Conocophillips · NYSE:COP
Conocophillips — Investor Day (April 2014)
88 slides from Conocophillips's investor day presentation, Apr 10, 2014
Slide 1: ConocoPhillips 2014 Analyst Meeting
ConocoPhillips set for GROWTH innovation BAKKEN COLLABORATION 2014 ANALYST MEETING April 10, 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. Actual outcomes and results may di
Slide 3: Agenda
Agenda • Delivering Our Value Proposition • Ryan Lance, Chairman & CEO • Executing Volume and Margin Growth from an Unmatched Portfolio • Matt Fox, EVP, Exploration & Production • Al Hirshberg, EVP, Technology & Projects • Maintaining Significant Financial Strength and Flexibility • Jeff Sheets, EVP
Slide 4: Ryan Lance, Chairman & CEO
ConocoPhillips set for GROWTH innovation BAKKEN COLLABORATION 2014 ANALYST MEETING Ryan Lance, Chairman & CEO April 10, 2014
Slide 5: 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 will deliver sustainable double-digit returns annually to shareholders through cash flow growth and a compelling dividend. 5
Slide 6: 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. 6
Slide 7: Unmatched Position Today
Unmatched Position Today 1,472 MBOED Production1 North Liquids • Diversified asset base with scope and scale American 26% Gas • Multiple sources of growth LNG + 56% International 18% • Massive positions in key resource trends Gas • Growing portfolio with options and choices 8.9 BBOE Reserves – YE 20
Slide 8: Commodity Price Outlook
Commodity Price Outlook 140 Brent ($/bbl) • Factors supporting higher prices 120 111 112 100 98 109 • Geopolitical supply risks 80 62 • OECD economic recoveries 80 60 • Rise of global middle class 40 140 • Factors supporting lower prices WTI ($/bbl) 120 • Slower growth in non-OECD economies 100 98 1
Slide 9: 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% • Met production targets and advanced 21.3% growth projects ConocoPhillips • Achieved 11% cash margin growth1 13.0% Integrat
Slide 10: 2014: Set for Growth
2014: Set for Growth Average Capital • Significant shift in capital toward development ~$16B programs Exploration & Exploration & Appraisal Appraisal • 2013: 1,472 MBOED1 is base for growth Major Projects • 2014: Expect 3-5% production growth Major Projects • Range of 1,510-1,550 MBOED • Expect to e
Slide 11: Our Strategy Achieves Value Proposition
Our Strategy Achieves Value Proposition Average Capital Production1 ~$16B 2.0 100% 15% Exploration & Delivers 2017+ 1.8 90% Appraisal growth 1.6 80% Generates strong production 1.4 30% Major Projects 70% growth 1.2 MMBOED 60% 1.0 50% 0.8 40% 45% Development Mitigates base 30% Programs decline 0.6 20
Slide 12: Capital Allocation Drives Profitable Growth
Capital Allocation Drives Profitable Growth Average Capital Production1 ~$16B 2.0 100% 1.8 90% North American 1.6 >$40/BOE 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 $30-$40/BOE Margin 0.6 50%30%of Capital 20% North American
Slide 13: The Power of Portfolio: Margins, Decline Rates and Returns
The Power of Portfolio: Margins, Decline Rates and Returns $10-15/BOE Margins $30-40/BOE Margins >$40/BOE Margins North American • Short-cycle cash flow High >25% Unconventionals • Avoid over capitalizing • Increases capital intensity of portfolio Full-Cycle Project Returns North American Convention
Slide 14: What to Listen for Today
What to Listen for Today • Value proposition unchanged • 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 position is strong a
Slide 15: Matt Fox, Al Hirshberg
Matt Fox Al Hirshberg EVP, Exploration & Production EVP, Technology & Projects 15
Slide 16: Volume and Margin Growth from Unmatched Portfolio
Volume and Margin Growth from Unmatched Portfolio • Overview • Reserves and Capital Allocation • 2013-2017 Margin and Production Growth • North American Unconventional • LNG • Oil Sands • International Oil and Gas • North American Conventional Oil • North American Gas • Future Growth • Exploration a
