Conocophillips · NYSE:COP
Conocophillips — Investor Presentation (December 2015)
32 slides from Conocophillips's investor presentation, Dec 10, 2015
Slide 1: Analyst & Investor Update
ConocoPhillips Analyst & Investor Update Dec. 10, 2015
Slide 2: 2016 Operating Plan Update
2016 Operating Plan Update Introduction Ryan Lance, Chairman & CEO 2016 Operating Plan Matt Fox, EVP, Exploration & Production S Financial Update Jeff Sheets, EVP, Finance & CFO CEO Closing Remarks Ryan Lance ee
Slide 3: Cautionary Statement
ConocoPhi lips 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 m
Slide 4: Chairman & CEO
Chairman & CEO ConocoPhillips
Slide 5: 2016 Operating Plan: What to Listen for Today
2016 Operating Plan: What to Listen for Today DIVIDEND • Dividend is highest priority use of cash REMAINS TOP PRIORITY • $7.7B capital program delivers 1-3% volume growth $7.7B $2.5B CAPITAL REDUCTION • $7.7B of operating costs represents $2B reduction from 2014 2016E VS. 2015E • Maintaining strong
Slide 6: Delivering Value Proposition
Delivering Value Proposition Compelling Disciplined Dividend Growth V7 Financial Strength ConocoPhillips |
Slide 7: 2015: ConocoPhillips Acted Decisively Through Downturn
2015: ConocoPhillips Acted Decisively Through Downturn ~S7B CAPITAL REDUCTION 2015E vs. 2014 Brent Price $/BBL ; ; oo * Exercised capital flexibility $120 5 $100 | * Captured deflation across supply chain seo | 2Q Call Deepwater Update * Accelerated operating cost savings 2015 Capital $60 | e Releas
Slide 8: $3B of Non-Core Asset Sales Closed or Under Agreement
3B of Non-Core Asset Sales Closed or * ~45% of dispositions have no production impact 1,585 — 1,595 MBOED * Disposition characteristics of producing assets “70 * ~95% of production sold in North America MBOED 1,515 - 1,525 MBOED * >80% natural gas + ~170 MMBOE of reserves * ~$125MM of CFO in 2016 at
Slide 9: Lower Capital Spending, Lower Cost Structure and Modest Growth
Lower Capital Spending, Low Capital 55% $20 y REDUCTION $16 $12 $8 se [| 2014 2015E 2016E: $7.7B Capital Production excludes Lib Operating costs exclude: 2016E \ciliation is available on our website. J Lif er Cost Structure and Modest Growth Production Operating Costs ~20 ~ te) & 3% ¥v 20% 1,600 CAG
Slide 10: Matt Fox, EVP, Exploration & Production
Matt Fox EVP, Exploration & Production ConocoPhillips | 10
Slide 11: Capital: Major Project Roll-off and Exercising Flexibility
Capital: Major Project Roll-off and Exercising Flexibility 55% CAPITAL REDUCTION |__| 2014 to 2016E April 2015 Analyst Day $11.5B — — $11.5B | md ~ $17.1B | $0.8B Deepwater Exploration & $10.2B Appraisal $7.7B r r r . : 2014 Actual Major Projects Scope & Deflation & Market 2015 Guidance — Major Proj
Slide 12: Deflation: Continue to Capture Supply Chain Savings
Deflation: Continue to Capture Supply Chain Savings January 1s of November 2015. 30% \ 38% March @ 2015 Estimate Stimulation Land Rigs Cementing Other 7% Other 13% Operating M tet ce Europe Cost 13% 14% 32% Canada 17% Capital Well Ops Expenditure 59% 68% —+— — By Cost Segment By Region By Expenditur
Slide 13: Operating Costs: Sustainable Savings Captured
Operating Costs: Sustainable Savings Captured 25% REDUCTION IN OPERATING COSTS/BOE 2014 TO 2016E Pe ] $9.28 ———— April 2015 Analyst Day ~~ $8.7B I = fe [eee $0.4B Deepwater Exploration & $8.2B Appraisal 2014 Actual Underlying Structural & Deflation & 2015 Guidance Underlying Structural & Deflation &
Slide 14: Operating Costs: Delivering Sustainable Savings
Operating Costs: Delivering Sustainable Savings = . ae c+ Organizational * Lateral and vertical consolidation * 15% reduction of global employee and contractor workforce « 25% reduction in leadership positions * Organization right sized for future capital program “ea Portfolio * Phased exit of deepw
Slide 15: Diversified Portfolio Provides a Unique Advantage
Diversified Portfolio Provides a Unique Advantage Canada Surmont 2 on line, adding Alaska to low decline base Europe New projects and . drilling offset decline New projects and drilling offset decline e e e e 2015E 2016E e e . e Production - MBOED e 1,515-1,525 1,530-1,560 Lower 48 4 e Exercising fl
Slide 16: Lower 48: Exercising Flexibility, Preserving Optionality
Lower 48: Exercising Flexibility, Preserving Optionality Average Unconventional Wellhead Breakeven* i independent Companies integrated Companies “ I ConocoPhillips | | | | | | | | ¢ ~$2B development spend, focused on unconventionals Continue to run 13 rigs across Eagle Ford, Bakken and Permian Limit
Slide 17: Canada: Ramping up Production from Surmont
Canada: Ramping up Production from Surmont 2 Surmont 2 continues to ramp up Foster Creek G and Christina Lake F startups expected in 2016 Technology development lowering oil sands cost of supply Slower pace of unconventional appraisal and development Two offshore Nova Scotia wildcat wells Capital Pr
