:…
Loading...