Slide 17: Diversified and High-Margin Reserve Base
Diversified and High-Margin Reserve Base 8.9 BBOE Reserves – YE 2013 By Region By Product By Margin1 Other North American North American NGL Unconventional 4% Gas Asia Pacific & Alaska 8% Oil 16% 8% LNG Middle East 19% 16% 11% Natural 31% Gas International 29% Oil and Gas Europe 9% 18% 25% 23% Oil S
Slide 18: Capital Allocation Drives Profitable Growth
Capital Allocation Drives Profitable Growth Average Capital Production1 ~$16B 2.0 100% 1.8 90% North American 1.6 >$40/BOE 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 $30-$40/BOE Margin 0.6 50%30%of Capital 20% North American
Slide 19: 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 Niobrara • Exceptional growth in high-margin resource base Anadarko Permian • Decades of drilling inventory with upside Barn
Slide 20: Current Status of Unconventional Plays
Current Status of Unconventional Plays 20
Slide 21: Disciplined Pace of Development Maximizes Value
Disciplined Pace of Development Maximizes Value Reasons to Accelerate Reasons to Optimize Acreage Retention Cost Learning Curve Benefits Technology Learning Curve Benefits Driven by Growth Infrastructure Efficiency Faster Cash from Operations Higher Ultimate Recovery 21
Slide 22: Eagle Ford: Significant Resource Increase
Eagle Ford: Significant Resource Increase • 221 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 • $20-25/BOE full-cycle F&D cost Average Production Product M
Slide 23: Eagle Ford: Premium Value from Best Wells in the Play
Eagle Ford: Premium Value from Best Wells in the Play 250 Highest Oil Rates per Well1 60 Industry-Leading Value2 50 200 Gross Operated Production (BPD) 40 NPV10 per Acre ($M) 150 30 100 20 50 10 0 0 Competitors Competitors 1Texas Railroad Commission, 2013. 2Wood Mackenzie. 23
Slide 24: Eagle Ford: Acreage in Heart of the Sweet Spot
Eagle Ford: Acreage in Heart of the Sweet Spot Thermal Maturity Pressure & Thickness A B TEXAS GONZALES WILSON LAVACA ConocoPhillips A Acreage DE WITT ATASCOSA KARNES B Maturity FRIO Sweet Spot ConocoPhillips Acreage Dry Gas Dry Gas LA SALLE Volatile Oil, Cond., Wet Gas Volatile Oil, Cond., Wet Gas
Slide 25: 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-acre1 Single Layer Lower Eagle Ford 80-acre1 High/Low Lower Eagle Ford 40-acre2 1.8 BBOE EUR 2.5 BBOE EUR Upper Eagle Ford/Austin Chalk 1660’ between 1-mile long wells is
Slide 26: Scientific Piloting: Accelerating Pace of Learning
Scientific Piloting: Accelerating Pace of Learning Pressure Monitoring Instrumented Wells Logging and Coring Stimulated Rock Volume Producer Post-Stimulation Pilot Well Cored Section Pre-Stimulation Pilot Well Map View 26
Slide 27: Eagle Ford: Value-Driven Approach to Fracture Stimulation Design
Eagle Ford: Value-Driven Approach to Fracture Stimulation Design Optimizing Proppant Density • Extensive pilot testing to verify stimulation models 40% • Constantly enhancing fracture stimulation design EUR Increase 30% • 30% increase in EUR per well from increased proppant 20% • >100% production in
Slide 28: Eagle Ford: Delivering Capital Efficiencies
Eagle Ford: Delivering Capital Efficiencies • ~40% reduction in drilling days Drilling Cost Efficiency1 100% • ~40% reduction in completion cost per unit of proppant 80% 60% • 75% of 2014 wells benefit from multi-well pad drilling 40% • Leveraging size to realize contract savings 20% • Testing addit
Slide 29: Drilling Execution Efficiency Platform (DEEP)
Drilling Execution Efficiency Platform (DEEP) • Optimizes drilling performance in real time 1,250 Drilling Rate (feet/day) 20% 1,100 Faster • Currently being field piloted in Eagle Ford and Permian 950 • Demonstrated >20% increase in drilling 800 rate in the build and lateral section of Without DEEP
Slide 30: Operations Excellence: Unlocking Full Eagle Ford Potential
