ConocoPhillips · NYSE:COP
ConocoPhillips — Howard Weil Energy Conference 2014
45 slides from ConocoPhillips's conference presentation, Mar 25, 2014
Slide 1: A New Class of E&P Investment
a new class of E&P INVESTMENT Howard Weil Energy Conference Matt Fox, EVP, Exploration and Production March 25, 2014
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: 1,490 – 1,530 MBOED1 (1Q14e) Largest independent E&P Liquids company LNG + International Gas North American Gas Diverse asset base with scope and scale Proved Reserves: 8.9 BBOE (YE 2013) Multiple sources of growth Positioned
Slide 5: 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. 5
Slide 6: 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 7: Commitment to Capital Discipline and Growth
Commitment to Capital Discipline and Growth Annual Capital Production – MMBOED ~$16 B Exploration Delivers 15% 2017+ & Appraisal growth Major Projects * Peak spend Major for named 30% Projects projects Development occurs in 2014 Programs Development Mitigates 45% base Programs decline Base Base Prot
Slide 8: 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 9: 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 10: 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 11: Growth In Higher-Margin Production
Growth In Higher-Margin Production Growth comes from areas with higher margins than the company average Significant growth in North American liquids Alaska and Europe liquids and North American natural gas impacted by normal field decline 1 Continuing operations adjusted for dispositions, Liby
Slide 12: 2013 Performance – Cash Margin Improvement
2013 Performance – Cash Margin Improvement Operating segments only. Numbers have been adjusted for special items. A reconciliation is available in the appendix. 1 Price normalized using published sensitivities. 12
Slide 13: 2013 Reserve Replacement
2013 Reserve Replacement Reserve Additions (MMBOE)1 Year-end reserves of 8.9 BBOE Organic reserve replacement ratio of 179% Other 150 Total reserve replacement ratio of 147%; asset sales reduced reserves by 188 MMBOE APME 190 Lower 48 470 Organic reserve additions of approximately 1.1 BBOE,
Slide 14: Lower 48 & Latin America; Canada
Lower 48 & Latin America Canada Bakken Surmont What to Watch in 2014 What to Watch in 2014 Continuing growth in Eagle Ford and Continuing development drilling and Bakken unconventional exploration activity in western Canada Increasing unconventional activity in Permian, Niobrara and Colombia
Slide 15: Alaska; Europe
Alaska Europe Nabors 7ES at Kuparuk Jasmine What to Watch in 2014 What to Watch in 2014 Major turnaround at Prudhoe Ekofisk South, Jasmine and East Irish Sea ramp up Ongoing development activity at Kuparuk Startup expected at Britannia Long-Term Continuing major project activity on CD5, Co
Slide 16: Asia Pacific & Middle East
Asia Pacific & Middle East APLNG at Curtis Island What to Watch in 2014 Gumusut first oil expected 2Q14; KBB on target for first gas in late 2014 Progressing APLNG project with first LNG expected mid-2015 Continuing appraisal offshore Australia Expect to begin drilling in Palangkaraya in lat
Slide 17: Diverse Unconventional and Conventional Exploration Portfolio
Diverse Unconventional and Conventional Exploration Portfolio 17
Slide 18: Exploration Catalysts in Deepwater GOM
Exploration Catalysts in Deepwater GOM 2013 Gulf of Mexico Exploration Three deepwater successes announced Shenandoah appraisal well discovery >1,000 feet net pay Coronado wildcat discovery >400 feet net pay Gila wildcat discovery Successfully acquired additional Coronado prospective acrea
Slide 19: 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 20: 2014: Set for Growth
2014: Set for Growth Operational Financial Strategic Continued ramp up Ongoing margin Focus on executing of unconventional improvement our current plan drilling programs Growth from major Focus on improving Positioning for projects financial returns long-term success Exploration Comm
Slide 21: 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. 21
Slide 22: Supplemental Slides
ConocoPhillips Supplemental Slides
Slide 23: 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 24: 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 Central ~1 MM net acres; 0.8 BBOE resource HOWARD Platform Basin Infill drilling and waterflood expansion LOV
Slide 25: 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 620 M net acres1; 0.6 BBOE resource ROOSEVELT Anticline RICHLAND >1,400 identified drilling locations MCKENZIE Top-quartile initia
Slide 26: 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 221 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 27: 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. 27
Slide 28: 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 29: 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 30: 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; started production in 4Q13 High-value exploration opportunities can be tested from Jasmine platform Additional projects inclu
Slide 31: 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 32: 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 SNP first oil achieved in 1Q14; Gumusut FPS startup expected in 2Q14 Additional growth potential in Pisagan, Ubah, COP Acreage
Slide 33: 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 as of February 2013 2017 C
Slide 34: 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 35: Appendix
ConocoPhillips Appendix
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
Slide 37: 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 38: Top-Tier Oil Sands Position with Massive Resource Base
Top-Tier Oil Sands Position with Massive Resource Base Oil Sands Competitive Resource Cumulative Steam-to-Oil Ratio1 Project Schedule More than 1 MM net acres Top-quartile average steam-to-oil ratio 2 Resource: ~15 BBOE 2nd largest steam-assisted gravity drainage (SAGD) producer 6 major pr
Slide 39: 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 40: 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 600,000 net acres Acreage covered by 3-D seismic survey, COP Acreage prospects identified Drilling expec
Slide 41: Segment Production (MBOED)
Segment Production (MBOED) * Reflects production from 2012-2013 closed and announced dispositions. 41
Slide 42: 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 43: Non-GAAP Reconciliations
Non-GAAP Reconciliations Cash Margin per BOE Price Normalized Cash Margin per BOE 2 Operating Segments Operating Segments 2012 2013 2012 2013 FY FY FY FY $ Millions, except per BOE amounts Cash Margin 14,328 15,650 Net Income Attributable to ConocoPhillips 8,428 9,156 Price adjustment (using publish
Slide 44: 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 45: 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