ConocoPhillips · NYSE:COP
ConocoPhillips — Citi Global Energy Conference 2014
34 slides from ConocoPhillips's conference presentation, May 14, 2014
Slide 1: Citi Global Energy Conference
CITI GLOBAL ENERGY CONFERENCE Ryan Lance, Chairman and CEO May 14, 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: Our Objective is to Deliver Double-Digit Returns to Shareholders
Our Objective is to Deliver Double-Digit Returns to Shareholders We offer the marketplace an E&P investment that delivers sustainable double-digit returns annually to shareholders through cash flow growth and a compelling dividend. 3
Slide 4: Our Value Proposition is Unchanged
Our Value Proposition is Unchanged • 3 – 5% production growth rate • 3 – 5% margin growth rate • Compelling dividend • Ongoing priority to improve financial returns • Relentless focus on safety and execution Production and cash margin reflect compound annual growth rates. 4
Slide 5: Unmatched Position Today
Unmatched Position Today 1,530 MBOED Production1 – 1Q14 North Liquids • Diversified asset base with scope and scale American 24% Gas • Multiple sources of growth LNG + 58% International 18% • Massive positions in key resource trends Gas • Growing portfolio with options and choices 8.9 BBOE Reserves
Slide 6: 2014: Set for Growth
2014: Set for Growth Average Capital • Significant shift in capital toward development ~$16B programs Exploration & Exploration & Appraisal Appraisal • 2013: 1,472 MBOED1 is base for growth Major Projects • 2014: Expect 3-5% production growth Major Projects • Range of 1,510-1,550 MBOED • Expect to e
Slide 7: Capital Allocation Drives Profitable Growth
Capital Allocation Drives Profitable Growth Average Capital Production1 ~$16B 2.0 100% 1.8 90% North American 1.6 >$40/BOE 80% Margin Unconventional 45% of Capital 1.4 70% 1.2 LNG MMBOED 60% Oil Sands 1.0 50% International 0.8 40% Oil & Gas $30-$40/BOE Margin 0.6 50%30%of Capital 20% North American
Slide 8: High-Margin Production Growth Drives Cash Margin Improvement
High-Margin Production Growth Drives Cash Margin Improvement 2017 Production1 Cash Margin Production CAGR1 $/BOE 2013-2017 North American 2013 Production1 North American Unconventional >40 ~22% Unconventional North American Unconventional LNG >40 ~10% LNG Oil Sands Oil Sands 30-40 ~21% North America
Slide 9: High-Margin Growth Generates Long-Term Cash Flow Improvements
High-Margin Growth Generates Long-Term Cash Flow Improvements Cash From Continuing Operations¹ • Continued cash margin growth in 2014+ $B • Ongoing production mix shift • Increased production in areas with more favorable fiscal regimes • Declining production in North American natural gas fields $20-
Slide 10: Committed to Shareholder Returns
Committed to Shareholder Returns Dividend Yield • Compelling dividend remains key to our value proposition • Highest priority use of cash 3.7% • Enhances capital discipline • Predictable portion of shareholder returns • Differential to independent peers • Dividends expected to increase over time Int
Slide 11: The Power of Portfolio: Margins, Decline Rates and Returns
The Power of Portfolio: Margins, Decline Rates and Returns $10-15/BOE Margins $30-40/BOE Margins >$40/BOE Margins North American • Short-cycle cash flow High >25% Unconventionals • Avoid over capitalizing • Increases capital intensity of portfolio Full-Cycle Project Returns North American Convention
Slide 12: North American Unconventionals: Unmatched Portfolio and Capabilities
North American Unconventionals: Unmatched Portfolio and Capabilities Montney Duvernay • Great positions in proven and emerging plays • Eagle Ford and Bakken sweet spots Bakken • Exceptional growth in high-margin resource base Niobrara Anadarko Permian • Decades of drilling inventory with upside Barn