Operations Excellence: Unlocking Full Eagle Ford Potential Eagle Ford Integrated Operations Center • Leveraging success from conventional asset base 300 600 Center Opens # of Eagle Ford Flowing Wells 250 500 • Integrated operations centers in 9 locations worldwide Well Shut-In Events1 200 400 • Impr
Slide 31: 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 90
Slide 32: 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 33: Bakken: Optimal Well Spacing and Placement
Bakken: Optimal Well Spacing and Placement Current Testing Tighter Spacing Evaluating Further Upside 320-acre1 in Bakken/ 160-acre2 in Bakken/ Additional Wells in Upper Three Forks Upper Three Forks Middle Three Forks 11,320’ between 2-mile long wells is equivalent to 320-acre spacing. 2660’ between
Slide 34: Bakken: Delivering Capital Efficiencies
Bakken: Delivering Capital Efficiencies Drilling Cost Efficiency1 • ~30% reduction in drilling days 100% 29% Improvement • ~50% reduction in completion cost per unit of proppant 80% 60% • 90% of 2014 wells to benefit from multi-well pad drilling 40% • Leveraging size to realize contract savings 20%
Slide 35: Other N.A. Unconventionals: Strong Position in Emerging Plays
Other N.A. Unconventionals: Strong Position in Emerging Plays Montney Montney Duvernay • Focused on high-margin, liquids-rich opportunities • >500 M net acres under appraisal Bakken • Key programs in Permian, Niobrara and Canada Niobrara Anadarko • Leveraging Eagle Ford and Bakken learnings Permian
Slide 36: Permian Unconventional: Early Appraisal Results Encouraging
Permian Unconventional: Early Appraisal Results Encouraging New Mexico Texas • 150 M net acres in Delaware Basin; 90 M net acres in Midland Basin Central Delaware Basin Platform Midland Basin • Thick column of both shale and tight rock intervals Basin • Four rigs running in Delaware Basin • 24 horiz
Slide 37: Niobrara: Early Appraisal Results Encouraging
Niobrara: Early Appraisal Results Encouraging ADAMS ADAMS • 130 M net acres in the DJ Basin DENVER • Appraisal program ongoing; 2 rigs running ARAPAHOE • 18 horizontal wells planned for 2014 ARAPAHOE • Optimization of drilling and completions design DOUGLAS ELBERT • Average early rates from new desi
Slide 38: Canada: Appraising Montney and Duvernay
Canada: Appraising Montney and Duvernay Montney • 230 M net acres Montney • 90% average working Interest • Focused on 135 M net acres with 30-40% liquid yield Duvernay • 14 horizontal wells planned for 2014 • Access to existing infrastructure ConocoPhillips Acreage Duvernay • 118 M net acres • 100%
Slide 39: Dramatic Growth with Resource and Economic Upside
Dramatic Growth with Resource and Economic Upside • Unmatched portfolio and capabilities North American Unconventional Production 400 • Eagle Ford and Bakken sweet spots 300 MBOED • Encouraging results from emerging plays 200 • Realizing cost and technology learning curve benefits 100 • Optimizing d
Slide 40: Volume and Margin Growth from Unmatched Portfolio
Volume and Margin Growth from Unmatched Portfolio • Overview • Reserves and Capital Allocation • 2013-2017 Margin and Production Growth • North American Unconventional • LNG • Oil Sands • International Oil and Gas • North American Conventional Oil • North American Gas • Future Growth • Exploration a
Slide 41: 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: Restarting for seasonal exports Qatar Darwin LNG • AKLNG: Studying feasibility of North Slope gas APLNG • APLNG: Project on schedule Average P
Slide 42: APLNG: Long-Term Cash Flow Generation
APLNG: Long-Term Cash Flow Generation • Two 4.5 MTPA trains with long-term sales to Asia • Project ~65% complete • On schedule for first LNG in mid-2015 • ~$25/BOE full-cycle F&D cost • 2017+ distributions ~$1 billion per year Awaiting better graphic 3 APLNG Project Capital Production 120 2.5 100 20
Slide 43: 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 44: Surmont 2: Progressing Toward Startup
Surmont 2: Progressing Toward Startup • Construction 68% complete • 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 Total Surmont Capita
