ConocoPhillips · NYSE:COP

ConocoPhillips — Citi's Global Energy Conference 2013

46 slides from ConocoPhillips's conference presentation, May 15, 2013

  1. Slide 1: A New Class of E&P Investment

    a new class of E&P INVESTMENT Citi’s Global Energy Conference ‐ Boston Matt Fox, EVP Exploration and Production May 15, 2013

  2. 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

  3. Slide 3: ConocoPhillips: A New Class of E&P Investment

    ConocoPhillips: A New Class of E&P Investment We offer the marketplace a new class of E&P investment. Our goal is to consistently deliver strong, predictable returns to shareholders. 3

  4. Slide 4: Unmatched as an Independent E&P Today

    ConocoPhillips: Unmatched as an Independent E&P Today Production: 1,485‐1,520 MBOED1 (2013e)  Largest independent E&P Liquids company LNG + International Gas North American Gas  Diverse asset base with scope and scale  Multiple sources of growth Proved Reserves: 8.6 BBOE (YE 2012)  Positioned in

  5. Slide 5: Our Strategy is Aligned with Our View of the Environment

    Our Strategy is Aligned with Our View of the Environment  Diversification, scale and capability are a competitive advantage  Disciplined investment strategy  Focus on organic growth  Invest in high‐margin programs and projects  Apply technical capability  Maintain financial flexibility  Rebal

  6. Slide 6: What Will We Deliver?

    What Will We Deliver?  Relentless focus on safety and execution  Compelling dividend  3 – 5% production growth rate  3 – 5% margin growth rate  Ongoing priority to improve financial returns Production and margin reflect compound annual growth rates. 6

  7. Slide 7: A Compelling Dividend is Key to Our Value Proposition

    A Compelling Dividend is Key to Our Value Proposition Dividend Yield1  Highest priority use of cash flow  Enhances capital discipline  Predictable portion of shareholder returns  Differential compared to range of peers  Target consistent increases 1 Dividend yield as of April 30, 2013. Peers in

  8. Slide 8: Commitment to Capital Discipline and Growth

    Commitment to Capital Discipline and Growth * Reflects production from 2012‐2013 closed and announced dispositions. 8

  9. Slide 9: Our Commitment to Margin Improvement

    Our Commitment to Margin Improvement  Five significant areas ramping up between 2012‐2017  Incremental growth comes from high‐margin investments  Lower‐risk geographies and geologies; diversified plays Oil Sands Europe Lower 48 Liquids Rich Malaysia APLNG Development Programs Major Projects 1 Bas

  10. Slide 10: Margin Improvement from Strong Growth and Mix Shift

    Margin Improvement from Strong Growth and Mix Shift  Investment strategy drives strong organic growth  Visible growth by end of 2013  High‐margin growth creates ~$6 B of incremental cash flow  $40‐$45 per BOE average cash margin1  Liquids growth from areas with lower tax rates 1 Based on 2013 r

  11. Slide 11: Focused on Continuously Improving Returns

    Focused on Continuously Improving Returns  Ongoing focus on cost structure and efficiency  Asset divestitures improve portfolio returns  Short‐term returns impacted by capital investments in major projects  High‐margin growth improves long‐term returns performance Companies include: APA, APC, BG

  12. Slide 12: High-Quality Legacy Base Production and Capability

    High‐Quality Legacy Base Production and Capability  Focused on systematic Operations Excellence programs to mitigate risk, improve production efficiency and preserve value:  Asset and operating integrity  Planning and scheduling  Maintenance and reliability  Surveillance and optimization Alaska

  13. Slide 13: High-Margin Worldwide Development Program Inventory

    High‐Margin Worldwide Development Program Inventory  Development programs will account for ~600 MBOED by 2017  >60% of production growth from high‐impact Lower 48 programs Development Program Growth (2012‐2017) MBOED Alaska Europe ~35 MBOED Canada ~40 MBOED ~105 MBOED Asia Pacific Lower 48 ~25 MBO

