Conocophillips · NYSE:COP
Conocophillips — Investor Presentation (May 2014)
65 slides from Conocophillips's investor presentation, May 27, 2014
Slide 1: Company Overview
SAFETY North Sea r REPUTATION set FOP Portioiic Optimization GROWTH innovation ENERGY BAKKEN SPIRIT Values technology COLLABORATION Ekofisk South ConocoPhillips Company Overview
Slide 2: Cautionary Statement
Cautionary Statement The following presentation includes forward-looking statements. These statements relate to future events, such as anticipated revenues, earnings, business strategies, competitive position or other aspects of our operations or operating results. Actual outcomes and results may di
Slide 3: Our Objective is to Deliver Double-Digit Returns to Shareholders
Our Objective is to Deliver Double-Digit Returns to Shareholders We offer the marketplace an E&P investment that delivers sustainable double-digit returns annually to shareholders through cash flow growth and a compelling dividend.
Slide 4: Our Value Proposition is Unchanged
Our Value Proposition is Unchanged ° 3-—5% production growth rate ° 3-—5% margin growth rate ° Compelling dividend ° Ongoing priority to improve financial returns * Relentless focus on safety and execution Production and cash margin reflect compound annual growth rates. Unless otherwise noted, this
Slide 5: Unmatched Position Today
Unmatched Position Today 1,530 MBOED Production! — 1Q14 a * Diversified asset base with scope and scale North Liquids American . ay“ ° Multiple sources of growth mera Oy ay ° Massive positions in key resource trends as * Growing portfolio with options and choices 8.9 BBOE Reserves — YE 2013 * Relati
Slide 6: 2014: Set for Growth
2014: Set for Growt * Significant shift in capital toward development programs Exploration & Exploration & Ree * 2013: 1,472 MBOED! is base for growth Major Projects ° 2014: Expect 3-5% production growth Major Projects * Range of 1,510-1,550 MBOED * Expect to exit 2014 at >1,600 MBOED Development *
Slide 7: Capital Allocation Drives Profitable Growth
Capital Allocation Drives Profitable Growth 2.0 poR 18 = North American 0 16 >$40/BOE Margin Unconventional 45% of Capital 0 I |_| [| || 14 CAPITAL ALLOCATED TO z >$30/BOE MARGIN < CATEGORY 10 B 7m 0 0.8 0.6 0.4 0.2 $10-$15/BOE Margin ~ : 5% of Capital ; ; ; 7 2014-2017 2013 2014 2015 2016 2017 Marg
Slide 8: Production Growth Drives Cash Margin Improvement
h American entional LNG North American "Excludes Libya 8 Gas in Production Growth Drives Cash Margin Improvement 3-5% PRODUCTION GROWTH DRIVES CASH MARGIN GROWTH North American Unconventional North American Gas >40 ~22% >40 ~10% 30-40 ~21% 30-40 ~1% 30-40 ~A% 10-15 ~(6)% ‘ConocoPhillips
Slide 9: High-Margin Growth Generates Long-Term Cash Flow Improvements
High-Margin Growth Generates Long-Term Cash Flow Improvements Cash From Continuing Operations’ re * Continued cash margin growth in 2014+ * Ongoing production mix shift * Increased production in areas with more favorable fiscal regimes * Declining production in North American natural gas fields ° 3-
Slide 10: Committed to Shareholder Returns
Committed to Shareholder Returns Dividend Yield _ * Compelling dividend remains key to our value proposition ee st * Highest priority use of cash ° Enhances capital discipline ee Po * Predictable portion of shareholder returns a ° Differential to independent peers | | s * Dividends expected to incre
Slide 11: The Power of Portfolio: Margins, Decline Rates and Returns
The Power of Portfolio: Margins, Decline Rates and Returns f)$10-15/BOE Margins {| $30-40/BOEMargins _— J >$40/BOE Margins North American Unconventionals ° Short-cycle cash flow ° Avoid over capitalizing High>25% North American ° Increases capital intensity of portfolio Conventional Oil ° Medium-cyc