Slide 45: Creating Value from Operations Excellence and Technology
Creating Value from Operations Excellence and Technology Oil Sands SAGD Projects Steam-Oil Ratio1 • Operations Excellence 6 5 • Surmont 1 operating >15% above design capacity SOR (2013 Average) 4 • Reduced drilling cost by 12% in 2013 3 • Longest SAGD wells in industry 2 1 • Proven Technologies 0 •
Slide 46: 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 1,200 • Successfully deployed and expanding application 1,000 MBOE 800 SAGD Well With FCD • Pilot performance improvements 600 A
Slide 47: 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: 5 projects in Europe and Malaysia Malaysia Indonesia • 2015-2017: 7 projects expec
Slide 48: North Sea: Revitalization from High-Margin Projects
North Sea: Revitalization from High-Margin Projects • 2014: Jasmine and Ekofisk South ramp up; Britannia LTC startup • 2015: Eldfisk II and Enochdhu startups • 2016/17: Alder, Clair Ridge and Aasta Hansteen startups • 5% production CAGR from 2013 to 2017 • Additional projects under evaluation Aasta
Slide 49: Malaysia: Building a Legacy Position
Malaysia: Building a Legacy Position • 2014: Milestone year with 3 project startups expected • Siakap North-Petai (SNP): First production achieved • Gumusut FPS: Mid-2014 startup targeted • KBB gas development: 4Q startup targeted • Progressing exploration and development opportunities Malaysia – Ma
Slide 50: 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 51: 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 Capital Kuparuk
Slide 52: 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 $4/MCF gas Average Production Production Mix 1 Capital
Slide 53: Volume and Margin Growth from Unmatched Portfolio
Volume and Margin Growth from Unmatched Portfolio • Overview • Reserves and Capital Allocation • 2013-2017 Margin and Production Growth • North American Unconventional • LNG • Oil Sands • International Oil and Gas • North American Conventional Oil • North American Gas • Future Growth • Exploration a
Slide 54: Exploration: Material High-Value Resource Adds
Exploration: Material High-Value Resource Adds 1 Cumulative Discovered Resources 6.0 High-Value Organic Growth 8 2 U.S. Unconventional Exploration – 2003-2012 7 5.0 6 5 Independent Companies 4.0 Integrated Companies Full-Cycle NPV10 per BOE ($/BOE) 4 BBOE 3 3.0 2 1 2.0 Bubble Size Represents 0 Total
Slide 55: Diverse and Balanced Portfolio of High-Value Opportunities
Diverse and Balanced Portfolio of High-Value Opportunities Norway Greenland Barents Chukchi NPR-A Canol Montney UK & Norway Duvernay Poland Baltic Basin Azerbaijan China Bohai Niobrara China Delaware & Sichuan Midland Gulf of Mexico Bangladesh Senegal Myanmar1 Malaysia Colombia Middle Magdalena Indo
Slide 56: 2014 Exploration and Appraisal Capital – $2.1B
2014 Exploration and Appraisal Capital – $2.1B By Play Type By Geography By Activity Other Appraisal Exploration Other Unconventional Lower 48 Drilling Drilling Conventional 10% 21% West Africa 27% 35% 33% 20% 55% 7% North Sea 18% 5% Gulf of 12% 44% 8% 5% Mexico Lease Deepwater Australia and Canada
Slide 57: 2014: Testing Global Portfolio
2014: Testing Global Portfolio Norway Greenland Barents Chukchi NPR-A Canol Montney, UK & Norway Duvernay Poland Baltic Basin Azerbaijan China Bohai Niobrara China Delaware & Sichuan Midland Gulf of Mexico Bangladesh Senegal Myanmar1 Malaysia Colombia Middle Magdalena Indonesia Bonaparte Angola Brow
Slide 58: Appraising Gulf of Mexico Discoveries: Tiber and Gila
Appraising Gulf of Mexico Discoveries: Tiber and Gila TEXAS LOUISIANA Tiber • 18% working interest • Lower Tertiary oil discovery in 2009 • Low relief 4-way closure • Multiple reservoir intervals Gila Tiber • Appraisal commenced in 2013; continues in 2014 ConocoPhillips Acreage Gila Gila • 20% worki
Slide 59: Appraising Gulf of Mexico Discoveries: Shenandoah and Coronado
