Company Reports

Differentiating itself from peers big and small, ConocoPhillips has laid out a 10-year plan for restrained investment, steady growth, improving returns, and, importantly, returning cash to shareholders. Its strategy makes Conoco a compelling option in the energy sector, given its commitment to capital restraint and clear policy on return of cash to shareholders. Its low-cost portfolio gives it high-return investment options to grow in a rising price environment while its strong financial position keeps the dividend safe in a downcycle.

ConocoPhillips reported adjusted earnings decreased to $2.9 billion in the fourth quarter, compared with $3.4 billion a year earlier, largely on lower prices but offset by higher volumes. Following its three-tier capital return framework, it paid out $1.4 billion in dividends and variable return of cash and repurchased $1.1 billion in shares. The company also announced it plans to return $9 billion to shareholders in 2024, implying a 6.7% yield. This marks a decrease from the $11 billion distributed in 2023 but is a function of the expectation for lower prices and the company’s variable distribution framework.

Differentiating itself from peers big and small, ConocoPhillips has laid out a 10-year plan for restrained investment, steady growth, improving returns, and, importantly, returning cash to shareholders. Its strategy makes Conoco a compelling option in the energy sector, given its commitment to capital restraint and clear policy on return of cash to shareholders. Its low-cost portfolio gives it high return investment options to grow in a rising price environment while its strong financial position keeps the dividend safe in a downcycle.

ConocoPhillips reported adjusted earnings fell to $2.6 billion in the third quarter, compared with $4.6 billion a year earlier on lower oil and gas prices. Despite the decline, earnings remain robust, supporting continued shareholder payouts. During the quarter, Conoco returned $2.6 billion to shareholders through its three-tier framework of ordinary and variable dividends and buybacks in the third quarter. The company also increased its regular dividend 14% to $0.58 per share given the ongoing strong results and favorable outlook.

ExxonMobil confirmed prior Wall Street Journal news reports by announcing on Oct. 11 its intention to acquire narrow-moat Pioneer Natural Resources in an all-stock transaction valued at $59.5 billion or $253 per share, based on ExxonMobil’s closing price on Oct 5. ExxonMobil shares have been slightly lower since then, implying a per-share value of about $247 based on ExxonMobil’s closing price on Oct. 11 and the exchange ratio of 2.3234 for every one Pioneer share. That is a 22% premium to our Pioneer fair value estimate of $203 per share, which assumes a long-term oil price of $60/barrel. This suggests a modest reduction in our fair value estimate for ExxonMobil once the deal is considered, but that is largely offset by higher oil prices since our last update as well as value assigned to synergies, which nets out leaving our fair value estimate unchanged. The acquisition price implies a long-term oil price of about $70/bbl, which we don't consider unreasonable, suggesting the valuation for Pioneer, while above our fair value estimate, is fair. We see no impediments to the deal closing in first-half 2024 as expected.

ConocoPhillips reported adjusted earnings increased to $2.2 billion in the second quarter, compared with $5.1 billion a year earlier on lower oil and gas prices. The company also continued to utilize its three-tier framework to return cash to shareholders, distributing $2.8 billion in ordinary and variable dividends and repurchasing $3.0 billion in shares through the first half of the year. Management reaffirmed their full-year distribution target of $11 billion remains unchanged.

Differentiating itself from peers big and small, ConocoPhillips has laid out a 10-year plan for restrained investment, steady growth, improving returns, and, importantly, returning cash to shareholders. Its strategy makes Conoco a compelling option in the energy sector, given its commitment to capital restraint and clear policy on return of cash to shareholders. Its low-cost portfolio gives it high return investment options to grow in a rising price environment while its strong financial position keeps the dividend safe in a downcycle.

ConocoPhillips reported first-quarter adjusted earnings decreased to $2.9 billion from $4.3 billion a year earlier, largely on lower oil and gas prices. Following its three-tier capital return framework, it paid out $1.5 billion in dividends and variable return of cash and repurchased $1.7 billion in shares.

ConocoPhillips reported adjusted earnings increased to $3.4 billion in the fourth quarter, compared with $3.0 billion a year earlier, largely on higher volumes and improved realized price. Following its three-tier capital return framework, it paid out $2.4 billion in dividends and variable return of cash and repurchased $2.7 billion in shares.

Differentiating itself from peers big and small, ConocoPhillips has laid out a 10-year plan for restrained investment, steady growth, improving returns, and, importantly, returning cash to shareholders. Its strategy makes Conoco a compelling option in the energy sector, given its commitment to capital restraint and clear policy on return of cash to shareholders. Its low-cost portfolio gives it high return investment options to grow in a rising price environment while its strong financial position keeps the dividend safe in a downcycle.