Slide 12: Advantaged Portfolio and Capabilities
ched Portfolio and Capabilities Montney "4 Duvernay ’ , * Great positions in proven and emerging plays an 3 Bakken As, al) rt- 5 Qe Z * Decades of drilling inventory with upside @ Barnett ° Eagle Ford and Bakken sweet spots ° Exceptional growth in high-margin resource base Niobrara <) Permian Eagle
Slide 13: Eagle Ford: Significant Resource Increase
Eagle Ford: Significant Resource Increase ° 221M net acres; acreage capture complete ° 96% average operated working interest ° 1.8 BBOE to 2.5 BBOE net EUR increase © >3,000 identified drilling locations * Outlook based on 12-rig program * $20-25/BOE full-cycle F&D cost 700 MIMBOE ~| RESOURCE INCREA
Slide 14: Eagle Ford: Premium Value from Best Wells in the Play
Eagle Ford: Premium Value from Best Wells in the Play 250 5 200 + . | | | | ft | 0 ConocoPhillips Competitors B G 6 Gross Operated Production (BPD) 3 1Texas Railroad Commission, 2013 14 is per Acre ($M) 60 50 40 ° conocdPhilips Competitors 2Wood Mackenzie ConocoPhillips
Slide 15: Bakken
15 2014-2017 * 620 M net acres; mostly HBP or mineral fee ° 45% average operated working interest ° 600 MMBOE net EUR * >1,800 identified gross drilling locations * Outlook based on average 10-rig program * $20-25/BOE full-cycle F&D cost 12014-2017 average ‘ConocoPhillips
Slide 16: Bakken: Advantaged Position in the Heart of the Trend
Nesson Anticline Parshall-Sanish, Fort Berthold Williams Core West Nesson Northern Mountrail Elm Coulee Dunn County Williams Perimeter West McKenzie North Williston Southern Fringe 20 Gross Operated Production (MBD) *Wood Mackenzie. 16 Bakken: Advantaged Position in the Hear of the Trend a 5 _ * Mon
Slide 17: Permian Unconventional: Early Appraisal Results Encouraging
Permian Unconventional: Early Appraisal Results Encouraging New Mexico Pi Su il | Texas fee uies = * 150M net acres in Delaware Basin; 90 M net acres in dunay| : : : Midland Basin xt iS NINES | DAWSON | BORDEN u ote wt ° Thick column of both shale and tight rock intervals * Four rigs running in Dela
Slide 18: Niobrara: Early Appraisal Results Encouraging
Niobrara: Early Appraisal Results Encouraging ADAMS ° 130M net acres in the DJ Basin _ * Appraisal program ongoing; 2 rigs running “ows * 18 horizontal wells planned for 2014 ARAPAHOE “ * Optimization of drilling and completions design DOUGLAS ELBERT ° Average early rates from new design >600 BOED G
Slide 19: LNG
19 Average Capital 250 | 200 ~$1.5B = Bo 2 >$40/B0E = it AVERAGE MARGIN 50 2014-2017 Production ¥ / 2014-2017 * Oil-linked contracts; robust cash flows ° Darwin and Qatar: High-liquids yield; premium markets ° Kenai: Restarting for seasonal exports ¢ AKLNG: Studying feasibility of North Slope gas ‘|
Slide 20: World Class SAGD Portfolio
f Fisatesi eFort McMurray Surmont Thornbury 1 7 5 Narrows| Lal “e Crow Lake = oe McMillian Lake Foster Creek * ah i _lee ConocoPhillips Acreage $30-40/BOE AVERAGE MARGIN 2014-2017 1PC basis for cash margin. 2014-2017 20 MBOED 2013 2017 orld Class SAGD Portfolio * Second largest net SAGD producer * T
Slide 21: International Oil & Gas: Major Projects Driving Growth
International Oil & Gas: Major Projects Driving Growth Nor * Strong legacy positions * 130 MBOED major projects growth expected by 2017 * 2013: Ekofisk South and Jasmine started on schedule ® ° 2014: 5 projects in Europe and Malaysia (S ‘ Malaysia indonesic® 4; s * 2015-2017: 7 projects expected to
Slide 22: North American Conventional Oil: Protecting and Growing the Base
