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INVESTOR UPDATE – ConocoPhillips

ConocoPhillips · Nov 1, 2010 · 48 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. INVESTOR UPDATE – ConocoPhillips – slide 1
    Investor Update www.conocophillips.com/investors November 2010
  2. INVESTOR UPDATE – ConocoPhillips – slide 2
    ConocoPhillips 88 B Capital Employed International, integrated, major oil and gas company 40 BBOE captured resources E&P 27% R&M 8.4 BBOE reserves LUKOIL 68% Chemicals 1.8 MMBOED production Midstream Emerging Businesses 2.7…
  3. INVESTOR UPDATE – ConocoPhillips – slide 3
    Key 2010 2011 Initiatives 10 B asset sales program LUKOIL ownership to be sold Strengthen the Balance Sheet Shareholder distributions increased Picture Grow production & reserves per share Increase earnings & cash flow per…
  4. INVESTOR UPDATE – ConocoPhillips – slide 4
    Returns Enhancement Plan Status Plan outlined at 2010 analysts meeting to enhance returns and strengthen financial position Target as of March 2010 Current Status1 NetDebttoCapital 20% 18% Share Repurchase 5 B authorized Target 10B…
  5. INVESTOR UPDATE – ConocoPhillips – slide 5
    Asset Disposition Impacts 2009 Net 2010 Asset Timing Proceeds Reserves Income Production 2010 Disposition Program Syncrude Completed N. Am. E&P Assets 2H 2010 REX Pipeline Deferred 7 B 180 MM 55 MBOED 310 MMBOE Marketing…
  6. INVESTOR UPDATE – ConocoPhillips – slide 6
    LUKOIL Investment B 2.7 7.5 6.3 2.5 1.0 Cumulative Dividends Proceeds from Share Future Dividends & Original LUKOIL Expected Total Net through 3Q10 Sales through 3Q10 Proceeds from Share Investment Cash Benefit Sales…
  7. INVESTOR UPDATE – ConocoPhillips – slide 7
    2010 / 2011 Sources and Uses of Cash B 60 50 9 40 25 10 30 6 20 33 6 27 10 10 5 0 Cash From Asset Sales & Capital Available Dividends Debt Share Remaining Operations LUKOIL Program Cash Reduction Repurchase Cash Cash from…
  8. INVESTOR UPDATE – ConocoPhillips – slide 8
    Dividend Growth COP Quarterly Dividend Growth History of annual increases Quarterly dividend (cents/share) 55 wth 50 o d gr 47 al ize % an n u 41 Current Yield = 3.7% .5 13 36 31 25 20% of operating cash flow 22…
  9. INVESTOR UPDATE – ConocoPhillips – slide 9
    Shareholder Distributions 8 Share Repurchase 7 Dividend 6 5 per share 4 3 2 1 0 2006 2007 2008 2009 2010E* 2011E* Dividend 1.44/sh 1.64/sh 1.88/sh 1.91/sh 2.15/sh 2.20/sh Share 0.9 B 7.0 B 8.2 B 0 4.0 B 6.0 B…
  10. INVESTOR UPDATE – ConocoPhillips – slide 10
    E&P Goals Improve returns, margins, and capital efficiency Convert 10 BBOE resources to reserves over 10 years Deliver production growth Develop highimpact exploration Maintain safety and operational excellence 10
  11. INVESTOR UPDATE – ConocoPhillips – slide 11
    E&P Global Portfolio Alaska North Sea Russia / Caspian 240 MBOED 350 MBOED 55 MBOED 6.0 BBOE Canada 2.3 BBOE 1.6 BBOE 285 MBOED 20.1 BBOE Lower 48 450 MBOED 4.4 BBOE Asia Pacific 190 MBOED 2.1 BBOE 2010 production (Sep YTD)…
  12. INVESTOR UPDATE – ConocoPhillips – slide 12
    Discovered Resource YE2009 Resource by Product BBOE YE2009 Resource by Region BBOE Russia Caspian Middle East & Africa Asia Pacific Lower 48 Gas 28% Alaska Australia North Sea LNG Liquids 9% 63% Canada Canada Arctic…
