Conocophillips · NYSE:COP
Conocophillips — Investor Presentation (June 2016)
16 slides from Conocophillips's investor presentation, Jun 2, 2016
Slide 1: Investor Update
Investor Update Last Updated: June 2, 2016
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, operating results or the industries or markets in which
Slide 3: Response to Low Prices
Response to Low Prices Brent Price $/BBL $120 Macro Environment • Steep decline in oil prices significantly worsened in 1Q16 $100 2014 Avg. • Excess inventories and ongoing demand uncertainty • Rating agencies materially lowered long-term price outlook $80 • Significant credit downgrades; reduced de
Slide 4: Exercising Flexibility, Maintaining Flat Production
Exercising Flexibility, Maintaining Flat Production Capital Operating Costs1 Production2 $11.4B $2.7B FLAT PRODUCTION REDUCTION REDUCTION $12 1,600 2016 vs. 2015 $20 $10 $16 1,200 $8 $12 $6 800 $8 $17.1B $9.7B $4 $8.0B $7.0B $10.1B 400 $4 $2 $5.7B $0 $0 0 2014 2015 2016E 2014 2015 2016E 2014 2015 20
Slide 5: Maintaining Discipline Across Time Horizons
Maintaining Discipline Across Time Horizons Short Term Medium Term Longer Term Weaker Prices Price Recovery Cycles and Volatility • Protect against protracted downturn • Priority to strengthen balance sheet • Achieve target debt level • Set dividend for lower end of cycle • Target annual real growth
Slide 6: Creating Value Through the Cycles
Creating Value Through the Cycles Allocation Principles Portfolio Attributes Strong Balance Diverse, low-decline base production Growing Dividend Sheet Reduce debt to Target annual real growth less than $25B Large, low cost of supply resource base RETURNS + Flexible, short-cycle investment options L
Slide 7: High-Quality Global Portfolio
High-Quality Global Portfolio Production Reserves Resources 1,578 MBOED1 8.2 BBOE2 44 BBOE3 10% 22% 19% 22% 24% 31% 17% 16% 19% 32% 46% 12% 10% 6% 14% APME Canada Europe & North Africa Alaska Lower 48 7 1 1Q16 production. 2 YE 2015 reserves. 3 YE 2014 resources.
Slide 8: Diversified Portfolio Provides a Unique Advantage
Diversified Portfolio Provides a Unique Advantage Capital Canada Europe $10.1B 293 MBOED2 216 MBOED2 New projects Europe Surmont 2 on line, and drilling adding to low Alaska offset decline $5.7B decline base APME Canada Europe Alaska APME Lower 48 Canada Lower 48 2015 Actual 2016E APME 387 MBOED2 Al
Slide 9: Lower 48 and Canada
Lower 48 and Canada Foster Creek Lower 48 Canada • Transitioned from 13 operated rigs at year-end 2015 to 3 • Increasing bitumen production further shifts product mix operated rigs in April to liquids • Current plan yields ~10% production decline in • Progressing toward first production at Foster Cr
Slide 10: Alaska and Europe & North Africa
Alaska and Europe & North Africa Alaska • Production from major projects offsetting decline • Ramping up production at CD5 and Drill Site 2S • Project activity underway at GMT 1 Europe & North Africa • Continuing development drilling at Greater Ekofisk Area • Progressing projects at Alder, Clair Rid
Slide 11: Asia Pacific & Middle East and Other International
Asia Pacific & Middle East and Other International Asia Pacific & Middle East • Expect first cargo from Train 2 in 4Q16 • Ramping up at Gumusut following gas and water injection • Progressing Malikai toward startup in 2017 APLNG Other International APLNG • Ongoing appraisal activity in Senegal LOADE
Slide 12: Key Takeaways
Key Takeaways LOWERED • Positioned for success in a volatile price environment BREAKEVEN PRICE • Lowered breakeven price ~65% CAPITAL REDUCTION 2016E VS 2014 • Reduced the dividend, exercised capital flexibility and lowered ~30% operating costs OPERATING COST REDUCTION 2016E VS 2014 • Ability to mai
Slide 13: Appendix
Appendix
Slide 14: Annualized Net Income Sensitivities
Annualized Net Income Sensitivities • Crude • Brent/ANS: $100-120MM for $1/BBL change • WTI: $30-40MM for $1/BBL change • WCS¹: $35-45MM for $1/BBL change • North American NGL • Representative blend: $5-10MM for $1/BBL change • Natural Gas • Henry Hub: $65-75MM for $0.25/MCF change • International g
Slide 15: 2016 Outlook Guidance
2016 Outlook Guidance • 2016 DD&A of ~$8.5B • Reflects reduction in consolidated volumes • Operating Costs of ~$7.0B • Production and SG&A expense of ~$6.4B • Exploration G&A and G&G of ~$0.6B • Exploration Dry Hole and Impairment Expense of ~$0.8B • Corporate Segment Net Loss of ~$1B 15
Slide 16: Investor Information
Investor Information Stock Ticker Investor Relations Contacts: NYSE: COP Telephone: +1 281.293.5000 Website: www.conocophillips.com/investor Ellen DeSanctis: [email protected] Sidney J. Bassett: [email protected] Headquarters Vladimir R. dela Cruz: v.r.delacruz@conoco