Slide 13: Eagle Ford: Significant Resource Increase
Eagle Ford: Significant Resource Increase • 221 M net acres; acreage capture complete • 96% average operated working interest • 1.8 BBOE to 2.5 BBOE net EUR increase • >3,000 identified drilling locations • Outlook based on 12-rig program • $20-25/BOE full-cycle F&D cost Average Production Product M
Slide 14: Eagle Ford: Premium Value from Best Wells in the Play
Eagle Ford: Premium Value from Best Wells in the Play 250 Highest Oil Rates per Well1 60 Industry-Leading Value2 50 200 Gross Operated Production (BPD) 40 NPV10 per Acre ($M) 150 30 100 20 50 10 0 0 Competitors Competitors 1Texas Railroad Commission, 2013. 2Wood Mackenzie. 14
Slide 15: Bakken: High-Margin Growth
Bakken: High-Margin Growth • 620 M net acres; mostly HBP or mineral fee • 45% average operated working interest • 600 MMBOE net EUR • >1,800 identified gross drilling locations • Outlook based on average 10-rig program • $20-25/BOE full-cycle F&D cost 1 Average Production Product Mix 100% Capital 90
Slide 16: Bakken: Advantaged Position in the Heart of the Trend
Bakken: Advantaged Position in the Heart of the Trend Montana North Dakota Bakken Acreage Values by Area (NPV10 per Acre)1 VALLEY ROOSEVELT WILLIAMS MOUNTRAIL Nesson Anticline Anticline Parshall-Sanish Fort Berthold Williams Core MCCONE Nesson West Nesson Anticline Northern Mountrail MCKENZIE Elm Co
Slide 17: Permian Unconventional: Early Appraisal Results Encouraging
Permian Unconventional: Early Appraisal Results Encouraging New Mexico Texas • 150 M net acres in Delaware Basin; 90 M net acres in Midland Basin Central Delaware Basin Platform Midland Basin • Thick column of both shale and tight rock intervals Basin • Four rigs running in Delaware Basin • 24 horiz
Slide 18: Niobrara: Early Appraisal Results Encouraging
Niobrara: Early Appraisal Results Encouraging ADAMS ADAMS • 130 M net acres in the DJ Basin DENVER • Appraisal program ongoing; 2 rigs running ARAPAHOE • 18 horizontal wells planned for 2014 ARAPAHOE • Optimization of drilling and completions design DOUGLAS ELBERT • Average early rates from new desi
Slide 19: LNG: Positioned in High-Margin Markets
LNG: Positioned in High-Margin Markets AKLNG • Oil-linked contracts; robust cash flows Kenai • Darwin and Qatar: High-liquids yield; premium markets • Kenai: Restarting for seasonal exports Qatar Darwin LNG • AKLNG: Studying feasibility of North Slope gas APLNG • APLNG: Project on schedule Average P
Slide 20: Oil Sands: Significant Growth from World Class SAGD Portfolio
Oil Sands: Significant Growth from World Class SAGD Portfolio Saleski Fort McMurray • Second largest net SAGD producer Surmont Thornbury Narrows • Top quartile steam-to-oil ratio Lake Crow Lake Christina Lake • Executing 7 major projects and 2 optimization projects McMillian Lake • 2017+ net cash fl
Slide 21: International Oil & Gas: Major Projects Driving Growth
International Oil & Gas: Major Projects Driving Growth Norway U.K. • Strong legacy positions • 130 MBOED major projects growth expected by 2017 Libya • 2013: Ekofisk South and Jasmine started on schedule China • 2014: 5 projects in Europe and Malaysia Malaysia Indonesia • 2015-2017: 7 projects expec
Slide 22: North American Conventional Oil: Protecting and Growing the Base
North American Conventional Oil: Protecting and Growing the Base • Development drilling and major projects in Alaska ALASKA • Infill drilling and waterflood expansion in the Permian • Drilling and expanded waterflood recovery at Ursa • Liquids-focused drilling in the Anadarko Basin • Technology and
Slide 23: 2014: Testing Global Portfolio