  14. Slide 14: Permian Conventional: Decades of Legacy Field Inventory

    Permian Conventional: Decades of Legacy Field Inventory Permian Basin  5‐year investment: ~$3 B New Mexico Texas BORDEN  Incremental F&D: ~$15/BOE DAWSON GAINES EDDY LEA ANDREWS MARTIN  ~1 MM net acres; 0.8 BBOE resource HOWARD Central Platform Basin  Infill drilling and waterflood expansion LOV

  15. Slide 15: Bakken: Growth from Development in Heart of Trend

    Bakken: Growth from Development in Heart of Trend Bakken  5‐year investment: ~$4 B Montana North Dakota  Incremental F&D: ~$20/BOE WILLIAMS MOUNTRAIL Nesson WARD  626 M net acres1; 0.6 BBOE resource ROOSEVELT Anticline RICHLAND  >1,400 identified drilling locations MCKENZIE  Top‐quartile initia

  16. Slide 16: Eagle Ford: Nearing Full Field Development Phase

    Eagle Ford: Nearing Full Field Development Phase Eagle Ford  5‐year investment: ~$8 B GUADALUPE BEXAR GONZALES  Incremental F&D: ~$20/BOE  227 M net acres; 1.8 BBOE resource WILSON DE WITT  Highest‐quality position in sweet spot, acquired ATASCOSA at $300/acre KARNES GOLIAD  >2,000 identified d

  17. Slide 17: Unconventional Reservoirs: Technology Leadership

    Unconventional Reservoirs: Technology Leadership Proven ability to identify, secure and develop highest‐value unconventional acreage  Sweet spot identification  Development plan optimization  Efficient drilling and completions  Operations excellence 1 Source: Wood Mackenzie. 17

  18. Slide 18: Unconventional Reservoirs: Sweet Spot Identification

    Unconventional Reservoirs: Sweet Spot Identification Early mover in best parts of plays yields best‐in‐class results  Multi‐disciplinary approach  Eagle Ford, Bakken and Permian successful outcomes  Securing additional liquids‐rich sweet spots 1 Source: IHS Enerdeq. 18

  19. Slide 19: High-Margin Major Growth Projects in Execution

    High‐Margin Major Growth Projects in Execution  Major projects will account for ~400 MBOED by 2017  Lower‐risk geographies and geologies; diversified market exposure Major Projects Growth (2012‐2017) MBOED Oil Sands Norway ~100 MBOED1 ~60 MBOED United Other Major Kingdom Projects ~55 MBOED ~55 MBO

  20. Slide 20: Oil Sands: Significant Growth from Projects in Execution

    Oil Sands: Significant Growth from Projects in Execution Christina Lake  5‐year investment: ~$5 B1  Full‐cycle F&D: ~$15/BOE  Surmont Phase 2 first steam in 2015  FCCL: Executing projects at Foster Creek, Christina Lake and Narrows Lake  Employing new technologies to improve efficiency and cost

  21. Slide 21: United Kingdom: Strong Production Growth from Projects

    United Kingdom: Strong Production Growth from Projects Jasmine  5‐year investment: ~$2.5 B  Full‐cycle F&D: ~$20/BOE  Jasmine: Largest recent discovery in U.K. sector; on track for late‐2013 startup  High‐value exploration opportunities can be tested from Jasmine platform  Additional projects i

  22. Slide 22: Norway: Major Projects Drive Another 40 Years of Production

    Norway: Major Projects Drive Another 40 Years of Production Ekofisk South  5‐year investment: ~$4 B  Full‐cycle F&D: ~$25/BOE  Ekofisk South and Eldfisk II will continue to improve oil recovery from the Greater Ekofisk Area  Additional projects include: Tor Redevelopment, Tommeliten Alpha and Aa

  23. Slide 23: Malaysia: Projects Ramping Up, with Upside

    Malaysia: Projects Ramping Up, with Upside Malaysia  5‐year investment: ~$2.5 B South China Sea  Full‐cycle F&D: ~$15/BOE KBBC PSC Ubah KME  4 developments in execution: Gumusut, SNP, G KBB G KBB and Malikai SB‐311 Pisagan SNP G Malikai  Gumusut full field and SNP first oil in late 2013 J Limbay