Slide 18: Alaska: Maintaining Strong Production Base
$B Capital 2015E 2016E MBOED 200 5 100 Maintaining Strong Production Base ¢ CD5 & Drill Site 2S on line ahead of schedule and under budget ¢ Development drilling at Prudhoe, Kuparuk and WNS Production 2015E 2016E GMT 1 project sanctioned and progressing Exploration spend around existing infrastructu
Slide 19: Europe: Legacy Development and Major Projects
Europe: Legacy Development and Major Projects ¢ Continuing focus on lowering cost and improving efficiency Triennial turnarounds planned at Ekofisk and J-Area in 2016 Development drilling in Greater Ekofisk Area Alder project first production scheduled in 2H16 Clair Ridge and Aasta Hansteen first oi
Slide 20: APME: Ramping up Production from APLNG
APME: Ramping up Production from APLNG ¢ APLNG Train 1 achieved first LNG production ~S0.6B APLNG capital in 2016, Train 2 first cargo expected 2H16 Development drilling around legacy assets Malaysia major project spend on Malikai, due on line in 2017 Bohai Phase 3 project in China, expected on line
Slide 21: 2016: Transition Year for Deepwater
2016: Transition Year for Deepwater Nova Scotia - ; , * 2 exploration wells J * Cheshire well drilling * Monterrey Jack expected to spud 2016 i. . 2016E Gulf of Mexico F E&A Capital * High-grading prospects J ~$0.8B * Melmar and Gibson wells drilling ! 2016E * Horus and Socorro wells in 2016 Operati
Slide 22: Diverse, Low Cost of Supply Resource Base Drives Growth Beyond 2016
Diverse, Low Cost of Supply Resource Base Drives Growth Beyond 2016 Reserves 8.9 BBOE Does not reflect 2015 deflation Challenged <$75/BOE 20 BBOE Cost of Supply ' , 24 BBOE Source of profitable, sustained growth Continuing to reduce cost of supply ~30 years of production from <$60/BOE Brent resource
Slide 23: Diverse, Flexible and Low Cost of Supply Growth Sources
Diverse, Flexible and Low Co upply Growth Sources 100% Reserves uN 8.9 BBOE Europe Flexible Development APME Challenged <$75/BOE 20 BBOE Cost of Supply 24 BBOE Conventional <$60 Cost of Supply 7.3 BBOE Base Base $60-$75 Cost of Supply 0% , T , a: T 8.0 BBOE Growth Engine Regional Spend Flexibility C
Slide 24: EVP, Finance & CFO
EVP, Finance & CFO ConocoPhillips |
Slide 25: Financial Priorities
Financial Priorities • Cash dividend remains top priority • Focused on improving financial returns • Completion of major projects and structural cost reductions • Maintain balance sheet strength to manage market volatility • Non-core asset sales provide additional financial flexibility • Rapidly clo
Slide 26: Financial Returns Improvement
Financial Returns Improvement Operating Costs ($B)' * Remain focused on improving financial returns 10 8 —_ + + 6 * Expect underlying returns improvement 4 * Sustainable cost reductions 2 0+ T 1 2014 2016+ * Increasing productive capital through major project . > startups at APLNG, FCCL and Surmont
Slide 27: Balance Sheet Strength
Balance Sheet Strength S&P Business Risk Profile Excellent Strong Satisfactory • IOC-like size, scale and diversification • Rated A by S&P and Fitch, Large Cap Small & Medium A2 by Moody’s + E&Ps Cap E&Ps IOCs • Strong access to capital markets and strong liquidity Moody’s View ConocoPhillips' A2 ra
Slide 28: Current Plan Closes the Gap on Cash Flow Neutrality
a Capital Flexibility Operating Cost Growth Current Plan Closes the Gap on Cash Flow Neutrality "ee 4 * Additional flexibility from completion of APLNG * Exercising flexibility to lower capital to $7.7B andl @aenuaion exploration prac * Benefiting from structural cost reductions to lower * Focus on
Slide 29: Consistent Priorities Across a Range of Prices
Consistent Priorities Across a Range of Prices Consistent Priorities t * Disciplined increase in flexible programs * Expect higher production growth * Dividend is first use of cash Higher Prices « Maintain structural cost reductions * Strengthen balance sheet * Focused on organic growth; level of gr
Slide 30: Ryan Lance, Chairman & CEO
Ryan Lance Chairman & CEO
Slide 31: What Wins in a Low and Volatile Price Environment
What Wins in a Low and Volatile Price Environment ConocoPhillips Portfolio and Strategy Characteristics Role in Driving Shareholder Value Diverse, low-decline base production Stable source of funding to sustain dividend Large, low cost of supply resource base Robust organic growth inventory with unc
Slide 32: 2016 Operating Plan: What You Heard Today
2016 Operating Plan: What You Heard Today DIVIDEND • Dividend is highest priority use of cash REMAINS TOP PRIORITY • $7.7B capital program delivers 1-3% volume growth $7.7B $2.5B CAPITAL REDUCTION • $7.7B of operating costs represents $2B reduction from 2014 2016E VS. 2015E • Maintaining strong bala
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