ConocoPhillips · NYSE:COP
ConocoPhillips — Q4 2012 Earnings Presentation
35 slides from ConocoPhillips's earnings presentation, Jan 31, 2013
Slide 1: 4th Quarter 2012 Conference Call
4th Quarter 2012 Conference Call Ryan Lance, Chairman and CEO Jeff Sheets, EVP, Finance and CFO Matt Fox, EVP, Exploration & Production Jan. 31, 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: Highlights and Accomplishments
Highlights and Accomplishments Completed separation of downstream business to emerge as North America’s largest independent E&P company Strategic Completed asset sales of $2.1 B and announced $9.6 B in agreements for additional dispositions Delivered strong total shareholder returns Met volume targe
Slide 4: 4Q12 Performance – Adjusted Earnings
FINANCIAL REVIEW 4Q12 Performance – Adjusted Earnings Adjusted Earnings ($MM) Adjusted earnings down 14% vs. 4Q11; up 3% vs. 3Q12 4Q12 adjusted EPS benefits from 7% reduction in share count vs. 4Q11 Production volumes as planned Solid performance across the portfolio Maintenance completed as p
Slide 5: 4Q12 Performance – Production
FINANCIAL REVIEW 4Q12 Performance – Production O T H MBOED E R Liquids growing as a percentage of production from continuing operations 1 Continuing Discontinued Operations Operations2 1 Includes downtime of 15 MBOED from discontinued operations. 2 Reflects production from Algeria and Nigeria. 5
Slide 6: 2013 Production Outlook
FINANCIAL REVIEW 2013 Production Outlook O T MBOED Total 1Q13 outlook: H E 1,580-1,600 MBOED R 2013 outlook from continuing operations: 1,475-1,525 MBOED Expect significant dip in 2Q/3Q 2013 Seasonality Planned maintenance Project tie-ins Expect 4Q13 ramp up 1 1 Includes Vietnam, Statfjord, Al
Slide 7: Lower 48 and Latin America
FINANCIAL REVIEW Lower 48 and Latin America Production (MBOED) Realized Prices Adjusted Earnings ($MM) Production up sequentially and year-over-year Up 3% vs. 3Q12 Up 7% vs. 4Q11; liquids up 20% Eagle Ford production milestone 103 MBOED peak rate during 4Q12 Average 4Q12 production ~89 MBOED
Slide 8: Canada
FINANCIAL REVIEW Canada Production (MBOED) Realized Prices Adjusted Earnings ($MM) Production continues to increase Up 1% vs. 3Q12; up 6% vs. 4Q11 Production growth from oil sands for five consecutive quarters 23% increase in liquids and 7% decrease in natural gas production vs. 4Q11 Portfolio
Slide 9: Alaska
FINANCIAL REVIEW Alaska Production (MBOED) Realized Prices Adjusted Earnings ($MM) Production up sequentially post 3Q12 turnaround activity Production down year-over-year due to normal field decline Earnings volatility created by lift timing differences and petroleum production tax impacts 9
Slide 10: Asia Pacific and Middle East
FINANCIAL REVIEW Asia Pacific and Middle East Production (MBOED) Realized Prices1 Gas Adjusted Earnings ($MM) Production up sequentially and year-over-year Up 5% vs. 3Q12 Up 11% vs. 4Q11 Panyu growth project online First production from Gumusut Field Earnings reflect lower JCC prices in 4Q12 1 R
Slide 11: Europe
FINANCIAL REVIEW Europe Production (MBOED) Realized Prices Adjusted Earnings ($MM) Production up sequentially post 3Q12 turnaround activity Production down year-over-year due to normal field decline, downtime and dispositions Sequential earnings reflect higher sales volumes and stronger pricing Segm
Slide 12: Other International
FINANCIAL REVIEW Other International Production (MBOED)1 Realized Prices2 Adjusted Earnings ($MM) 1 Announced agreements to sell interest in Kashagan, Algeria and Nigeria business units Reported as discontinued operations Continuing operations include Libya, Russia and exploration activity in Ango
