Conocophillips · NYSE:COP
Conocophillips — Investor Presentation (November 2014)
29 slides from Conocophillips's investor presentation, Nov 19, 2014
Slide 1: Company Overview
C o m p a ny O ve r v i e w Updated Nov. 19, 2014.
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 or the industries or markets in whi
Slide 3: Our Value Proposition is Unchanged
Our Value Proposition is Unchanged • 3 – 5% production growth rate • 3 – 5% margin growth rate • Competitive 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, th
Slide 4: Unmatched Position Today
Unmatched Position Today 1,473 MBOED Production1 – 3Q14 North Liquids • Diversified asset base with scope and scale American 25% Gas • Multiple sources of growth LNG + 57% International 18% • Massive positions in key resource trends Gas • Growing portfolio with options and choices 8.9 BBOE Reserves
Slide 5: Flexible and Resilient to Lower Prices
Flexible and Resilient to Lower Prices Foster Creek • Performance on track for 3 to 5 percent volume and margin growth • Production momentum from recent investments • Continued focus on margins and returns Exploration & Exploration & Appraisal Appraisal • Well positioned for current environment Majo
Slide 6: Capital Allocation Drives Profitable Growth
Capital Allocation Drives Profitable Growth Production1 Average Capital 2.0 100% 1.8 90% North American 1.6 Highest 80% Margin Unconventional 45% of Capital 1.4 70% 1.2 LNG MMBOED 60% Oil Sands 1.0 50% International 0.8 40% Oil & Gas High Margin 0.6 50% 30% of Capital 20% North American 0.4 Conventi
Slide 7: Committed to Shareholder Returns
Committed to Shareholder Returns Dividend Yield • Attractive dividend is appropriate and remains key to our value proposition • Highest priority use of cash 3.9% • Enhances capital discipline • Predictable portion of shareholder returns • Differential to independent peers • Dividend increased 5.8 pe
Slide 8: The Power of Portfolio: Margins, Decline Rates and Returns
The Power of Portfolio: Margins, Decline Rates and Returns Low Margins High Margins Highest Margins North American • Short-cycle cash flow Unconventionals High • Avoid over capitalizing • Increases capital intensity of portfolio Full-Cycle Project Returns North American Conventional Oil • Medium-cyc
Slide 9: North American Unconventionals: Unmatched Portfolio and Capabilities
North American Unconventionals: Unmatched Portfolio and Capabilities Montney Duvernay • Great positions in proven and emerging plays • Eagle Ford and Bakken sweet spots Bakken • Exceptional growth in high-margin resource base Niobrara Anadarko Permian • Decades of drilling inventory with upside Barn
Slide 10: Eagle Ford: Significant Resource Increase
Eagle Ford: Significant Resource Increase • ~220 M 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 • $20-25/BOE full-cycle F&D cost Average Production Product
Slide 11: Eagle Ford: Premium Value from Best Wells in the Play
Eagle Ford: Premium Value from Best Wells in the Play 250 Highest Oil Rates per Well1 60 Industry-Leading Value2 50 200 Gross Operated Production (BPD) 40 NPV10 per Acre ($M) 150 30 100 20 50 10 0 0 Competitors Competitors 1Texas Railroad Commission, 2013. 2Wood Mackenzie. 11
Slide 12: Bakken: High-Margin Growth
Bakken: High-Margin Growth • ~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 1 Average Production Product Mix 100% Capital 9
Slide 13: Bakken: Advantaged Position in the Heart of the Trend
Bakken: Advantaged Position in the Heart of the Trend Montana North Dakota Bakken Acreage Values by Area (NPV10 per Acre)1 VALLEY ROOSEVELT WILLIAMS MOUNTRAIL Nesson Anticline Anticline Parshall-Sanish Fort Berthold Williams Core MCCONE Nesson West Nesson Anticline Northern Mountrail MCKENZIE Elm Co
Slide 14: Permian Unconventional: Early Appraisal Results Encouraging
Permian Unconventional: Early Appraisal Results Encouraging New Mexico Texas • Positions in Delaware and Midland basins Central Delaware Platform Midland Basin • Thick column of both shale and tight rock intervals Basin Basin • Four rigs running in Delaware Basin • ~30 horizontal wells planned for 2