  24. Slide 24: APLNG: Project Progressing On Schedule

    APLNG: Project Progressing On Schedule APLNG  5‐year investment: ~$2.5 B1  Full‐cycle F&D: ~$25/BOE  Initial focus on two 4.5 MTPA LNG trains  Project on schedule for first cargo mid‐2015  Permitted for two additional trains  Phase 1 capital ~7% increase on AUD basis 2017 Cash Margin – $/BOE2

  25. Slide 25: Diverse Unconventional and Conventional Exploration Portfolio

    Diverse Unconventional and Conventional Exploration Portfolio West Duvernay, Greenland Barents Sea Muskwa, & North Sea Montney & Canol Poland Wolfcamp, Sichuan Niobrara & Gulf of Avalon Mexico Azerbaijan Bangladesh Colombia Indonesia Malaysia Angola Browse & Bonaparte Canning 25

  26. Slide 26: Permian Unconventional: Emerging Growth

    Permian Unconventional: Emerging Growth  Active exploration across Permian Basin that leverages existing ~1 MM net acre position  High‐grading positions around and within core legacy producing area  Measured approach as infrastructure is developed  Encouraging results consistent with expectation

  27. Slide 27: Progressing Worldwide Exploration Opportunities

    Progressing Worldwide Exploration Opportunities  Emerging unconventional plays  Canada: Canol Shale  2 vertical wells logged and cored Conventional and Unconventional Exploration Activity  Lower 48: Niobrara  Drilled 3 wells in 1Q13 NPR‐A Canol  Colombia: La Luna Shale  Drilling first well in

  28. Slide 28: International Conventionals: Deepwater Angola

    International Conventionals: Deepwater Angola Angola  Play identified as a probable analog to Brazil pre‐ salt play ANGOLA  Recent discoveries de‐risk play concept in Kwanza Basin Luanda  ConocoPhillips‐operated 2.5 MM acre position Atlantic 36  2012‐2013: 3‐D seismic acquisition confirms Ocean

  29. Slide 29: Exploration Catalysts in Deepwater GOM

    Exploration Catalysts in Deepwater GOM 2013 Gulf of Mexico Exploration  Two significant discoveries Texas Louisiana announced Tiber Shenandoah Ardennes  Shenandoah appraisal well discovery WI: 18% Target: L Tertiary WI: 30% Target: L Tertiary WI: 30% Target: L Tertiary >1,000 feet net pay Non Oper

  30. Slide 30: 2013 – 2014: Positioned for Success

    2013 – 2014: Positioned for Success Strategic Operational Financial  Delivering on value  Significant inflection  Maintain strong proposition point balance sheet  Complete  Visible results from  Demonstrate announced asset exploration margin sales programs improvement  Dividend remains  Comm

  31. Slide 31: Our Value Proposition

    Our Value Proposition  Relentless focus on safety and execution  Compelling dividend  3 – 5% production growth rate  3 – 5% margin growth rate  Ongoing priority to improve financial returns Production and margin reflect compound annual growth rates. 31

  32. Slide 32: Appendix

    ConocoPhillips

  33. Slide 33: 1Q 2013 Cash Flow Waterfall

    1Q 2013 Cash Flow Waterfall End Q1 2013 • Debt of $21.7 B • Debt‐to‐capital ratio of 31% 1 Beginning cash and restricted cash includes cash and cash equivalents of $3.62 B and restricted cash of $0.75 B. 2 Includes discontinued operations. 33

  34. Slide 34: Our Priorities for Cash Flow

    Our Priorities for Cash Flow  Predictable returns to shareholders Dividends  Enhance capital discipline  Investing for margins and cash flows Capital Program  Funds profitable growth  Capacity to fund growth Balance Sheet  Financial strength to withstand cycles Share  Continue to evaluate as

  35. Slide 35: 2013 Production Outlook – On Track

    2013 Production Outlook – On Track MBOED 1Q13 2Q13 3Q13 4Q13 FY13 Continuing Operations 1,5551 1,440 ‐ 1,470 1,425 ‐ 1,475 1,525 ‐ 1,575 1,485 ‐ 1,520 Discontinued Operations 41 40 0 ‐ 40 0 ‐ 40 20 ‐ 40 Total Production 1,596 1,480 ‐ 1,510 1,425 ‐ 1,515 1,525 ‐ 1,615 1,505 ‐ 1,560 1 Includes 11 MBOE