North American Conventional Oil: Protecting and Growing the Base 4 — 2 » Development drilling and major projects in Alaska : se 1! | * Infill drilling and waterflood expansion in the Permian * Drilling and expanded waterflood recovery at Ursa * Liquids-focused drilling in the Anadarko Basin * Techno
Slide 23: North American Gas: Low-Cost Option on Significant Resource Base
North American Gas: Low- Cost Option on Significant Resource Base * Capital program focused on liquids-rich gas ¢ ~$1.10/MCE lifting cost ¢ 6.5 BBOE total resource * >15,000 identified well locations ¢ ~$1.5 billion annual cash from operations at $4/MCF gas Oil 4% l NGL 18% "| $10-15/BOE AVERAGE MAR
Slide 24: Testing Global Portfolio
folio Testing Global Po Greenland drents tic Basin Azerbaijan e China Sichuan priMexiess Bangladesh Myanmar? Malaysia Colomby Midd - Magdalena Indonesia Ang Kwa Australia 2014 priling Activity) Unconventional @ Deepwater @ Other Conventional @ +Based on high bid award on Block AD-10. 24 ‘ConocoPhill
Slide 25: Appraising Gulf of Mexico Discoveries
Appraising Gulf of Mexico Discoveries Tiber * 18% working interest * Lower Tertiary oil discovery in 2009 * Multiple reservoir intervals ee ee ee ee gta % T * Appraisal commenced in 2013; continues in 2014 wes € aoe es ¥ - 4 Shenandoah ’ * 30% working interest | ate. ie [ conocoPhillips Acreage * Lo
Slide 26: Angola: Deepwater Exploration
Angola: Deepwater Exploration * Block 36: 50% working interest; operator * Block 37: 30% working interest; operator * Pre-salt lacustrine carbonate play in Kwanza Basin * Analogous to Brazilian Santos/Campos Basins and recent discoveries on adjacent blocks * Kamoxi-1 well planned for Block 36 in 2Q
Slide 27: Key Messages
Key Messages ° Value proposition unchanged * Growth underway in 2014 * Significant identified resource upside in unconventionals * Visible options and choices for organic growth beyond 2017 * Strategic linkage between capex, volume growth and margin expansion * Cash flow is growing, financial positi
Slide 28: Supplemental Slides
SAFETY ConocoPhillips technology North Sea REPUTATION set fOKreorifoiic Optimization GROWTH innovation ENERGY BAKKEN SPIRIT Values COLLABORATION Ekofisk South Supplemental Slides
Slide 29: Our Strategy Achieves Value Proposition
Our Strategy Achieves Value Proposition ; 2.0 15% Exploration & Delivers 2017+ gio cRER | 18 Appraisal growth + | 16 Generates 30% Major Projects strong production 14 growth } 12 = 5 10 8 m ie] 0.8 45% Development Mitigates base Programs decline p oe + 0.4 + 0.2 10% Se es) Protects the base r ; T T
Slide 30: 2012 – 2013: Delivered on Milestones and Achieved Peer-Leading TSR
2012 — 2013: Delivered on Milestones and Achieved Peer-Leading TSR ° Proceeds of $12.4 billion from sale of Total Shareholder Return Since April 30, 2012 non-core assets 22.6% 3Change from 2012 to 2013 on actual prices Peers include: APA, APC, BG, BP, CVX, DVN, OXY, RDS, TOT and XOM Represents two-y
Slide 31: Diversified and High-Margin Reserve Base
Diversified and High-Margin Reserve Base 8.9 BBOE Reserves — YE 2013 By Region By Product By Margin* North American Other NGL North American 4% Gas Unconventional Asia Pacific & Alaska ; = Middle East 8% Oil 8% LNG Natural — B1% Gas International 29% Oil and Gas Europe Oil Sands Canada Lower 48 9% 2
Slide 32: Current Status of Unconventional Plays
Current Status of Unconventional Plays EXPLORATION APPRAISAL FULL-FIELD ACREAGE BASIN MODEL E J OPTIMIZATION DEVELOPMENT CAPTURE CALIBRATION Scientific Pilot Design Sweet Spots in the Best Plays Optimal Fracture Stimulation Design Delivering Capital Efficiencies Optimal Well Spacing & Placement Oper