Slide 15: LNG: Positioned in High-Margin Markets
LNG: Positioned in High-Margin Markets AKLNG • Oil-linked contracts; robust cash flows Kenai • Darwin and Qatar: High-liquids yield; premium markets • Kenai: Completed six cargoes in 2014 Qatar Darwin LNG • AKLNG: Pre-file request approved by FERC APLNG • APLNG: Project on schedule Average Productio
Slide 16: Oil Sands: Significant Growth from World Class SAGD Portfolio
Oil Sands: Significant Growth from World Class SAGD Portfolio Saleski Fort McMurray • Second largest net SAGD producer Surmont Thornbury Narrows • Top quartile steam-to-oil ratio Lake Crow Lake Christina Lake • Executing 7 major projects and 2 optimization projects McMillian Lake • 2017+ net cash fl
Slide 17: International Oil & Gas: Major Projects Driving Growth
International Oil & Gas: Major Projects Driving Growth Norway U.K. • Strong legacy positions • 130 MBOED major projects growth expected by 2017 Libya • 2013: Ekofisk South and Jasmine started on schedule China • 2014: Major project startups in Europe and Malaysia Malaysia Indonesia • 2015-2017: 7 pr
Slide 18: North American Conventional Oil: Protecting and Growing the Base
North American Conventional Oil: Protecting and Growing the Base • Development drilling and major projects in Alaska ALASKA • Infill drilling and waterflood expansion in the Permian • Drilling and expanded waterflood recovery at Ursa • Liquids-focused drilling in the Anadarko Basin • Technology and
Slide 19: 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/MCF lifting cost • 6.5 BBOE total resource • >15,000 identified well locations • ~$1.5 billion annual cash from operations at $4/MCF gas Average Production Product Mix 1 Capital Oi
Slide 20: 2014: Testing Global Portfolio
2014: Testing Global Portfolio Norway Greenland Barents Chukchi NPR-A Canol Montney, UK & Norway Duvernay Poland Baltic Basin Nova Scotia Azerbaijan China Bohai Niobrara China Delaware & Sichuan Midland Gulf of Mexico Bangladesh Senegal Myanmar1 Malaysia Colombia Middle Magdalena Indonesia Bonaparte
Slide 21: Appraising Gulf of Mexico Discoveries
Appraising Gulf of Mexico Discoveries TEXAS LOUISIANA Tiber • 18% working interest • Lower Tertiary oil discovery in 2009 • Multiple reservoir intervals • Appraisal commenced in 2013; continues in 2014 Gila Tiber Shenandoah ConocoPhillips Acreage Shenandoah • 30% working interest Gila • Lower Tertia
Slide 22: Senegal: Deepwater Exploration
Senegal: Deepwater Exploration Rufisque • 35% working interest AFRICA SENEGAL • FAN-1 discovered oil • Additional appraisal required to determine Sangomar commerciality The Gambia Atlantic Ocean Sangomar Deep • Cretaceous pinch-out play ConocoPhillips Acreage GUINEA-BISSAU GUINEA • SNE-1 discovered
Slide 23: Key Messages
Key Messages • Value proposition unchanged • Performance on track to deliver 3 to 5 percent volume and margin growth • Well positioned for current environment; significant capital flexibility • Strong momentum going into 2015 • Dividend is appropriate • Cash flow neutrality is a priority • Significa
Slide 24: Appendix
SAFETY ects ceatet ConocoPhillips echnolo North Sea oY REPUTATION set FOP Portoiic Optimization GROWTH. ENERGY ennen SPIRIT Values COLLABORATION Ekofisk South Appendix
Slide 25: 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 • WCS¹: $30-40MM 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 26: Meeting Our Growth Targets
Meeting Our Growth Targets ~4% PRODUCTION Full-Year Guidance on GROWTH1 Track Actual Actual 3Q14 vs. 4Q14 Drivers Actual • Major turnarounds completed in 3Q14 • Major project ramp • Value-driven ethane rejection 1Q14 2Q14 3Q14 4Q14 FY14 Continuing Operations 1,530 1,556 1,473 1,545 – 1,575 1,525 – 1
Slide 27: Margin Class Categorization
Margin Class Categorization North American International North American North American Unconventionals LNG 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 Unconv
Slide 28: Abbreviations and Glossary
Abbreviations and 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 •
Slide 29: 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
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