  36. Slide 36: Annualized Net Income Sensitivities

    Annualized Net Income Sensitivities  Crude  Brent/ANS: $75‐85 MM change for $1/BBL change  WTI: $30‐40 MM change for $1/BBL change  WCS1: $20‐25 MM change for $1/BBL change  North American NGL  Representative blend: $10‐15 MM change for $1/BBL change  Natural Gas  HH: $115‐125 MM change for

  37. Slide 37: Base Operations Running to Plan

    Base Operations Running to Plan High‐Quality Legacy Base Production and Capability  Worldwide base operations performing according to plan  Winter weather impacts at San Juan  Production shut in at Calder Field in East Irish Sea  Major turnaround and tie‐in activity planned for 2Q13/3Q13 Permian

  38. Slide 38: Strong Performance from Development Programs

    Strong Performance from Development Programs High‐Margin Worldwide Development Program Inventory  Legacy conventional programs on plan  Coiled tubing drilling continuing at Kuparuk  Production optimization and drilling/completion benefits in western Canada  Lower 48 growth continues  Eagle Ford

  39. Slide 39: Major Projects on Track to Deliver Growth

    Major Projects on Track to Deliver Growth High‐Margin Major Growth Projects in Execution  Oil sands continuing to ramp up  Averaged 109 MBOED  Christina Lake Phase E production startup on schedule for 3Q13  Asia Pacific projects on plan  8 Panyu growth wells on line in China  Malaysia on track

  40. Slide 40: Top-Tier Oil Sands Position with Massive Resource Base

    Top‐Tier Oil Sands Position with Massive Resource Base Oil Sands Saleski CANADA Surmont Thornbury Narrows Lake Christina Clyden Lake Foster Creek COP Leasehold Project Schedule  More than 1 MM net acres  Top‐quartile average steam‐to‐oil ratio  Resource: ~16 BBOE  2nd largest steam‐assisted grav

  41. Slide 41: Substantial Progress on Portfolio High-Grading

    Substantial Progress on Portfolio High‐Grading  Asset sale criteria Announced Announced  Nonstrategic Transactions Proceeds – $B  Mature, limited growth potential  Ability to achieve fair value Kashagan 5.0  Tax‐efficient transactions Algeria 1.7  2012 impact  64 MBOED production  364 MMBOE

  42. Slide 42: Segment Production (MBOED)

    Segment Production (MBOED) * Reflects production from 2012‐2013 closed and announced dispositions. 42

  43. Slide 43: A Diverse Portfolio Delivering Production and Margin Growth

    A Diverse Portfolio Delivering Production and Margin Growth  Diverse, resource‐rich global portfolio  High‐quality legacy base  Profitable worldwide development programs  Major projects in execution  Compelling exploration opportunities  Positioned to deliver high‐margin organic growth and res

  44. Slide 44: Non-GAAP Reconciliations

    Non‐GAAP Reconciliations 2012 Return on Capital Employed Numerator ($MM) Net Income Attributable to ConocoPhillips $ 8,428 Adjustment to exclude special items (1,694) Net income attributable to noncontrolling interests 70 After‐tax interest expense 461 ROCE Earnings $ 7,265 Denominator ($MM) Average

  45. Slide 45: Abbreviations and Glossary

    Abbreviations and Glossary  3‐D: three dimensional  Liquid Yield: liquid‐to‐gas ratio  4‐D: four dimensional  LNG: liquefied natural gas  ANS: Alaska North Slope  M: thousand  B: billion  MM: million  Base Production: production from existing infrastructure  MBOED: thousands of barrels of

  46. Slide 46: Investor Information

    Investor Information  Stock Ticker: NYSE: COP  Headquarters: ConocoPhillips 600 N. Dairy Ashford Road Houston, Texas 77079 www.conocophillips.com/investor  Investor Relations:  Telephone: +1 212‐207‐1996  Ellen DeSanctis: ellen.r.desanctis@conocophillips.com  Vladimir R. dela Cruz: v.r.delacru

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