Slide 33: Disciplined Pace of Development Maximizes Value
Disciplined Pace of Development Maximizes Value | [ Driven by Growth | Faster Cash from Operations
Slide 34: Acreage in Heart of the Sweet Spot
reage in Heart of the Sweet Spot ATASCOSA, Gi ConocoPhillips Acreage ‘ GB Dry Gas LB Dry Gas "|" ¢ _ ( Volatile Oil, Cond, Wet Gas L1 Volatile Oil, Cond., Wet Gas LEN ao GH Black Oil BH Black oil Pressure Maturity Thickness sw Clay Rich Poor Fracability Less Organics Geology Quality Organics Good 00
Slide 35: Eagle Ford: Value-Driven Approach to Well Density
Eagle Ford: Value-Driven Approach to Well Density 2013 2014 Transition to High/Low Evaluating Further Upside Lower Eagle Ford 80-acre! Single Layer Lower Eagle Ford 80-acre! High/Low Lower Eagle Ford 40-acre” 1.8 BBOE EUR 2.5 BBOE EUR Upper Eagle Ford/Austin Chalk Austin Chalk a Pa DER EVALUATION z
Slide 36: Scientific Piloting: Accelerating Pace of Learning
Scientific Piloting: Accelerating Pace of Learning Vertical Monitor Wells Post-Stimulation Pysaueer Pilot Well
Slide 37: Eagle Ford: Value-Driven Approach to Fracture Stimulation Design
Eagle Ford: Value-Driven Approach to Fracture Stimulation Design Optimizing Proppant Density is Ss & ° Extensive pilot testing to verify stimulation models * Constantly enhancing fracture stimulation design 330% sa 6 ° 30% increase in EUR per well from increased proppant ei ° >100% production increa
Slide 38: Eagle Ford: Delivering Capital Efficiencies
Eagle Ford: Delivering Capital Efficiencies * ~40% reduction in drilling days 100% > « ~40% reduction in completion cost per unit of proppant 80% ° 75% of 2014 wells benefit from multi-well pad drilling 60% 40% * Leveraging size to realize contract savings 20% * Testing additional drilling and compl
Slide 39: Drilling Execution Efficiency Platform (DEEP)
Drilling Execution Efficiency Platform (DEEP) 1,250 1,100 Drilling Rate (feet/day) © 3 800 + Without DEEP 20% Faster DEEP Improvement Real time analysis With DEEP Increased drilling * Optimizes drilling performance in real time * Currently being field piloted in Eagle Ford and Permian * Demonstrated
Slide 40: Bakken: Optimal Well Spacing and Placement
Bakken: Optimal Well Spacing and Placement Middle Bakken Three Forks Middle
Slide 41: Bakken: Delivering Capital Efficiencies
Bakken: Delivering Capital Efficiencies 100% 80% 60% 40% 20% 0% 100% 80% 60% 40% 20% 0% 41 7 29% Improvement 2010 2011 2012 2013 2010 2011 2012 2013 nparison to 2010 average days spud to spud nparison to 2010 average completion cost per unit of proppant * ~30% reduction in dri ling days * ~50% reduc
Slide 42: Other N.A. Unconventionals: Strong Position in Emerging Plays
Other N.A. Unconventionals: Strong Position in Emerging Plays ri Monney va = ens ae 4 * >500 M net acres under appraisal bakken A J Gi (E- a * Key programs in Permian, Niobrara and Canada * Focused on high-margin, liquids-rich opportunities Niobrara | qusiic : * Leveraging Eagle Ford and Bakken lear
Slide 43: Canada: Appraising Montney and Duvernay
Canada: Appraising Montney and Duvernay Montney * 230 Mnet acres * 90% average working Interest * Focused on 135 M net acres with 30-40% liquid yield * 14 horizontal wells planned for 2014 ° Access to existing infrastructure nA LB ConocoPhillips Acreage Ce a Duvernay * 118 M net acres * 100% working
Slide 44: APLNG: Cash Flow Generation
APLNG: SESE SED Cash Flow Generation * Project ~67% complete at the end of 1014 ° On schedule for first LNG in mid-2015 ¢ ~$25/BOE full-cycle F&D cost * 2017+ distributions ~S1 billion per year 120 5 8 SELF-FUNDING 100 « 2 APLNG soln EN Re so § Ris 60 - sv 1 40 + 0.5 20 2014 2015 2016 2017 2013 2017
