Conocophillips · NYSE:COP
Conocophillips — Q3 2012 Earnings Presentation
29 slides from Conocophillips's earnings presentation, Oct 25, 2012
Slide 1: 3rd Quarter 2012 Conference Call
3rd Quarter 2012 Conference Call Ryan Lance, Chairman and CEO Jeff Sheets, EVP, Finance and CFO Matt Fox, EVP, Exploration & Production October 25, 2012
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: Third-Quarter Highlights
Third-Quarter Highlights Strong performance in first full quarter as an independent E&P company Strategic Continued progress on strategic asset disposition program Significant exploration activity continues Achieved quarterly production of 1.525 MMBOED Operational Continued production ramp up from s
Slide 4: State of the Business
State of the Business Business continues to run well Annual planned maintenance activities completed Volume and margin growth plans on target North American unconventional drilling programs achieving production milestones Major projects on schedule Continuing to build conventional and unco
Slide 5: 3Q12 Performance – Adjusted Earnings
FINANCIAL REVIEW 3Q12 Performance – Adjusted Earnings Adjusted Earnings ($MM) Adjusted earnings down 7% vs. 3Q11; up 15% vs. 2Q12 Production volumes as planned Solid performance across the portfolio Maintenance completed as planned Average realized price down $5/BOE vs. 3Q11; down $1/BOE vs. 2Q1
Slide 6: 3Q12 Performance – Production
FINANCIAL REVIEW 3Q12 Performance – Production Gas O Liquids T H MBOED E R 6
Slide 7: Lower 48 & Latin America
FINANCIAL REVIEW Lower 48 & Latin America Production (MBOED) Realized Prices Liquids Gas 3Q11 4Q11 1Q12 2Q12 3Q12 Crude $89 $94 $99 $90 $90 ($/Bbl) NGL $52 $52 $45 $35 $31 ($/Bbl) Nat Gas $4.15 $3.48 $2.65 $2.10 $2.64 ($/Mcf) Adjusted Earnings ($MM) Continued success in ramping up production from Lo
Slide 8: Canada
FINANCIAL REVIEW Canada Production (MBOED) Realized Prices Liquids Gas 3Q11 4Q11 1Q12 2Q12 3Q12 Crude $85 $87 $84 $75 $77 ($/Bbl) Bitumen $58 $70 $61 $51 $57 ($/Bbl) Nat Gas $3.56 $2.93 $1.98 $1.61 $2.05 ($/Mcf) Adjusted Earnings ($MM) Continued growth in oil sands production 30% increase in liqui
Slide 9: Alaska
FINANCIAL REVIEW Alaska Production (MBOED) Realized Prices Liquids Gas 3Q11 4Q11 1Q12 2Q12 3Q12 Crude $107 $109 $112 $112 $107 ($/Bbl) Adjusted Earnings ($MM) Major turnaround activity in 3Q12 completed as planned Realized crude prices remain strong Barrels sold from inventory in 3Q12 contributed ap
Slide 10: Asia Pacific & Middle East
FINANCIAL REVIEW Asia Pacific & Middle East Production (MBOED) Realized Prices1 Liquids Gas 3Q11 4Q11 1Q12 2Q12 3Q12 Crude $112 $111 $118 $109 $105 ($/Bbl) Nat Gas $10.68 $9.99 $10.40 $11.47 $10.64 ($/Mcf) Adjusted Earnings ($MM) Peng Lai producing 45 MBOED net at end of 3Q12 Resumed full production
Slide 11: Europe
FINANCIAL REVIEW Europe Production (MBOED) Realized Prices Liquids Gas 3Q11 4Q11 1Q12 2Q12 3Q12 Crude $115 $110 $121 $110 $110 ($/Bbl) Nat Gas $9.08 $9.88 $9.98 $9.52 $8.87 ($/Mcf) Adjusted Earnings ($MM) 3Q12 production impacted by asset dispositions and increased maintenance downtime 8 MBOED imp
Slide 12: Other International
FINANCIAL REVIEW Other International Production (MBOED) Realized Prices1 Liquids Gas 3Q11 4Q11 1Q12 2Q12 3Q12 Crude $115 $112 $122 $109 $108 ($/Bbl) Nat Gas $2.36 $2.36 $2.52 $2.45 $3.44 ($/Mcf) Adjusted Earnings ($MM) 2Q12 earnings adversely impacted by foreign exchange rates, taxes and exploration
Slide 13: Corporate and Other
FINANCIAL REVIEW Corporate and Other Adjusted Earnings ($MM) 3Q12 results include benefits from: Licensing revenue Foreign exchange rates 2012 annual adjusted earnings impact of approximately $850 MM Repaid $2.0 B of debt in the quarter Debt-to-capital ratio of 31% at end 3Q12 13
Slide 14: Operating Segments Margins and Returns
FINANCIAL REVIEW Operating Segments Margins and Returns Income per BOE ($) Cash Contribution per BOE ($) Return on Capital Employed Cash Return on Capital Employed Metrics are adjusted for Special Items. 14
Slide 15: 3Q12 Performance – Company Cash Flow
FINANCIAL REVIEW 3Q12 Performance – Company Cash Flow $B 2 1 3 1 Beginning cash and restricted cash includes cash and cash equivalents of $1.04 B and restricted cash of $5.00 B. 2 Cash from continuing operating activities was $3.48 B. 3 Ending cash and restricted cash includes cash and cash equivale
Slide 16: Operations Review: Lower 48 & Latin America