Slide 13: Corporate and Other
FINANCIAL REVIEW Corporate and Other Adjusted Earnings ($MM) Segment earnings for current quarter in line with full-year guidance 3Q12 benefited from higher licensing revenues Issued $2 B of low-cost debt in 4Q12 Repaid commercial paper Retired debt in 4Q12 13
Slide 14: Margins and Returns
FINANCIAL REVIEW Margins and Returns Adjusted Earnings ($MM) Return on Capital Employed (%) Cash Contribution per BOE ($) Income per BOE ($) Numbers have been adjusted for special items. Per BOE metrics reflect operating segments only. 14
Slide 15: 2012 Performance – Company Cash Flow
FINANCIAL REVIEW 2012 Performance – Company Cash Flow Year-end 2012: $B • Debt of $21.7 B • Debt-to-capital ratio of 31% 3 1 Beginning cash and short-term investments includes cash and cash equivalents of $5.78 B and short-term investments of $0.58 B. 2 Disc Ops from Kashagan, Algeria and Nigeria re
Slide 16: 2012 Reserve Replacement
OPERATIONS REVIEW 2012 Reserve Replacement MMBOE Year-end reserves of 8.6 BBOE Organic reserve replacement rate of 156% Total reserve replacement rate of 142% Organic reserve additions of 942 MMBOE, including: Canadian Oil Sands, including Foster Creek, Christina Lake, Narrows Lake Lower 48,
Slide 17: Lower 48 and Latin America
OPERATIONS REVIEW Lower 48 and Latin America Bakken Eagle Ford sets new production record Achieved 103 MBOED peak rate during 4Q12 11 operated rigs drilling at year-end Bakken ramping up Averaged 24 MBOED in 4Q12 9 operated rigs drilling at year-end Permian increasing conventional and unconv
Slide 18: Canada
OPERATIONS REVIEW Canada Oil Sands Oil Sands projects executing well Exceeded 100 MBOED average in 4Q12 7 major project phases in execution across FCCL and Surmont Western Canada focused on liquids 2012-2013 programs targeting liquids/light oil 16 operated rigs currently drilling over winter
Slide 19: Alaska
OPERATIONS REVIEW Alaska Kuparuk Production restored following successful 3Q12 turnarounds Development drilling innovation Octo-lateral coiled tubing drilling Alpine West CD5 Project sanctioned and progressing ANS Gas LNG concept selection to be Alpine complete in 1Q13 More capital investment coul
Slide 20: Asia Pacific and Middle East
OPERATIONS REVIEW Asia Pacific and Middle East Malaysia first oil Gumusut Gumusut start-up through temporary facilities with a year-end exit rate of 9 MBOED net Production sharing contract signed for operated, offshore exploration Block SB311 China performing Peng Lai maintained net production
Slide 21: Europe
OPERATIONS REVIEW Europe Jasmine United Kingdom developments progressing Significant unplanned downtime in 4Q12 Projects progressing Katy development completed and producing Clair Ridge and Jasmine developments on track Awarded two licenses in the 27th round in Central North Sea Norway str
Slide 22: Other International
OPERATIONS REVIEW Other International Angola Announced sales agreements for Kashagan, Nigeria and Algeria Expect close mid-2013 2012 average production rate ~25 MBD liquids ~150 MMCFD natural gas Year-end 2012 reserves ~180 MMBBL liquids ~830 BCF natural gas Nigeria unplanned downtime
Slide 23: 2013 Priorities
2013 Priorities Ongoing focus on safety and operations excellence Complete announced divestitures Execute drilling programs and major growth projects Advance conventional and unconventional exploration activities Maintain commitment to shareholders 23
Slide 24: 4th Quarter 2012 Conference Call