  13. INVESTOR UPDATE – ConocoPhillips – slide 13
    Proved Reserves Replacement Reserves Replacement % 2010 2014 Reserve Additions 200% Russia Exploration Caspian Middle East & Africa 150% Lower 48 Alaska Asia Pacific 100% Australia 50% North Sea Canada 0% 2005 2009…
  14. INVESTOR UPDATE – ConocoPhillips – slide 14
    Production Outlook Production by Asset Type MMBOED Sources of Growth 2.0 Base + Exploitation Major Projects Dispositions L48 Shale Eagle Ford, Bakken, N Barnett 2010 to 2014 CAGR of 1018% 1.5 Dispositions Dispositions Canadian SAGD…
  15. INVESTOR UPDATE – ConocoPhillips – slide 15
    L48 & W Canada Portfolio Advantages Net Acreage Positions 000s 22 MM net acres with extensive optionality and limited lease expiries Horn River 100 2.5 BBOE net proved reserves Montney 170 WCG Deep (85% proved developed)…
  16. INVESTOR UPDATE – ConocoPhillips – slide 16
    Lower 48 Shale Cash Margins1 /BOE 80 60 39 40 30 20 24 0 2008 2009 2010 YTD 2 3 O&O Taxes & other Cash Bakken drilling Production MBOED Building core areas in Eagle Ford, Bakken 140 and North Barnett 120 100 80 Well…
  17. INVESTOR UPDATE – ConocoPhillips – slide 17
    L48 Eagle Ford Shale Play Delineation Hold 240 M acres in play fairway COP Focus Area Early mover with low acreage costs BB aa nn dd ee rr aa Adding rigs and capital in 2010 SS A ANN A ANNT TOON N II O O GG uu aa dd aa ll uu…
  18. INVESTOR UPDATE – ConocoPhillips – slide 18
    Canada SAGD Cash Margins1 /BOE 80 60 40 29 29 22 20 0 2 2008 2009 2010 YTD 3 O&O Taxes & other Cash Surmont phase 1 NBR Production MBOED Significant 15+ BBOE resource 100 80 2nd largest SAGD producer in Canada 60…
  19. INVESTOR UPDATE – ConocoPhillips – slide 19
    Australia Cash Margins /BOE 100 80 36 29 60 25 40 20 0 1 2008 2009 2010 YTD 2 O&O Taxes & Other Cash Bayu Undan platform Production MBOED LNG project pipeline 150 Future growth driven by: 100 Bayu Undan 50 APLNG 0…
  20. INVESTOR UPDATE – ConocoPhillips – slide 20
    Asia Pacific Cash Margins1 /BOE 100 80 60 43 40 37 29 20 0 2 2008 2009 2010 YTD 3 O&O Taxes & Other Cash North Belut platform Indonesia Production MBOED Highly cash generative legacy position 250 established with 2.1…
  21. INVESTOR UPDATE – ConocoPhillips – slide 21
    Malaysia Major Projects Overview Gumusut 33% Unit WI, Shell operated Sabah Gas PSC 0 50Km 2013 first oil KBBC PSC H Outline Brunei unitization premised at first oil K (30.6% WI thereafter) Ubah KBB KBB 30% WI, JOC operated…
  22. INVESTOR UPDATE – ConocoPhillips – slide 22
    Exploration Reallocating 2010 capital 2010 Exploration Capital 1.3 B1 To best liquids rich shale plays (Eagle Ford, Bakken, N. Barnett) Successful land sale in Horn River 2 ILX & Basin Other Wildcats Appraisal of Poseidon…
  23. INVESTOR UPDATE – ConocoPhillips – slide 23
    2010 Exploration & Appraisal Activity North Atlantic & Europe UK & Norway: Peking Duck HPHT well Poland: Shale gas play Caspian Sea Kazakhstan: N Block wildcat North America onshore Turkmenistan Blk 19 Horn River Basin Azerbaijan…
  24. INVESTOR UPDATE – ConocoPhillips – slide 24