Slide 45: Surmont 2: Progressing Toward Startup
Surmont 2: Progressing Toward Startup * Construction 68% complete at the end of 1014 ° First steam expected in mid-2015 * Surmont 2 increases gross capacity to 150 MBOED * Optimization and debottlenecking studies underway ¢ ~$20/BOE full-cycle F&D cost * Significant remaining development potential 4
Slide 46: Creating Value from Operations Excellence and Technology
Creating Value from Operations Excellence and Technology Oil Sands SAGD Projects Steam-Oil Ratio* * Operations Excellence a ¢ Surmont 1 operating >15% above design capacity ° Reduced drilling cost by 12% in 2013 * Longest SAGD wells in industry eo Fou SOR (2013 Average) N * Proven Technologies a 0 ¢
Slide 47: Robust Technology Pipeline Targeting Improved Project Returns
Robust Technology Pipeline Targeting Improved Project Returns Flow Control Devices (FCD) 1,600 FCD Cumulative Oil Production 1,400 ¢ Accelerates production and reduces SOR £300 * Successfully deployed and expanding application we . . Q 3800 SAGD Well With FCD * Pilot performance improvements = coo A
Slide 48: Europe Projects
Projects * 2014: Jasmine and Ekofisk South ramp up; Britannia LTC startup * 2015: Eldfisk Il and Enochdhu startups * 2016/17: Alder, Clair Ridge and Aasta Hansteen startups ° 5% production CAGR from 2013 to 2017 * Additional projects under evaluation .-! Aasta Hansteen< a 415 4 Elair Ridge 1 aed \ a
Slide 49: Malaysia: 2014 Milestone Year with Project Startups
* 2014: Milestone year with 3 project startups expected * Siakap North-Petai (SNP): First production achieved * Gumusut FPS: 3Q14 startup targeted * KBB gas development: 4Q startup targeted * Progressing exploration and development opportunities 0.8 5 t KBB Cluster PSC », A "yt. Ubah KME z re g' KBB
Slide 50: Alaska: Increased Investment Targeting Resource Development
Alaska: Increased Investment Targeting Resource Development ° Increased investments reflect better fiscal terms * Technology mitigating decline in mature fields ° CD5 project in execution * Drill site 2S, GMT1 and 1H NEWS projects progressing ° Prudhoe Bay pad expansions and projects 3. Capital Kupa
Slide 51: Exploration: Material High-Value Resource Adds
Exploration: Material High-Value Resource Adds Z 5 1 a Cumulative Discovered Resources ee - High-Value Organic Growth ; U.S. Unconventional Exploration— 2003-2012 » #4 “| 10% = am 54 LIQUIDS _ ll Independent Companies a4.. aw J Ea a 4.0 | [) Integrated Companies ConocoPhillips 3 SS 2 a3 a i 30 4 a _
Slide 52: Australia: Appraising Discoveries at Poseidon and Barossa
Australia: Appraising Discoveries at Poseidon and Barossa Greater Poseidon Complex Barossa * 40% working interest; operator * 37.5% working interest; operator * Discovered in 2009 * Discovered in 2006 ¢ Jurassic Plover and Montara formation reservoirs * Jurassic Plover and Elang formation reservoirs
Slide 53: Senegal: Deepwater Exploration
Senegal: Deepwater Explorati ‘ ae purisque * 35% working interest & | AFRICA ¢ FAN-1 well planned in 2Q 2014 * Cretaceous pinch-out play ThéiGambia * Similar age as the recent Mauritanian discovery Atlantic Ocean Sangomar nor approximately 360 miles north-east [Bh ConocoPhillips Acreage GUINEA-BISSA
Slide 54: International Conventional Exploration
International Co tional Exploration Norway: Barents Sea Indonesia: Palangkaraya PSC * 25-30% working interest * 100% working interest * Two wildcats to be drilled in Barents Sea license PL615 * Re-examining oil seeps and stratigraphic wells drilled in commencing in 2Q 2014 the 1930s * One Triassic a
