ConocoPhillips · NYSE:COP
ConocoPhillips — Non-Deal Roadshow (November 2013)
43 slides from ConocoPhillips's roadshow presentation, Nov 19, 2013
Slide 1: A New Class of E&P Investment: Company Overview
a new class of E&P INVESTMENT Company Overview Updated Nov. 19, 2013.
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: 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
Slide 4: ConocoPhillips: Unmatched as an Independent E&P Today
ConocoPhillips: Unmatched as an Independent E&P Today Production: 1,505‐1,515 MBOED1 (2013e) Largest independent E&P Liquids company 26% LNG + International Gas 56% 18% North American Gas Diverse asset base with scope and scale Proved Reserves: 8.6 BBOE (YE 2012) Multiple sources of growth P
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 Dives
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
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 4.5 percent increase in 3Q13; Integrateds targeting consistent increases In
Slide 8: Commitment to Capital Discipline and Growth
Commitment to Capital Discipline and Growth Annual Capital Production – MMBOED ~$16 B 2.0 Exploration Exploration Delivers 1.8 15% & Appraisal Appraisal 2017+ & growth 1.6 Major Projects * Major Peak spend Major for named 1.4 30% Projects projects Projects Development occurs in 1.2 2014 Programs 1.0
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
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
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
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
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
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
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
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 >1,800 identified d
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
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 Eagle Ford Competitors – Average Oil Rate per Well (B
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
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
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‐4Q startup High‐value exploration opportunities can be tested from Jasmine platform Additional projects inc
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
Slide 23: Malaysia: Projects Ramping Up, with Upside
Malaysia: Projects Ramping Up, with Upside Malaysia 5‐year investment: ~$2.5 B Full‐cycle F&D: ~$15/BOE 4 developments in execution: Gumusut, SNP, KBB and Malikai Gumusut full field and SNP first oil imminent Additional growth potential in Pisagan, Ubah, COP Acreage Limbayong, KME discover
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
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 Senegal Colombia Indonesia Malaysia Angola Browse & Bonaparte Canning Unconventional
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
Slide 27: International Conventionals: Deepwater Angola
International Conventionals: Deepwater Angola Angola Play identified as a probable analog to Brazil pre‐salt play Recent discoveries de‐risk play concept in Kwanza Basin ConocoPhillips‐operated 2.5 MM acre position 2012‐2013: 3‐D seismic acquisition confirms presence of multiple promising pr
Slide 28: Exploration Catalysts in Deepwater GOM
Exploration Catalysts in Deepwater GOM 2013 Gulf of Mexico Exploration Two significant discoveries announced Texas Louisiana Shenandoah appraisal well discovery Gila Tiber Shenandoah >1,000 feet net pay WI: 20% Target: L Tertiary WI: 18% Target: L Tertiary WI: 30% Target: L Tertiary Coronado w
Slide 29: 2013 – 2014: Positioned for Growth
2013 – 2014: Positioned for Growth Operational Financial Strategic Significant Maintain strong Delivering on value inflection point balance sheet proposition Visible results from Demonstrate Complete exploration margin announced asset programs improvement sales Committed to safe Focu
Slide 30: 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. 30
Slide 31: Appendix
ConocoPhillips
Slide 32: 2013 Production Guidance – Unchanged Except For Libya
2013 Production Guidance – Unchanged Except For Libya 4Q13 guidance excludes Libya (50 MBOED) Libya Continuing Operations 1 1Q13 2Q13 3Q13 4Q13 FY13 1Q13 2Q13 3Q13 4Q13 FY13 MBOED Actual Actual Actual Outlook Outlook Continuing Operations 1,555 1,510 1,470 1,485 – 1,525 1,505 – 1,515 Discontinued Op
Slide 33: 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
Slide 34: Unconventional Reservoirs: Optimizing Full Field Development
Unconventional Reservoirs: Optimizing Full Field Development Science‐based experimentation to optimize unconventional recovery Rapid experimentation with disciplined science Eagle Ford EUR growth more than 100% since 2010 Bakken EUR growth more than 50% since 2010 Pursuing a multitude of pro
Slide 35: Top-Tier Oil Sands Position with Massive Resource Base
Top‐Tier Oil Sands Position with Massive Resource Base Oil Sands 8 Competitive Resource Cumulative Steam‐to‐Oil Ratio1 7 6 5 4 Industry Average 3 2 2.7 2.0 2.3 1 0 Christina Lake Foster Creek Surmont ConocoPhillips Projects Other Oil Sands Projects Project Schedule More than 1 MM net acres Top‐q
Slide 36: Oil Sands: Unlocking the Value in Major Projects
Oil Sands: Unlocking the Value in Major Projects Game‐changing technology to reduce oil sands cost of supply Advances based on modeling, Fish Hook lab and field work Infill Well Better returns with lower emissions Fish hook and extension wells Flow control devices Extension Solvent injecti
Slide 37: Substantial Progress on Portfolio High-Grading
Substantial Progress on Portfolio High‐Grading Asset sale criteria Announced Expected Nonstrategic Transactions1 Proceeds – $B1 Mature, limited growth potential Ability to achieve fair value Algeria ~1.75 Tax‐efficient transactions Nigeria ~1.75 2012 impact 64 MBOED production 364 MM
Slide 38: International Conventionals: Offshore Senegal
International Conventionals: Offshore Senegal Senegal Farmed in to the Rufisque, Sangomar and Sangomar Deep blocks in the Mauritania‐Senegal‐Guinea‐Bissau Basin in July 2013 Approximately 650,000 net acres Acreage covered by 3‐D seismic survey, COP Acreage prospects identified Drilling expec
Slide 39: Segment Production (MBOED)
Segment Production (MBOED) * Reflects production from 2012‐2013 closed and announced dispositions. 39
Slide 40: A Diverse Portfolio Delivering Production and Margin Growth
A Diverse Portfolio Delivering Production and Margin Growth Diverse, resource‐rich global portfolio High‐quality legacy base Profitable worldwide development programs Major projects in execution Compelling exploration opportunities Positioned to deliver high‐margin organic growth and res
Slide 41: Non-GAAP Reconciliations
Non‐GAAP Reconciliations 2012 Return on Capital Employed Numerator ($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
Slide 42: Abbreviations and Glossary
Abbreviations and Glossary 3‐D: three dimensional Liquid Yield: liquid‐to‐gas ratio ANS: Alaska North Slope LNG: liquefied natural gas B: billion M: thousand Base Production: production from existing infrastructure MM: million BBL: barrel MBOED: thousands of barrels of oil equiva
Slide 43: Investor Information
Investor Information Stock Ticker: NYSE: COP www.conocophillips.com/investor Headquarters: New York IR Office: ConocoPhillips ConocoPhillips 600 N. Dairy Ashford Road 375 Park Avenue, Suite 3702 Houston, Texas 77079 New York, New York 10152 Investor Relations: Telephone: +1.212.207.1996