4th Quarter 2012 Conference Call Jan. 31, 2013
Slide 25: Fourth-Quarter Volume and Realized Price Overview
Fourth-Quarter Volume and Realized Price Overview 4Q12 Sales Volume Mix Realized Prices Q42012 4Q2011 Delta N.A. (WTI) $88 $93 -$6 Crude ($/Bbl) Intl & Alaskan $108 $109 -$1 Crude ($/Bbl) N.A. Nat Gas $3.14 $3.29 -$0.15 ($/Mcf) Intl Nat Gas $12.06 $12.22 -$0.16 ($/Mcf) 4Q11 Sales Volume Mix NGL ($/B
Slide 26: Full-Year Volume and Realized Price Overview
Full-Year Volume and Realized Price Overview 2012 Sales Volume Mix Realized Prices 2012 2011 Delta N.A. (WTI) $90 $92 -$2 Crude ($/Bbl) Intl & Alaskan $110 $108 $2 Crude ($/Bbl) N.A. Nat Gas $2.49 $3.80 -$1.31 ($/Mcf) Intl Nat Gas $12.31 $10.93 $1.38 ($/Mcf) 2011 Sales Volume Mix NGL ($/Bbl) $46 $56
Slide 27: 2012 Performance – Production
2012 Performance – Production O T H MBOED E R Continuing Discontinued Operations Operations1 1 Reflects production from Algeria and Nigeria. 27
Slide 28: Quarterly Margins and Returns
Quarterly Margins and Returns Adjusted Earnings ($) Return on Capital Employed (%) Cash Contribution per BOE ($) Income per BOE ($) Margins and returns are adjusted for special items. Per BOE metrics reflect operating segments only. 28
Slide 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations Return on Capital Employed 2010 2011 2012 Numerator ($MM) Net Income Attributable to ConocoPhillips 11,358 12,436 8,428 Adjustment to exclude special items (4,664) (4,454) (1,694) Net income attributable to noncontrolling interests 59 66 70 After-tax interest expense 759 620
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations Return on Capital Employed 4Q11 1Q12 2Q12 3Q12 4Q12 Numerator ($MM) Net Income Attributable to ConocoPhillips 3,390 2,937 2,267 1,798 1,426 Adjustment to exclude special items (1,339) (1,158) (767) (98) 329 Net income attributable to noncontrolling interests 20 18 22 15 15 A
Slide 31: Non-GAAP Reconciliations
Non-GAAP Reconciliations Earnings and Cash per BOE - Operating Segments 2010 2011 2012 $ Millions, except per BOE amounts Net Income Attributable to ConocoPhillips 11,358 12,436 8,428 Adjustment to exclude special items (4,664) (4,454) (1,694) Exclude adjusted earnings for Corporate and Other (95) 9
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations Earnings and Cash per BOE - Operating Segments 4Q11 1Q12 2Q12 3Q12 4Q12 $ Millions, except per BOE amounts Net Income Attributable to ConocoPhillips 3,390 2,937 2,267 1,798 1,426 Adjustment to exclude special items (1,339) (1,158) (767) (98) 329 Exclude adjusted earnings for
Slide 33: Non-GAAP Reconciliations
Non-GAAP Reconciliations Reconciliation of Earnings to Adjusted Earnings Millions of dollars, except per share amounts 2010 2011 2012 FY 4Q FY 1Q 2Q 3Q 4Q FY Consolidated Earnings 11,358 3,390 12,436 2,937 2,267 1,798 1,426 8,428 Adjustments: Impairments 638 649 649 520 30 - 351 901 Cancelled projec
Slide 34: Non-GAAP Reconciliations
Non-GAAP Reconciliations Reconciliation of Earnings to Adjusted Earnings Millions of dollars 2011 2012 4Q 1Q 2Q 3Q 4Q Alaska Earnings 426 620 551 535 570 Adjustments: Pending claims and settlements - - - - 25 Adjusted earnings 426 620 551 535 595 Lower 48 and Latin America Earnings 292 255 119 182 4
Slide 35: Non-GAAP Reconciliations
Non-GAAP Reconciliations Reconciliation of Earnings to Adjusted Earnings Millions of dollars 2011 2012 4Q 1Q 2Q 3Q 4Q Europe Earnings 565 389 669 132 308 Adjustments: International tax law changes - - - 167 - Impairments - - 30 - 80 Net (gain)/loss on asset sales - - (285) - - Adjusted earnings 565