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2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips

ConocoPhillips · May 11, 2011 · 30 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. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 1
    2011 Annual Meeting of Stockholders May 11, 2011
  2. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 2
    2011 Annual Meeting of Stockholders Jim Mulva Chairman & Chief Executive Officer
  3. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 3
    2010 Decisive Actions Increase ROCE / CROCE Constrain capital to highest return projects Sell assets and reduce debt 10 BBOE resources to reserves in 10 years Grow production per share Reduce refining capacity Increase shareholder…
  4. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 4
    2010 Accomplishments ROCE increased from 7% to 10% Delivered constrained capital program Executed 7 B in asset sales Sold 9 B in LUKOIL shares Debt reduced by 5 B On track to deliver per share growth E&P organic reserve replacement…
  5. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 5
    Business and Political Environment Oil demand increasing; supply challenged Improved international natural gas markets; near term surplus in North America Increased refining margins Continued resource access challenges Difficult…
  6. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 6
    Global Energy Demand 400 Forecast 350 50% Growth 300 250 MMBOED 200 Coal 150 Natural Gas 100 50 Liquids 0 1965 1975 1985 1995 2005 2015 2025 2035 Fossil fuels projected to meet 80% of energy demand in 2035…
  7. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 7
    Summary of Consensus Forecasts ShortTerm: Oil prices to remain strong from Crude Oil 90 105/BBL increasing demand and higher WTI LongTerm: reserve replacement cost 80 110/BBL ShortTerm: Natural Gas 4 5/MMbtu North American…
  8. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 8
    Effective Tax Rates 20062010 ConocoPhillips ConocoPhillips 46% 20062010 Effective Income Tax Rates of Largest U.S. NonFinancial Companies Chevron Chevron 43% ExxonMobil ExxonMobli 42% WalMart 33% Berkshire Hathaway 31% Apple…
  9. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 9
    Tax Proposals make Bad Energy Policy Double tax U.S. U.S. companies less competitive in foreign markets energy companies on foreign Loss of U.S. jobs earnings Loss of control of foreign oil and gas reserves Repeal incentive Loss…
  10. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 10
    Combined Earnings Reinvestment Top 10 Oil & Gas Companies by Market Cap B 2006 2010 Average 100% 180 160 140 120 100 80 60 40 20 0 2006 2007 2008 2009 2010 Earnings Capital Expenditures Todays profits ensure future…
  11. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 11
    Uniquely Positioned to Create Value Cash from Operations Strong OECDbased cash flow 16% Continued noncore asset sales OECD Pipeline of growth projects NonOECD 84% Disciplined capital investment 92 B Capital Employed…
  12. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 12
    ConocoPhillips Strategic Objectives Improve returns on capital employed Expand margins per BOE Organically replace reserves at competitive F&D Enhance exploration portfolio Reduce downstream exposure Increase production per…
  13. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 13
    Key 2011 / 2012 Initiatives Disciplined 28 B capital program Additional 510 B in asset sales 10+ B in share repurchases 100%+ reserve replacement Reduce refining capacity Continued ROCE and CROCE improvement 13
  14. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 14
    2011 / 2012 Cash Sources and Uses B 70 60 50 510 28 40 Additional Share 30 38 Repurchases 7 2 Additional Capex 20 11 10 10 510 0 Beginning Cash Cash from Asset Sales Capital Program Debt Reduction Share Available Cash &…
  15. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 15
    Improved Financial Flexibility DebttoCapital Ratio 35% 30% 20 25% debttocapital target 25% 20% 90% fixedrate debt 15% Wellstructured debt 10% maturity profile 5% Strong liquidity position 0% XOM CVX RDS COP BP TOT No need…
  16. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 16
    Annual Dividend Increases COP Quarterly Dividend Growth 66 14% CAGR Quarterly dividend (cents/share) 55 47 50 Nine consecutive annual increases 41 36 Current yield = 3.6% 31 22 25 20% of operating cash flow 20…
  17. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 17
    Shareholder Distributions 12 Share Repurchase Dividend 10 8 per share 6 4 2 0 2006 2007 2008 2009 2010 2011E Dividend/Share 1.44 1.64 1.88 1.91 2.15 2.64 Dividend 2.3 B 2.7 B 2.9 B 2.8 B 3.2 B 3.6 B Share Repurchase…
  18. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 18
    2010 Company Safety Performance Recordable Incident Rates Incidents per 200,000 hours worked 1.6 Improvements in both employee 1.2 and contractor workforce Total Recordable Rate 0.8 Improved performance across all 0.4…
  19. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 19
    Environmental Stewardship High operating standards Respecting the environment where we operate Controlling the impact of our businesses Informing the public 19
  20. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 20
    Upstream Strategic Objectives Safety and operational excellence 100%+ organic reserve replacement 2 3% longterm production growth Convert 10 BBOE resources to reserves over 10 years Competitive F&D cost Highimpact exploration…
  21. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 21
    Production Outlook Production by Product MMBOED Sources of Growth 2.5 Liquids LNG Int'l gas N America gas Asia Pacific APLNG, Malaysia, Indonesia 2.0 North Sea Jasmine, Clair, Ekofisk, Eldfisk 1.5 Caspian 1.0 Kashagan L48…
  22. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 22
    Proved Reserves Replacement Reserves Replacement 2011 2015 Reserve Additions 200% Russia Exploration Caspian 2010 Organic Middle East RRR = 138% & Africa 150% Lower 48 100% Asia Pacific Alaska 50% North Sea Canada…
  23. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 23
    Production per Share Growth BOE Production / Share 0.58 Nearterm production decrease offset by share 0.54 repurchase program 0.50 Absolute production 0.46 growth expected long term 0.42 0.38 2011E 2012E 2013E 2014E…
  24. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 24
    Downstream Strategic Objectives Global Refining Capacity MMBD Drive operational excellence Improve ROCE 2.7 2.4 2.2 1.9 Reduce refining capacity 2010 2011E 2012E 2013E Maximize upstream Downstream ROCE integration value Improve…
  25. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 25
    Maintenance and Safety Spending Trends Total U.S. Refining Maintenance and Safety Spending 2,000 1,600 1,200 MM 800 400 2003 2004 2005 2006 2007 2008 2009 2010 2011E Average growth in spend is 13% per year U.S.…
  26. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 26
    Delivering Shareholder Value 100%+ reserves replacement Strong OECDbased cash flow Continued asset sales Production/share growth Pipeline of growth projects Improved returns Disciplined capital investment EPS/CFPS growth…
  27. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 27
    Total Shareholder Return 1 Year 5 Year 10 Year (1/1/201012/31/2010) (1/1/200612/31/2010) (1/1/200112/31/2010) 50% 8% 14% 12% 40% 10% 12% 30% 8% 39% 6% 4% 20% 6% 5% 4% 7% 10% 15% 2% 3% 2% 1% 0% 0% 0% COP Peer Avg S&P…
  28. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 28
    2011 Annual Meeting of Stockholders May 11, 2011
  29. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 29
    2011 Annual Meeting of Stockholders Appendix
  30. 2011 ANNUAL MEETING OF STOCKHOLDERS – ConocoPhillips – slide 30
    COP NonGAAP Reconciliations COP - ROCE R&M - ROCE 2009 2010 2010 Numerator (MM) Numerator (MM) Net income 4,492 11,417 Net income 192 After-tax interest expense 838 772 After-tax interest expense 0 GAAP ROCE earnings 5,330 12,189…

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