Appraising Gulf of Mexico Discoveries: Shenandoah and Coronado TEXAS LOUISIANA Shenandoah • 30% working interest • Lower Tertiary oil discovery in 2009 • Discovery well drilled crestal location • First appraisal well in 2013; >1,000 feet net pay Shenandoah Coronado • Next appraisal well planned for
Slide 60: 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 61: Angola: Deepwater Exploration
Angola: Deepwater Exploration Atlantic • Block 36: 50% working interest; operator Ocean Luanda • Block 37: 30% working interest; operator Block 36 Orca • Pre-salt lacustrine carbonate play in Kwanza Basin Lontra Kamoxi-1 Block 20 • Analogous to Brazilian Santos/Campos Basins and Mavinga Cameia-1 Cam
Slide 62: Senegal: Deepwater Exploration
Senegal: Deepwater Exploration Rufisque • 35% working interest AFRICA SENEGAL • FAN-1 well planned in 2Q 2014 • Cretaceous pinch-out play Sangomar The Gambia • Similar age as the recent Mauritanian discovery Atlantic Ocean Sangomar Deep approximately 360 miles north-east ConocoPhillips Acreage GUINE
Slide 63: International Conventional Exploration
International Conventional 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 Triassi
Slide 64: International Unconventional Exploration
International Unconventional Exploration Poland Colombia • 70% working interest; operator • Santa Isabel – 70% working interest (71 M net acres) • 354 M net acres in the Baltic Basin • VMM Blocks – 30% working interest (116 M net acres) • Drilling two vertical wells and one long lateral well in 2014
Slide 65: 2014: Testing Global Portfolio
2014: Testing Global Portfolio Norway Greenland Barents Chukchi NPR-A Canol Montney, UK & Norway Duvernay Poland Baltic Basin Azerbaijan China Bohai Niobrara China Delaware & Sichuan Midland Gulf of Mexico Bangladesh Senegal Myanmar1 Malaysia Colombia Middle Magdalena Indonesia Bonaparte Angola Brow
Slide 66: Volume and Margin Growth from Unmatched Portfolio
Volume and Margin Growth from Unmatched Portfolio • Diversified high-margin reserve base • Unmatched unconventional portfolio and capabilities • Robust pipeline of international major projects • Global inventory of promising exploration prospects • High confidence in achieving 3-5% production and ma
Slide 67: Jeff Sheets, EVP, Finance & CFO
Jeff Sheets EVP, Finance & CFO 67
Slide 68: 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 Production Sheet Investment Reserves & Cash Flow Distributions Asset Sales • Growing portfolio of high-return, high-margin investments • Track record of reserve replacement at compe
Slide 69: Targeted Capital Allocation Drives Profitable Growth
Targeted Capital Allocation Drives Profitable Growth Average Capital Production1 ~$16B 2.0 100% 1.8 90% North American 1.6 >$40/BOE 80% Margin Unconventional 45% of Capital 1.4 70% 1.2 60% LNG MMBOED Oil Sands 1.0 50% International 0.8 40% Oil & Gas $30-$40/BOE Margin 0.6 50%30%of Capital 20% North
Slide 70: Strong Reserve Replacement at Competitive F&D Cost
Strong Reserve Replacement at Competitive F&D Cost Year-end Reserves (BBOE) • 151% three-year organic reserve replacement ratio2 • Delivered F&D cost of <$20/BOE 8.9 8.4 8.6 • Reserves/production ratio of 15:1 at year-end 2013 • Expect continued reserve replacement >100% 2011 2012 2013 Finding & Dev
Slide 71: High-Margin Production Growth Drives Cash Margin Improvement
High-Margin Production Growth Drives Cash Margin Improvement 2017 Production1 Cash Margin Production CAGR1 $/BOE 2013-2017 North American 2013 Production1 North American Unconventional >40 ~22% Unconventional North American Unconventional LNG >40 ~10% LNG Oil Sands Oil Sands 30-40 ~21% North America
Slide 72: Shifting Portfolio Driving Peer-Leading Cash Margin Growth
Shifting Portfolio Driving Peer-Leading Cash Margin Growth 2013 vs. 2012 Cash Margin/BOE • Visible margin growth in 2013 Relative Improvement 1 11% • 9% price normalized cash margin growth • Liquids growth in Lower 48, Canada and APME • Shift to more favorable fiscal regimes • Reduced North American
