ConocoPhillips · NYSE:COP
ConocoPhillips — Q4 2014 Earnings Presentation
21 slides from ConocoPhillips's earnings presentation, Jan 29, 2015
Slide 1: 4Q14 Conference Call
4Q14 Conference Call Jan. 29, 2015
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, operating results or the industries or markets in which
Slide 3: Ryan Lance, Chairman & CEO
conocStips Ryan Lance Chairman & CEO
Slide 4: 2014 Highlights
2014 Highlights Operational Financial Strategic • 4% production growth • $6.6 B adjusted earnings; • 124% organic reserve year-over-year1 $5.30 adjusted EPS replacement ratio • Five major project startups; • $15.8 B CFO2; $5.1 B • Completed announced 37% production growth ending cash asset dispositi
Slide 5: Flexible & Resilient – Response to Weak Prices in 2015
Flexible & Resilient – Response to Weak Prices in 2015 DIVIDEND • Dividend is top priority for capital allocation • Focus remains on cash flow neutrality in 2017 REMAINS TOP PRIORITY • Further reducing 2015 capital expenditures by $2 billion to $11.5 billion • Preserving future investment opportunit
Slide 6: Jeff Sheets, EVP, Finance and CFO
Jeff Sheets EVP, Finance and CFO
Slide 7: 4Q14 Performance – Adjusted Earnings
4Q14 Performance – Adjusted Earnings Highlights • Strong operational performance in 4Q14 Adjusted • Realized price dropped by 19% vs. 4Q13 and Earnings 18% vs. 3Q14 ($MM) 1,738 1,611 • Earnings also impacted by dry hole expense 742 4Q14 Adjusted Earnings ($MM) 4Q13 3Q14 4Q14 Lower 48 ($33) Canada $8
Slide 8: 2014 Production From Continuing Operations
2014 Production From Continuing Operations 4% PRODUCTION GROWTH 61 (1) Liquids 57 Planned 1 Gas 4 Unplanned 1 Total 61 Dispositions (3) 1,532 1,472 Total (1) 2013¹ Downtime & Dispositions² Net Growth 2014¹ All volumes in MBOED. 1 Excludes Libya volumes of 30 MBOED in 2013 and 8 MBOED in 2014. 2 Disp
Slide 9: 2014 Performance – Cash Margin Improvement
2014 Performance – Cash Margin Improvement 8% MARGIN GROWTH Cash Price Margin Normalized 30.89 28.55 29.55 28.55 ($/BOE) Cash Margin ($/BOE)1 2013 2014 2013 2014 Average Realized Price Normalized Based On 2013 $67.62 $64.59 Price ($/BOE) WTI $98 / Brent $109 / HH $3.65 Operating segments only. Numbe
Slide 10: 2014 Performance – Company Cash Flow
2014 Performance – Company Cash Flow $B Year-end 2014 • Debt of $22.6 B 1.3 1.2 • Debt-to-capital ratio of 30% 15.8 0.5 Freeport⁴ (0.5) 17.1 1.4 6.5 3.5 Freeport⁴ +0.5 5.1 2014 Beginning CFO Excluding FCCL Distribution Working Capital Net Proceeds from Capital Dividends Debt Year-End 2014 Cash & Sho
Slide 11: Exercising Financial Flexibility
Exercising Financial Flexibility • Funding of dividend remains highest priority New Debt Issuance Rates1 • Expect to achieve cash flow neutrality in 2017 5% 4% • Increasing capital flexibility 3% • Balance sheet strength to weather price downturn 2% • $5.1 billion of cash at year-end 2014 1% • Debt
Slide 12: Matt Fox, EVP, Exploration & Production
Matt Fox EVP, Exploration & Production
Slide 13: 2014 Reserve Replacement
2014 Reserve Replacement 124% Organic RRR 97% Total RRR 9,065 (159) 8,906 742 742 (598) 583 8,921 8,323 8,323 8,323 YE 2013 2014 Production¹ 2014 Reserves Organic Growth YE 2014 Organic Acquisitions and YE 2014 Reserves Start Reserves Dispositions Reserves RRR represents reserve replacement ratio. A
Slide 14: 2014 Operating Highlights
2014 Operating Highlights Gumusut • Full-year production of 1,532 MBOED from continuing operations, excluding 8 MBOED from Libya • Completed major turnarounds across the portfolio; strong underlying base performance • 35% growth in Eagle Ford and Bakken production year-over-year • Major project star
Slide 15: Exercising Capital Flexibility
Exercising Capital Flexibility 13.5 1.8 11.5 (1.4) (0.3) (0.3) 1.5 4.8 Rig counts: Lower 48 • Eagle Ford ~6 unconventional 4.5 • Bakken ~3 appraisal • Permian ~4 5.0 3.6 1.9 1.9 Original 2015 Base Development Major Projects Exploration Revised 2015 Capital Guidance Capital Guidance Base Development
Slide 16: 2015 Operational Priorities
2015 Operational Priorities • Expect full-year production growth of 2 to 3 percent Eldfisk II • 1Q15: 1,570 to 1,610 MBOED • Alaska: Progressing CD-5 and Drill Site 2S major projects • Lower 48: Upper Eagle Ford pilot testing; ongoing exploration and appraisal in deepwater GOM • Canada: First steam
Slide 17: Ryan Lance, Chairman & CEO
conocStips Ryan Lance Chairman & CEO
Slide 18: Appendix
conocStips Appendix
Slide 19: 2014 Annual Performance – Adjusted Earnings
2014 Annual Performance – Adjusted Earnings Highlights • 4 percent production growth1 Adjusted • 8 percent price-normalized margin growth Earnings 7,061 6,609 ($MM) • Strong operational performance • Earnings impacted by weakening price environment 2014 Adjusted Earnings ($MM) 2013 2014 Lower 48 $86
Slide 20: 4Q14 Production From Continuing Operations
4Q14 Production From Continuing Operations 5% PRODUCTION GROWTH 68 28 Planned 27 Liquids 59 Unplanned 2 Gas 9 Dispositions (1) Total 68 1,567 1,471 Total 28 4Q13¹ Downtime & Dispositions² Net Growth 4Q14¹ All volumes in MBOED. 1 Excludes Libya volumes of 2 MBOED in 4Q13 and 22 MBOED in 4Q14. 2 Dispo
Slide 21: Freeport LNG Termination Agreement Impact
Freeport LNG Termination Agreement Impact In July 2013, ConocoPhillips reached agreement to terminate its long-term agreement at the Freeport LNG Terminal. The agreement took effect in the fourth quarter of 2014. As a result of this transaction, ConocoPhillips anticipates saving approximately $50 mi