    Downstream Strategy Reduce weighting from 25% to 15% of capital employed Cut exposure to refining margins Consider integrated ventures Maintain operating excellence Safety excellence Environmental stewardship Topquartile…
  25. INVESTOR UPDATE – ConocoPhillips – slide 25
    Downstream Peer Comparison R&M Capital Employed as a % of Total 40% 30% 20% 10% 0% BP CVX RDS TOT COP XOM Refining Capacity 2.7 MMBPD Income per Sales Barrel U.S. 2% ConocoPhillips Core Peers 5 4 23% 3 /BBL 4.96 2…
  26. INVESTOR UPDATE – ConocoPhillips – slide 26
    Financial Strategy Improve returns and capital efficiency Constrain capital spending Shift capital expenditures to E&P from R&M Optimize existing portfolio Sell 10 B of nonstrategic, lower returning assets LUKOIL position Reduce…
  27. INVESTOR UPDATE – ConocoPhillips – slide 27
    ThirdQuarter Overview Adjusted Earnings 1.50 adjusted EPS 2.2 B 1.72 MMBOED E&P production Cash From 93% Refining utilization* Operations 4.3 B 6 B Lukoil share sales 2.7 B debt reduction Cash Return On Capital Employed 8 B…
  28. INVESTOR UPDATE – ConocoPhillips – slide 28
    Capital Structure 100 40 50 80 40 30 29 29 70 27 66 26 33 63 63 31 31 60 24 30 28 56 25 20 40 20 10 20 10 0 0 0 '08 '09 Q1 Q2 Q3 '08 '09 Q1 Q2 Q3 '08 '09 Q1 Q2 Q3 '10 '10 '10 '10 '10 '10 '10 '10 '10 Equity B…
  29. INVESTOR UPDATE – ConocoPhillips – slide 29
    E&P per BOE Metrics E&P Income per BOE E&P Cash Contribution per BOE 25 / BOE 25 / BOE 20 20 15 15 10 10 5 5 4.04 4.77 5.75 10.16 11.64 9.38 9.53 15.55 17.25 18.38 22.85 24.23 22.28 22.30 0 0 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10…
  30. INVESTOR UPDATE – ConocoPhillips – slide 30
    Value Creation Growth Per Share Reserves, production, earnings and cash flow increase Increase Distributions Proactive dividends and share repurchase Stronger Balance Debt reduction Sheet Cash balance and liquidity built…
  31. INVESTOR UPDATE – ConocoPhillips – slide 31
    Appendix 31
  32. INVESTOR UPDATE – ConocoPhillips – slide 32
    Definitions RESOURCE The company uses the term resources in this presentation. The company has estimated its total resources based on a system developed by the Society of Petroleum Engineers. The system classifies recoverable…
  33. INVESTOR UPDATE – ConocoPhillips – slide 33
    2010 Sensitivities MM 1/BBL Crude Worldwide E&P 150 Worldwide R&M (fixed & other coproducts) (fixed & other coproducts) (20) Net Crude Impact 130 1/MMBtu Natural Gas Worldwide E&P 600 Worldwide R&M (utilities) (utilities) (100)…
  34. INVESTOR UPDATE – ConocoPhillips – slide 34
    COP NonGAAP Reconciliations CROCE 3Q10 Q3'10 YTD Numerator EBIDA 1 5,487 16,802 non-core earnings impacts 818 2,421 adjusted EBIDA 4,669 14,381 GAAP CFOA 2 4,339 10,854 3 difference (330) (3,527) Denominator 4 GAAP average…
  35. INVESTOR UPDATE – ConocoPhillips – slide 35
    COP NonGAAP Reconciliations 2005 2006 2007 2008 2009 1Q10 2Q10 3Q10 GAAP R&M U.S. Net Income1 - MM 3,329 3,915 4 ,615 1,540 (19 2) 12 782 198 GAAP R&M U.S. Net Income1 - / BBL 3.31 3.95 4.96 1.76 (0.2 2) 0.06 3.47 0.89 non-core earnings…
  36. INVESTOR UPDATE – ConocoPhillips – slide 36
