Conocophillips · NYSE:COP
Conocophillips — Q4 2016 Earnings Presentation
20 slides from Conocophillips's earnings presentation, Feb 2, 2017
Slide 1: 4Q16 Conference Call
4Q16 Conference Call Feb. 2, 2017
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: Ryan Lance, Chairman & CEO
Ryan Lance Chairman & CEO
Slide 4: Our Priorities are Activated and Delivering
Our Priorities are Activated and Delivering Value Proposition Principles Cash Allocation Priorities Proof Points Invest capital to maintain Achieved cash flow neutrality in Strong Growing 1st PRIORITY production and pay existing dividend 2H16; on track for 2017 capital Balance expenditures of $5B
Slide 5: Inflection Point: The Case for ConocoPhillips
Inflection Point: The Case for ConocoPhillips Transformation Acceleration Differentiation • Cash from operating • Progress on all priorities: • Managing the business for activities exceeded capital • Dividend increase free cash flow with clear expenditures and dividends allocation priorities • Debt
Slide 6: Don Wallette, Jr.
Don Wallette, Jr. EVP, Finance, Commercial and CFO
Slide 7: 4Q16 Performance – Adjusted Earnings
4Q16 Performance – Adjusted Earnings Highlights • Year-over-year adjusted earnings benefited from 15% (318) improvement in realizations and lower exploration expense Adjusted (826) Earnings (1,117) • Sequential adjusted earnings benefited from 11% ($MM) improvement in realizations and lower deprecia
Slide 8: 4Q16 Performance — Company Cash Flow
4Q16 Performance — Company Cash Flow ConocoPhillips SB 4Q16 Marker Prices * Brent $49.46/BBL * WTI$49.18/BBL * Henry Hub $2.98/MMBTU Year-end 2016 * Debt of $27.3B * Debt-to-capital ratio of 44% 0.9 1.8 —— |] 0.2 . 1.0 —— . Es 0.3 0.1 0.3 4Q16 CFO Excluding Total Working Disposition Debt Capital Div
Slide 9: Al Hirshberg
Al Hirshberg EVP, Production, Drilling and Projects
Slide 10: 2016 Preliminary Reserve Replacement
2016 Preliminary Reserve Replacement 81% (189%) (194%) replacement Organic RRR Total RRR from additions = com (1,611) (29) 8,180 OilSands 70% Lower4s 15% AsiaPacific 8% Alaska 5% r T T T YE 2015 2016 Additions Market YE 2016 Dispositions YE 2016 Reserves Production’ Factors Organic Reserves Reserves
Slide 11: Lower 48 and Canada
Lower 48 and Canada Lower 48 • 4Q16 production of 458 MBOED vs. 504 MBOED in 4Q151 • FY16 production of 486 MBOED vs. 511 MBOED in FY151 • Increased to 8 operated rigs by year-end 2016 • Eagle Ford increased from 2 to 4 rigs • Bakken increased from 1 to 4 rigs • Expect to average 11 operated rigs in
Slide 12: Alaska and Europe & North Africa
Alaska and Europe & North Africa Alaska Europe & North Africa • 4Q16 production of 187 MBOED vs. 186 MBOED • 4Q16 production of 221 MBOED vs. 218 MBOED in in 4Q151 4Q15 • FY16 production of 179 MBOED vs. 175 MBOED in • FY16 production of 203 MBOED vs. 207 MBOED in FY15 FY151 • Achieved first product
Slide 13: Asia Pacific & Middle East and Other International
Asia Pacific & Middle East and Other International Asia Pacific & Middle East • 4Q16 production of 400 MBOED vs. 347 MBOED in 4Q151 • FY16 production of 399 MBOED vs. 345 MBOED in FY151 • Achieved first production at APLNG Train 2 in Australia, Malikai in Malaysia and Bohai WHP-J in China • Continue
Slide 14: 2017 Operational Priorities
2017 Operational Priorities • Successfully delivering on operating $5B plan 1,540 - 1,570 2017 CAPITAL GUIDANCE • Expect 2017 full-year production to be 1,567 27 1,540 flat to 2% growth vs. 2016 production $6B of 1,540 MBOED1 2016 Production 2016 2016 Dispositions Adjusted For 2017 Guidance 2017 ADJ
Slide 15: Q&A
Q&A
Slide 16: Appendix
Appendix
Slide 17: Annualized Net Income Sensitivities
Annualized Net Income Sensitivities $45-$65/BBL Brent • 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
Slide 18: 2017 Annualized Cash Flow Sensitivities
2017 Annualized Cash Flow Sensitivities Consolidated Operations1 Equity Affiliates2 ($45-$65/BBL Brent) ($50-$65/BBL Brent) • Crude: • Expect distributions from all equity affiliates at >$50/BBL • Brent/ANS: ~$105-115MM for $1/BBL change • WTI: ~$50-60MM for $1/BBL change • $1/BBL movement in Brent:
Slide 19: 2017 Outlook Guidance
2017 Outlook Guidance • Full-year production of 1,540 – 1,570 MBOED • 1Q17 production of 1,540 to 1,580 MBOED • Adjusted operating costs of $6.0B • Capital expenditures of $5.0B • DD&A of $8.0B • Corporate segment net loss of $1.2B • Exploration dry hole and leasehold impairment expense of $0.2B Adj
Slide 20: 2016 Performance — Company Cash Flow
2016 Performance — Company Cash Flow 2.3 $B 1.3 49 oe 0.8 49 ConocoPhillips 2016 Marker Prices * Brent $43.69/BBL * WTI$43.20/BBL * Henry Hub $2.46/MMBTU Year-end 2016 * Debt of $27.3B * Debt-to-capital ratio of 44% 1.3 0.1 0.1 2016 Beginning CFO Excluding Total Working Disposition Debt Capital Divi