OPERATIONS REVIEW Lower 48 & Latin America Eagle Ford Condensate Stabilization Eagle Ford ramp-up continuing Achieved 86 MBOED peak rate during 3Q12 Expect 100 MBOED peak rate during 4Q12 Adding infrastructure to maximize sales Acreage to be HBP by mid-2013 Increasing Bakken activity 27 MB
Slide 17: Operations Review: Canada
OPERATIONS REVIEW Canada Christina Lake Expansion Oil Sands programs ramping up Expect to reach 100 MBOED milestone in 4Q12 Christina Lake Phase D first production ahead of schedule Surmont 2 construction progressing Narrows Lake Phase A and Christina Lake Phase F to be sanctioned in 4Q12 De
Slide 18: Operations Review: Alaska
OPERATIONS REVIEW Alaska Kuparuk 2012 turnarounds completed Kuparuk 14 days ahead of schedule Alpine and Prudhoe completed as planned Sanctioned Alpine West (CD5) Continuing ANS Gas LNG concept selection Preparing for a Chukchi well in 2014 AlpineAlpine CD2 Facility More capital investment could
Slide 19: Operations Review: Asia Pacific & Middle East
OPERATIONS REVIEW Asia Pacific & Middle East APLNG Australia activities on track Continued progress on APLNG Successful Poseidon appraisal well at Boreas-1 Drilled and cored first well in Canning Basin China recovery and new growth Peng Lai producing 45 MBOED (net) First well of Panyu Grow
Slide 20: Operations Review: Europe
OPERATIONS REVIEW Europe Jasmine Jacket Install at Judy U.K. focus on growth projects Completed a 44-day turnaround at Judy Jasmine first oil expected 2nd half of 2013 Installed Jasmine pipeline and jackets Drilling results exceeding expectations Exploration program at Greater Clair Norway
Slide 21: Operations Review: Other International
OPERATIONS REVIEW Other International MLN, Algeria Completed sale of 30% interest in NMNG Libya production at pre-conflict levels Executed Faregh Gas Sales Agreement Kashagan first production expected in 1st half of 2013 Angola blocks 36/37 seismic complete Waha, Libya 21
Slide 22: Summary – Plans Remain on Track
Summary – Plans Remain on Track Strong operational quarter – first full quarter post spin Focused on executing major projects and drilling programs Building conventional and unconventional exploration portfolio Executing asset disposition program Our long-term value proposition remains unchanged Ana
Slide 23: 3rd Quarter 2012 Conference Call
3rd Quarter 2012 Conference Call October 25, 2012
Slide 24: Volume and Realized Price Overview
Volume and Realized Price Overview 3Q12 Sales Volume Mix Realized Prices 3Q11 2Q12 3Q12 N.A. (WTI) $89 $88 $89 Crude ($/Bbl) Intl & Alaskan $111 $110 $107 Crude ($/Bbl) N.A. Nat Gas $3.94 $1.93 $2.44 ($/Mcf) Intl Nat Gas $11.50 $11.69 $11.88 ($/Mcf) NGL ($/Bbl) $56 $44 $40 Bitumen $58 $51 $57 ($/Bbl
Slide 25: COP Non-GAAP Reconciliations
COP Non-GAAP Reconciliations ROCE Operating Segments 3Q11 4Q11 1Q12 2Q12 3Q12 Numerator ($MM) Net Income Attributable to ConocoPhillips 2,616 3,390 2,937 2,267 1,798 Adjustment to exclude special items (704) (1,276) (1,096) (732) (26) Exclude adjusted earnings for Corporate and Other 215 203 281 225
Slide 26: COP Non-GAAP Reconciliations
COP Non-GAAP Reconciliations CROCE Operating Segments 3Q11 4Q11 1Q12 2Q12 3Q12 Numerator ($MM) Net Income Attributable to ConocoPhillips 2,616 3,390 2,937 2,267 1,798 Adjustment to exclude special items (704) (1,276) (1,096) (732) (26) Exclude adjusted earnings for Corporate and Other 215 203 281 22
Slide 27: COP Non-GAAP Reconciliations
COP Non-GAAP Reconciliations Earnings and Cash per BOE - Operating Segments 3Q11 4Q11 1Q12 2Q12 3Q12 $ Millions, except per BOE amounts Net Income Attributable to ConocoPhillips 2,616 3,390 2,937 2,267 1,798 Adjustment to exclude special items (704) (1,276) (1,096) (732) (26) Exclude adjusted earnin
Slide 28: COP Non-GAAP Reconciliations
COP Non-GAAP Reconciliations Reconciliation of Earnings to Adjusted Earnings Millions of dollars, except per share amounts 2011 2012 3Q 4Q 1Q 2Q 3Q Consolidated Earnings 2,616 3,390 2,937 2,267 1,798 Adjustments: Impairments - 649 520 30 - Net (gain)/loss on asset sales 280 15 (937) (285) (310) Boha
Slide 29: COP Non-GAAP Reconciliations
COP Non-GAAP Reconciliations Reconciliation of Earnings to Adjusted Earnings Millions of dollars, except per share amounts 2011 2012 3Q 4Q 1Q 2Q 3Q Canada Earnings (loss) 73 (110) (549) (94) (31) Adjustments: Impairments - 190 520 - - Net (gain)/loss on asset sales - 12 - - - Adjusted earnings (loss