ConocoPhillips reported adjusted earnings increased to $4.6 billion in the third quarter, compared with $2.4 billion a year earlier, largely on higher oil and gas prices. Following its three-tier capital return framework, it paid out $1.5 billion in dividends and variable return of cash and repurchased $2.8 billion in shares. With the earnings announcement, it also increased the regular dividend by 11% and increased its existing share repurchase authorization to $20 billion. With the previous quarter earnings release, it guided to $15 billion of shareholder returns for 2022. Through nine months, the company has returned $3.3 billion in ordinary and variable dividends and repurchased $6.5 billion in shares.

ConocoPhillips reported adjusted earnings increased to $5.1 billion in the second quarter, compared with $1.7 billion a year earlier, on higher oil and gas prices. Following a 25% increase in the first quarter, management increased shareholder returns by 50%, or $5 billion, for the full year to $15 billion (13% of market capitalization). Through the first half of the year, the company has already returned $1.9 billion in ordinary and variable dividends and repurchased $3.7 billion in shares. It also continued to reduce debt during the second quarter, with $3 billion of its $5 billion reduction target complete.

Differentiating itself from peers big and small, ConocoPhillips has laid out a 10-year plan for restrained investment, steady growth, improving returns, and, importantly, returning cash to shareholders. Its strategy makes Conoco a compelling option in the energy sector, given its commitment to capital restraint and clear policy on return of cash to shareholders. Its low-cost portfolio gives it high return investment options to grow in a rising price environment while its strong financial position keeps the dividend safe in a downcycle.

ConocoPhillips continued to benefit from higher oil and gas prices and greater volumes during the first quarter. Adjusted earnings soared to $4.3 billion compared with $0.9 billion a year earlier. Given the strong performance, management increased shareholder returns 25% or $2 billion for the full year to $10 billion (7.5% of market capitalization). It already returned $2.3 billion during the first quarter through the regular dividend, variable return of cash, and repurchases. We plan to incorporate the latest guidance and results into our model, which along with an updated price deck will result in a fair value estimate increase. Our narrow moat rating is unchanged.

ConocoPhillips ended the year on a high note as it continued to benefit from higher oil and gas prices and greater volumes during the fourth quarter. Adjusted earnings were lifted to $3.0 billion compared with a $0.2 billion loss a year earlier. Full-year 2021 adjusted earnings amounted to $8.0 billion compared with a $1.0 billion loss the year before.

Differentiating itself from peers big and small, ConocoPhillips has laid out a 10-year plan for restrained investment, steady growth, improving returns, and, importantly, returning cash to shareholders. Its strategy makes Conoco a compelling option in the energy sector, given its commitment to capital restraint and clear policy on return of cash to shareholders. Its low-cost portfolio gives it high return investment options to grow in a rising price environment while its strong financial position keeps the dividend safe in a downcycle.

ConocoPhillips benefited from higher oil and gas prices and greater volumes during the third quarter to report adjusted earnings of $2.4 billion compared with a $0.3 billion loss a year earlier. Production excluding Libya increased to 1,507 mboed compared with 1,066 mboed a year earlier largely thanks to the Concho acquisition. Adjusting for acquisitions, dispositions, and 2020 curtailments, third-quarter production increased 2%. Operating cash flow excluding working capital changes totaled $4.1 billion, sufficient to fund $1.3 billion in capital expenditures, $1.2 billion in repurchases, and $0.6 billion in dividends. During the quarter, Conoco increased the dividend 7%. Year to date it has returned $4 billion to shareholders in dividends and repurchases and plans to return $6 billion for full-year 2021.

For the second time in a year, ConocoPhillips is enlarging its holdings in the Permian, with the acquisition of Shell’s shale assets there in a $9.5 billion all-cash transaction expected to close in the fourth quarter of 2021. Conoco is getting a good deal. The $42,000 per net acre places it slightly above recent deals in the region. Meanwhile, adjusting for production value assuming $30,000 per barrel of oil equivalent, the net acre price of $15,600 is higher than its Concho acquisition at approximately $10,000 per net acre. However, the higher valuation accounts for the maturity and high portion of proved developed reserves of the position. Compared with Rystad’s estimated value of $14.7 billion, assuming $60/bbl, it’s a steal. We maintain our fair value estimate and narrow moat rating.

ConocoPhillips reported adjusted earnings of $1.7 billion compared with an adjusted loss of $1.0 billion the year before as production volumes rose 24.5%, including additional volumes from the Concho acquisition, and price realizations increased to $50 per barrel compared with $23/bbl the year before.

Differentiating itself from peers big and small, ConocoPhillips has laid out a 10-year plan for restrained investment, steady growth, improving returns, and importantly, returning cash to shareholders. Its strategy makes ConocoPhillips a compelling option in the energy sector, given its commitment to capital restraint and clear policy on return of cash to shareholders. Its low cost portfolio gives it high return investment options to grow in a rising price environment while its strong financial position keeps the dividend safe in a downcycle.