2016 Operating Plan Analyst & Investor Update Dec. 10, 2015
2016 Operating Plan Update 1 Introduction Ryan Lance, Chairman & CEO 2 2016 Operating Plan Matt Fox, EVP, Exploration & Production 3 Financial Update Jeff Sheets, EVP, Finance & CFO 4 CEO Closing Remarks Ryan Lance 2
Ryan Lance Chairman & CEO 4
2016 Operating Plan: What to Listen for Today DIVIDEND Dividend is highest priority use of cash REMAINS TOP PRIORITY 7.7B capital program delivers 1-3% volume growth 7.7B 2.5B CAPITAL REDUCTION 7.7B of operating costs represents…
Delivering Value Proposition Compelling Disciplined Dividend Growth Financial Strength 6
2015: ConocoPhillips Acted Decisively Through Downturn 7B CAPITAL REDUCTION 2015E vs. 2014 Brent Price /BBL Exercised capital flexibility 120 100 Captured deflation across supply chain 2Q Call 80 Deepwater Update Accelerated…
2.3B of Non-Core Asset Sales Closed or Under Agreement in 2015 45% of dispositions have no production impact 1,585 1,595 MBOED Disposition characteristics of producing assets 70 95% of production sold in North America MBOED 1,515…
Lower Capital Spending, Lower Cost Structure and Modest Growth Capital Production Operating Costs 20 55% REDUCTION 1,600 3% CAGR 10 20% REDUCTION 16 1,500 12 1,400 8 8 1,300 4 1,200 6 2014 2015E 2016E 2014 2015E…
Matt Fox EVP, Exploration & Production 10
Capital: Major Project Roll-off and Exercising Flexibility 55% CAPITAL REDUCTION 2014 to 2016E April 2015 Analyst Day 11.5B 11.5B 17.1B 0.8B Deepwater Exploration & 10.2B Appraisal 7.7B 2014 2014Actual Actual Major…
Deflation: Continue to Capture Supply Chain Savings Lower 48 Deflation Categories 1B of Savings Captured in 20151 January March 2015 Estimate Other 7% Other 30% Logistics 5% 13% Operating 38% Maintenance Europe Cost 10% 13%…
Operating Costs: Sustainable Savings Captured 25% REDUCTION IN OPERATING COSTS/BOE 2014 TO 2016E April 2015 Analyst Day 9.2B 8.7B 0.4B 9.7B Deepwater Exploration & Appraisal 8.2B 7.7B 2014 Actual 2014 Underlying…
Operating Costs: Delivering Sustainable Savings Organizational Portfolio Optimization Lateral and vertical consolidation Phased exit of deepwater Value-based approach to exploration production operations 15% reduction of global…
Diversified Portfolio Provides a Unique Advantage Capital Canada Surmont 2 on line, adding 10.2B Alaska to low decline base Europe New projects and Europe drilling offset decline New projects and 7.7B Alaska drilling offset…
Lower 48: Exercising Flexibility, Preserving Optionality Average Unconventional Wellhead Breakeven1 2B development spend, focused on unconventionals Independent Companies Integrated Companies Continue to run 13 rigs across Eagle…
Canada: Ramping up Production from Surmont 2 Surmont 2 continues to ramp up Foster Creek G and Christina Lake F startups expected in 2016 Technology development lowering oil sands cost of supply Slower pace of unconventional…
Alaska: New Projects on Line, Maintaining Strong Production Base CD5 & Drill Site 2S on line ahead of schedule and under budget Development drilling at Prudhoe, Kuparuk and WNS GMT 1 project sanctioned and progressing Exploration…
Europe: Legacy Development and Major Projects Continuing focus on lowering cost and improving efficiency Triennial turnarounds planned at Ekofisk and J-Area in 2016 Development drilling in Greater Ekofisk Area Alder project first…
APME: Ramping up Production from APLNG APLNG Train 1 achieved first LNG production 0.6B APLNG capital in 2016, Train 2 first cargo expected 2H16 Development drilling around legacy assets Malaysia major project spend on Malakai,…
2016: Transition Year for Deepwater Nova Scotia 2 exploration wells Cheshire well drilling Monterrey Jack expected to spud 2Q16 2016E Gulf of Mexico E&A Capital High-grading prospects 0.8B Melmar and Gibson wells drilling…
Diverse, Low Cost of Supply Resource Base Drives Growth Beyond 2016 Total 2014 Resources 44 BBOE Reserves 8.9 BBOE Over 16…
Diverse, Flexible and Low Cost of Supply Growth Sources Total 2014 Resources 44 BBOE 2016/2017 Capital Allocation Characteristics 100% 60+ Reserves LNG 8.9 BBOE Oil Sands Europe 50 - 60 Flexible Development Unconv. 40-50 APME…
Jeff Sheets EVP, Finance & CFO 24
Financial Priorities Cash dividend remains top priority Focused on improving financial returns Completion of major projects and structural cost reductions Maintain balance sheet strength to manage market volatility Non-core asset…
Balance Sheet Strength S&P Business Risk Profile Excellent Strong Satisfactory IOC-like size, scale and diversification Rated A by S&P and Fitch, Large Cap Small & Medium A2 by Moodys + E&Ps Cap E&Ps IOCs Strong access to…
Current Plan Closes the Gap on Cash Flow Neutrality 2016 2017 Capital Additional flexibility from completion of APLNG Exercising flexibility to lower capital to 7.7B Flexibility and deepwater exploration program Operating…
Consistent Priorities Across a Range of Prices Disciplined increase in flexible programs Consistent Priorities Expect higher production growth Dividend is first use of cash Higher Prices Maintain structural cost reductions…
Ryan Lance Chairman & CEO 30
What Wins in a Low and Volatile Price Environment ConocoPhillips Portfolio and Strategy Characteristics Role in Driving Shareholder Value Diverse, low-decline base production Stable source of funding to sustain dividend Large, low…
2016 Operating Plan: What You Heard Today DIVIDEND Dividend is highest priority use of cash REMAINS TOP PRIORITY 7.7B capital program delivers 1-3% volume growth 7.7B 2.5B CAPITAL REDUCTION 7.7B of operating costs represents 2B…
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