2014: Testing Global Portfolio Norway Greenland Barents Chukchi NPR-A Canol Montney, UK & Norway Duvernay Poland Baltic Basin Azerbaijan China Bohai Niobrara China Delaware & Sichuan Midland Gulf of Mexico Bangladesh Senegal Myanmar1 Malaysia Colombia Middle Magdalena Indonesia Bonaparte Angola Brow
Slide 24: Appraising Gulf of Mexico Discoveries
Appraising Gulf of Mexico Discoveries TEXAS LOUISIANA Tiber • 18% working interest • Lower Tertiary oil discovery in 2009 • Multiple reservoir intervals • Appraisal commenced in 2013; continues in 2014 Shenandoah Gila Tiber Coronado Shenandoah • 30% working interest ConocoPhillips Acreage • Lower Te
Slide 25: Angola: Deepwater Exploration
Angola: Deepwater Exploration Atlantic • Block 36: 50% working interest; operator Ocean Luanda • Block 37: 30% working interest; operator Block 36 Orca • Pre-salt lacustrine carbonate play in Kwanza Basin Lontra Kamoxi-1 Block 20 • Analogous to Brazilian Santos/Campos Basins and Mavinga Cameia-1 Cam
Slide 26: Key Messages
Key Messages • Value proposition unchanged • Growth underway in 2014 • Significant identified resource upside in unconventionals • Visible options and choices for organic growth beyond 2017 • Strategic linkage between capex, volume growth and margin expansion • Cash flow is growing, financial positi
Slide 27: Appendix
SAFETY ects ceatet ConocoPhillips echnolo North Sea oY REPUTATION set FOP Portoiic Optimization GROWTH. ENERGY ennen SPIRIT Values COLLABORATION Ekofisk South Appendix
Slide 28: Annualized Net Income Sensitivities
Annualized Net Income Sensitivities • Crude • Brent/ANS: $80-90MM change for $1/BBL change • WTI: $35-40MM change for $1/BBL change • WCS¹: $30-40MM change for $1/BBL change • North American NGL • Representative blend: $10-15MM change for $1/BBL change • Natural Gas • Henry Hub: $100-110MM change fo
Slide 29: 2014 Production Guidance: Continuing Operations
2014 Production Guidance: Continuing Operations Annual Planned Turnarounds Major Turnarounds 2Q14 • J-Area 3Q14 • Prudhoe Bay • Surmont • Britannia Area • East Irish Sea • Southern North Sea • Bayu-Undan 1Q14 2Q14 3Q14 4Q14 FY14 Continuing Operations 1,530 1,490 – 1,540 1,435 – 1,485 1,590 – 1,640 1
Slide 30: 2014 Outlook Guidance
2014 Outlook Guidance • 2014 DD&A of ~$8.5 B • Higher DD&A from Jasmine and Gumusut startup • Reflects reserve booking schedule in unconventionals • Expenses from continuing operations • Production and SG&A expense of ~$8.5B 1 • Exploration expense of ~$1.5B • Corporate segment costs of ~$950 MM 1In
Slide 31: Segment Production (MBOED)
Segment Production (MBOED) 250 Alaska 500 Canada 700 Lower 48 & Latin America 600 200 400 500 150 300 400 300 100 200 200 50 100 100 0 0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 500 250 Europe APME 5 Other International1 400 200 4 300 150 3 200 100 2 50 100 1 0 0
Slide 32: Margin Class Categorization
Margin Class Categorization North American International North American North American Unconventionals LNG Oil Sands Oil & Gas Conventional Oil Gas • Bakken • AKLNG • Christina Lake • China • Alaska North Slope • Lobo • Barnett • APLNG • Foster Creek • Indonesia • Anadarko • San Juan • Canada Unconv
Slide 33: Abbreviations and Glossary
Abbreviations and Glossary • 4-D: four dimensional • MM: million • ANS: Alaska North Slope • MBOED: thousands of barrels of oil equivalent per day • Average Cash Margin (2014-2017): Average cash margin represents the projected cash flow from operating activities, excluding working capital, divided •
Slide 34: Investor Information
Investor Information Stock Ticker Investor Relations Contacts: NYSE: COP Telephone: +1 281.207.1996 Website: www.conocophillips.com/investor Ellen DeSanctis: ellen.r.desanctis@conocophillips.com Sidney J. Bassett: sid.bassett@conocophillips.com Headquarters Vladimir R. dela Cruz: v.r.delacruz@conoco