Slide 55: International Unconventional Exploration
International Unconventional Exploration Poland * 70% working interest; operator ° 354 M net acres in the Baltic Basin * Drilling two vertical wells and one long lateral well in 2014 ¢ Hydraulic stimulation planned with 90-day flow test Baltic Sea Slawoszyno-1V Lublewo-1V Damnica Lebork POLAND i Con
Slide 56: Strength and Flexibility Throughout the E&P Value Creation Cycle
Strength and Flexibility Throughout the E&P Value Creation Cycle Balance Capital Resources & ‘ Profitability Shareholder > el Reserves => Eroclichion > Flow » Distributions * Growing portfolio of high-return, high-margin investments * Track record of reserve replacement at competitive F&D cost ° 3-5
Slide 57: Shifting Portfolio Driving Peer-Leading Cash Margin
Shifting Portfolio Driving Peer-Leading Cash Margi 2013 vs. 2012 Cash Margin/BOE * Visible margin growth in 2013 Relative Improvement ° 9% price normalized cash margin growth alla EE ua | * Liquids growth in Lower 48, Canada and APME Es) ° Shift to more favorable fiscal regimes | * Reduced North Ame
Slide 58: Appendix
SAFETY ConocoPhillips technology North Sea REPUTATION set fOKreorifoiic Optimization GROWTH innovation ENERGY BAKKEN SPIRIT Values COLLABORATION Ekofisk South Appendix
Slide 59: Annualized Net Income Sensitivities
Annualized Net Income Sensitivities * Crude ° Brent/ANS: $80-90MM change for $1/BBL change ° WTI: $35-40MM change for $1/BBL change * WCS'; S30-40MM change for $1/BBL change ¢ North American NGL * Representative blend: $10-15MM change for $1/BBL change ¢ Natural Gas * Henry Hub: $100-110MM change fo
Slide 60: 2014 Production Guidance: Continuing Operations
2014 Production Guidance: Continuing Operations Annual Planned Turnarounds j Major Turnarounds 2Q14 * J-Area 3Q14 * Prudhoe Bay * Surmont Britannia Area East Irish Sea Southern North Sea Bayu-Undan ° . ° ° 1Q14 2Q14 3Q14 4Q14 FY14 Continuing Operations . 7 1,530 1,490 - 1,540 1,435 — 1,485 1,590 - 1
Slide 61: 2014 Outlook Guidance
2014 Outlook Guidance * 2014 DD&A of ~$8.5B ° Higher DD&A from Jasmine and Gumusut startup ° Reflects reserve booking schedule in unconventionals ¢ Expenses from continuing operations * Production and SG&A expense of ~$8.5B ° Exploration expense of ~$1.5B° * Corporate segment costs of ~$950 MM ‘incl
Slide 62: Segment Production (MBOED)
Segment Production (MBOED) 250 200 150 100 50 250 200 150 100 ‘Excludes Libya 2013 2014 2015 2016 2017 2013 2014 (Base 2015 2016 2017 500 400 300 200 100 2013 2014 2014 2015 2015 2016 2016 GB Development Programs 2017 700 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 GEE Major Projects
Slide 63: Margin Class Categorization
Margin Class Categorization North American International North American North American Unconventionals Oil Sands Oil & Gas Conventional Oil Gas * Bakken * AKLNG * Christina Lake | * China * Alaska North Slope |* Lobo * Barnett * APLNG * Foster Creek * Indonesia * Anadarko * San Juan * Canada Unconve
Slide 64: Abbreviations Glossary
bbreviations Glossary * 4-D: four dimensional * MM: million * ANS: Alaska North Slope * MBOED: thousands of barrels of oil equivalent per day ° Average Cash Margin (2014-2017): Average cash margin represents the projected cash flow from operating activities, excluding working capital, divided by est
Slide 65: Investor Information
Investor Information Stock Ticker Investor Relations Contacts: NYSE: COP Telephone: +1 212.207.1996 Website: www.conocophillips.com/investor Ellen DeSanctis: [email protected] Sidney J. Bassett: [email protected] Headquarters Vladimir R. dela Cruz: v.r.delacruz@conoco