    COP NonGAAP Reconciliations Lower 48 Australia 2008 2009 Q3'10 YTD 2008 2009 Q3'10 YTD GAAP CFOA - MM 5,895 2,514 2,880 GAAP CFOA - MM 1,017 859 753 GAAP CFOA - / BOE 32.40 14.12 23.60 GAAP CFOA - / BOE 35.36 25.80 31.39 excluded GAAP…
  37. INVESTOR UPDATE – ConocoPhillips – slide 37
    COP NonGAAP Reconciliations 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 1 GAAP E&P Net Inco me - MM 700 725 978 1 ,201 1,832 4 ,114 1,564 GAAP E&P Net Income1 - / BOE 4.04 4.25 5.93 7.14 11.14 2 6.09 9.90 non-core earnings impacts - MM gains…
  38. INVESTOR UPDATE – ConocoPhillips – slide 38
    Backup 38
  39. INVESTOR UPDATE – ConocoPhillips – slide 39
    Lower 48 Portfolio Enhancement Production Profile Approach 100% Rigorous evaluation of assets 90% and opportunities 80% Selective investment 70% Focus on liquids 60% 50% Results 40% 30% Nearterm production growth 20%…
  40. INVESTOR UPDATE – ConocoPhillips – slide 40
    LongTerm Incremental Production MBOED (net) 600 APLNG Qatargas 3 SAGD Projects1 500 400 300 200 100 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Long life, low decline projects with combined F&D…
  41. INVESTOR UPDATE – ConocoPhillips – slide 41
    Lower 48 Eagle Ford Latest Well Results (30 day average) Gas Condensate Total Well MCFD BCPD MCFED 6:1 Livingston 1 2,809 643 6,666 Dobie Ranch 1 5,810 808 10,658 Eskew East 1 5,283 667 9,285 Plomero 3 2,744 850 7,842 F Malek 1…
  42. INVESTOR UPDATE – ConocoPhillips – slide 42
    Lower 48 Eagle Ford COP WellPositioned lk South Texas Eagle Ford Play ha C Depth = 7000 10000 ft in Condensate Trend Gross st Thickness = 50 200 ft Au Fluid type = Oil Isopach Pressure = Normally…
  43. INVESTOR UPDATE – ConocoPhillips – slide 43
    Lower 48 Bakken Cash Margins /BOE 80 60 52 40 41 32 20 0 2008 2009 2010 YTD 1 2 O&O Taxes & other Cash Gas Oil COP leasehold areas Production MBOED Growing current 460 M acre position in 25 highliquids play 20 15…
  44. INVESTOR UPDATE – ConocoPhillips – slide 44
    Lower 48 Barnett Cash Margins /BOE 80 60 40 30 20 22 18 0 2008 2009 2010 YTD 1 2 O&O Taxes & other Cash Gas Oil COP leasehold areas Production MBOED 25 62 M acres; high working interest 20 Majority held by…
  45. INVESTOR UPDATE – ConocoPhillips – slide 45
    Lower 48 San Juan Cash Margins /MCFE 8 6 4 4 2 2 2 0 2008 2009 2010 YTD 1 2 O&O Taxes & other Cash Gas Oil COP leasehold areas Production MBOED Largest consolidated acreage position and 200 largest producer in…
  46. INVESTOR UPDATE – ConocoPhillips – slide 46
    Lower 48 South Texas Cash Margins /MCFE 10 8 6 6 4 3 3 2 0 2008 2009 2010 YTD 1 2 O&O Taxes & other Cash Gas Oil COP leasehold areas Production MBOED Largest operator in trend 40 300 M net acres in core; significant…
  47. INVESTOR UPDATE – ConocoPhillips – slide 47
    Lower 48 Panhandle / Anadarko Cash Margins /MCFE 10 8 6 5 4 4 3 2 0 2008 2009 2010 YTD 1 2 O&O Taxes & other Cash Gas Oil COP leasehold Production MBOED Panhandle: 1.1 MM acres held by 35 production, 19 MBOED 30 25…
  48. INVESTOR UPDATE – ConocoPhillips – slide 48
    Lower 48 Permian Cash Margins /BOE 80 60 36 40 27 22 20 0 2008 2009 2010 YTD 1 2 O&O Taxes & other Cash Gas Oil COP leasehold areas Production MBOED 1,040 M acre leasehold heldby 60 production 50 40 60% 64% 67%…

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