Conocophillips · NYSE:COP
Conocophillips — Shareholder Meeting (May 2013)
29 slides from Conocophillips's shareholder meeting presentation, May 14, 2013
Slide 1: 2013 Annual Meeting of Stockholders
2013 Annual Meeting of STOCKHOLDERS May 14, 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: 2013 Annual Meeting of Stockholders - Ryan Lance, Chairman & CEO
2013 Annual Meeting of STOCKHOLDERS Ryan Lance, Chairman & CEO May 14, 2013
Slide 4: 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. 4
Slide 5: 2012: ConocoPhillips' First Year as an Independent E&P
2012: ConocoPhillips’ First Year as an Independent E&P Strategic Operational Financial Milestones Milestones Milestones Completed separation Met volume targets Maintained strong of downstream balance sheet Exclusive focus on Organic reserve Funded $8.4 B of E&P business replacement of 15
Slide 6: Continued Peer-Leading Shareholder Returns
Continued Peer-Leading Shareholder Returns Total Shareholder Return 2012 Performance 3-Year Annualized Performance (2010-2012) 20.3% 18.9% 16.0% 10.9% 9.1% 1.3% (5.0%) ConocoPhillips (including Phillips 66)* ConocoPhillips Peer Average S&P 500 Peers include: XOM, CVX, RDS, TOT, BP, BG, DVN, APA, APC
Slide 7: Looking Ahead: Navigating an Uncertain Environment
Looking Ahead: Navigating an Uncertain Environment Brent ($/bbl) Wide range of views on oil prices Higher case: geopolitical supply risks; rise of global middle class Lower case: OECD economies; growth from shale plays WTI ($/bbl) Temporary market dislocations WCS North American NGL Mo
Slide 8: 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 Rebal
Slide 9: ConocoPhillips: Unmatched as an Independent E&P Today
ConocoPhillips: Unmatched as an Independent E&P Today Production: 1,485-1,520 MBOED1 (2013e) Largest independent E&P company Liquids 26% LNG + International Gas Diverse asset base with scope and scale 19% 55% North American Gas Multiple sources of growth Positioned in key resource trends glo
Slide 10: 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. 10
Slide 11: How We Will Execute
How We Will Execute Integrated approach to optimize Safety Performance base production and deliver Total Recordable Rate 0.8 growth: Safety performance 0.6 Operations excellence Technology development and implementation 0.4 Major projects functional excellence 0.2 0.0 2008 2009 2010 2011 2
Slide 12: Environmental and Social Performance Creates Value
Environmental and Social Performance Creates Value Keys to successful execution: Flawless environmental performance Dunes Sagebrush Lizard Conservation Proactive stakeholder engagement Integrated sustainable development Photo by Michael Hill Eagle Ford Water Oil Sands Technology to Reduce GH
Slide 13: 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 4.4% returns Differential compared to range of peers Target consistent increases Integrateds Independents 1 Dividend yield
Slide 14: 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 2017+ Appraisal growth 1.6 Major Projects * Major Generates Major strong 1.4 30% Projects Projects production Development Programs growth 1.2 1.0 0.8 Devel
Slide 15: 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 Production and Margin Growth1 250 2012-2017 Oil Sands 200 L48 Liquids Europe 2012-2017 – MBOED
Slide 16: Focused on Continuously Improving Returns
Focused on Continuously Improving Returns 2012 ROCE Compared to Independent E&Ps Ongoing focus on cost structure and efficiency 11% 11% Asset divestitures improve portfolio returns Short-term returns impacted by capital investments in major projects High-margin growth improves long-term retu
Slide 17: 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 Low declines in high-margin oil and high-liquid yield legacy assets Higher declines in low-margin, dry gas assets Develop
Slide 18: 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 600 Other North Alaska Europe America ~35 MBOED Canada Unconventional 500 ~40 MBO
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 450 Oil Sands Norway 400 ~100 MBOED1 ~60 MBOED 350 Other 300 United Kingdom Other Major Proj
Slide 20: Diverse Unconventional and Conventional Exploration Portfolio
Diverse Unconventional and Conventional Exploration Portfolio Chukchi Sea West Duvernay, Greenland Barents Sea & Muskwa, North Sea Montney & Canol Poland Wolfcamp, Sichuan Niobrara & Gulf of Avalon Mexico Azerbaijan Bangladesh Colombia Indonesia Malaysia Angola Browse & Bonaparte Canning 20
Slide 21: Deepwater Gulf of Mexico: Encouraging Results with Running Room
Deepwater Gulf of Mexico: Encouraging Results with Running Room Gulf of Mexico Two significant discoveries announced Shenandoah appraisal well discovery >1,000 Garden Banks Area feet net pay Coronado wildcat discovery >400 feet net pay Green Canyon Successful lease sale adds prospective Area
Slide 22: Substantial Progress on Portfolio High-Grading
Substantial Progress on Portfolio High-Grading Significant Asset Dispositions Continuous process of portfolio Status Asset Proceeds enhancement Lukoil shares Syncrude Asset sale criteria Closed (2010-Q1 2013) Vietnam $20.2B Nonstrategic Cedar Creek Mature, limited growth potential
Slide 23: Balance Sheet Strength Provides Flexibility
Balance Sheet Strength Provides Flexibility $5.4 B total cash at end of Q1 2013 Year-End 2012 Debt-to-Capital Ratio $8.5 B of announced proceeds from asset sales in remainder of 2013 31% A1/A rating reflects substantial financial flexibility Growing cash flow creates incremental debt capacit
Slide 24: What Will We Deliver?
What Will We Deliver? Relentless focus on safety and execution Compelling dividend 3 – 5% production growth rate 3 – 5% margin growth rate Ongoing priority to improve financial returns Production and margin reflect compound annual growth rates. 24
Slide 25: 2013 - 2014: Significant Inflection Point
2013 - 2014: Significant Inflection Point Strategic Operational Financial Delivering on value Significant inflection Maintain strong proposition point balance sheet Complete announced Visible results from Demonstrate margin asset sales exploration programs improvement Dividend remains
Slide 26: Committed to SPIRIT Values
Committed to SPIRIT Values 26
Slide 27: 2013 Annual Meeting of Stockholders
2013 Annual Meeting of STOCKHOLDERS May 14, 2013
Slide 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations Return on Capital Employed 2012 Numerator ($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 29: Five-Year Cumulative Total Stockholder Returns
Five-Year Cumulative Total Stockholder Returns 110 100 90 80 70 60 50 Initial 2008 2009 2010 2011 2012 ConocoPhillips Prior Peer Index New Peer Index S&P 500 FIVE YEARS ENDED DECEMBER 31, 2012 December 31 Initial 2008 2009 2010 2011 2012 ConocoPhillips $ 100.0 $ 60.2 $ 62.0 $ 86.0 $ 95.5 $ 104.2 Pri