Slide 73: High-Margin Growth Generates Long-Term Cash Flow Improvements
High-Margin Growth Generates Long-Term Cash Flow Improvements Cash From Continuing Operations¹ • Continued cash margin growth in 2014+ $B • Ongoing production mix shift • Increased production in areas with more favorable fiscal regimes • Declining production in North American natural gas fields $20-
Slide 74: Balance Sheet Strength and Flexibility
Balance Sheet Strength and Flexibility ConocoPhillips Debt Trades Better Than AA-Rated Debt • Target to maintain A1/A rating (10-Year Spreads Over U.S. Treasuries – Basis Points) • Capacity for incremental debt within current rating • $6.5 billion total cash3 at year-end 2013 • Minimum operating cas
Slide 75: Committed to Improving Financial Returns
Committed to Improving Financial Returns 2013 Return on Capital Employed • Front-end loaded major project capital • Capital shift to higher-margin, higher-return programs • DD&A rates decline as unconventional resources 11.8% are converted to reserves 10.5% 8.3% • Cost structure and efficiency remai
Slide 76: Committed to Shareholder Returns
Committed to Shareholder Returns Dividend Yield • Compelling dividend remains key to our value proposition • Highest priority use of cash 4% • Enhances capital discipline • Predictable portion of shareholder returns • Differential to independent peers • Dividends expected to increase over time Integ
Slide 77: ConocoPhillips 2014 Analyst Meeting – Ryan Lance
ConocoPhillips set for GROWTH innovation BAKKEN COLLABORATION 2014 ANALYST MEETING Ryan Lance, Chairman & CEO April 10, 2014
Slide 78: Key Messages From Today
Key Messages From Today • Value proposition unchanged • 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 position is strong an
Slide 79: Q&A
SAFETY ects ceatet ConocoPhillips echnolo North Sea oY REPUTATION set FOP Portoiic Optimization GROWTH. ENERGY ennen SPIRIT Values COLLABORATION Ekofisk South Q&A
Slide 80: Key Messages From Today
Key Messages From Today • Value proposition unchanged • 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 position is strong an
Slide 81: Appendix
SAFETY ects ceatet ConocoPhillips echnolo North Sea oY REPUTATION set FOP Portoiic Optimization GROWTH. ENERGY ennen SPIRIT Values COLLABORATION Ekofisk South Appendix
Slide 82: 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 83: 2014 Production Guidance: Continuing Operations
2014 Production Guidance: Continuing Operations NO LIBYA VOLUMES ASSUMED FOR 2014 1Q14 2Q14 3Q14 4Q14 FY2014 MBOED 1Q14 2Q14 3Q14 4Q14 FY14 Continuing Operations ~1,525 1,490 – 1,540 1,435 – 1,485 1,590 – 1,640 1,510 – 1,550 (Ex. Libya) 83
Slide 84: 2014 Outlook Guidance
2014 Outlook Guidance • 2014 DD&A of ~$8.5 B • 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 1 • Exploration expense of ~$1.5B • Corporate segment costs of ~$950 MM 1In
Slide 85: Segment Production (MBOED)
Segment Production (MBOED) 250 Alaska 500 Canada 700 Lower 48 & Latin America 600 200 400 500 150 300 400 300 100 200 200 50 100 100 0 0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 500 250 Europe APME 5 Other International1 400 200 4 300 150 3 200 100 2 50 100 1 0 0
Slide 86: Margin Class Categorization
Margin Class Categorization North American International North American North American Unconventionals LNG Oil Sands Oil & Gas Conventional Oil Gas • Bakken • AKLNG • Foster Creek • China • Alaska North Slope • Lobo • Barnett • APLNG • Christina Lake • Indonesia • Anadarko • Western Canada • Eagle F
Slide 87: 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 88: Investor Information
Investor Information Stock Ticker Investor Relations Contacts: NYSE: COP Telephone: +1 281.207.1996 Website: www.conocophillips.com/investor Ellen DeSanctis: [email protected] Sidney J. Bassett: [email protected] Headquarters Vladimir R. dela Cruz: v.r.delacruz@conoco