November 11, 2016 - 8:16 AM EST
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Blog Coverage ConocoPhillips Primes for a Better 2017 Performance and Announces Asset Sale and Shares Buyback

Upcoming AWS Coverage on Occidental Petroleum Post-Earnings Results

LONDON, UK / ACCESSWIRE / November 11, 2016 / Active Wall St. blog coverage looks at the headline from ConocoPhillips (NYSE: COP) as the company announced revealed its ambitious plans at its Analysts and Investors meeting on November 10, 2016, aimed at better performance in 2017 given the volatility in the oil and gas prices. The company revealed its plans of reducing CAPEX spending, continuing with cost-cutting and reducing debt in 2017. Register with us now for your free membership and blog access at:

One of ConocoPhillips's competitors within the Independent Oil & Gas space, Occidental Petroleum Corp. (NYSE: OXY), reported its third quarter 2016 financial results on November 01, 2016. AWS will be initiating a research report on Occidental Petroleum in the coming days.

Today, AWS is promoting its blog coverage on COP; touching on OXY. Get all of our free blog coverage and more by clicking on the link below:

Commenting on the future, Ryan Lance, the company's chairman and chief executive officer said:

"We have positioned ConocoPhillips to deliver double-digit shareholder returns across a range of commodity prices through a combination of peer-leading shareholder distributions and high-return investments. These priorities include a debt target of $20 billion, a 20 to 30 percent payout of operating cash flows to shareholders, and modest production growth to drive margin and cash flow expansion. In setting out these priorities, our goal is to have strong resilience to low commodity prices with the ability to capture upside during periods of higher prices."

Synopsis of the detailed plans

Program to sell assets in the range of $5 billion – $8 billion

ConocoPhillips plans to sell of its natural gas assets worth $5 billion - $8 billion in the North America. The planned assets sale will be done annually in phases from 2017-2018. The assets sale will be done in a manner that the portfolio of product mixes that can deliver higher returns at lower costs of supply. Over the last few years, ConocoPhillips has reduced its geographical presence from 28 locations to 14 locations currently. Since 2012 till date ConocoPhillips has raised $16 billion by way of asset sales. Funds from assets sales will be used to pay off debt and reinvested in the company. These measures will lead to a stronger balance sheet; investors will get better return on their investments by way of dividends and the increased cash flow will improve the credit rating of the company.

Program to buy back $3 billion of shares

The funds realized from the asset sales will be used for buy back of shares. The buyback would start in the current quarter of 2016 itself. If the Houston, Texas based company manages to raise any additional funds, it aims to accelerate the buyback of shares. Investment of capital will help in maintaining production as well as pay existing dividends. The buyback will also send a positive signal to investors with regards to the future stability and growth story of the company.

Strategy for growth and guidance for FY2017

The aim for ConocoPhillips for 2017 is to survive and succeed in the current volatile oil and gas markets. To reach its goal the company has revealed its action plan for the year ahead, which includes reducing CAPEX spending, cost-cutting, and debt reduction.

The company expects that Brent oil prices in the times ahead would be approximately $50 per barrel. The company aims at reducing its debt of $20 billion by end of 2019. The company aims to reduce its CAPEX spending by 4% to $5 billion in FY17. The focus of spending in the year 2017 will be on the programs identified at Lower 48, conventional projects in Europe, Asia/Pacific, and Alaska. The spending includes the costs of maintenance of these asset bases. ConocoPhillips has also made a provision for spending on exploration activities to the tune of $ 0.6 billion.

Production for the year 2017 would be between 1540 – 1570 thousand barrels of oil equivalent (MBOED). This represents a 2% growth when compared to the FY16 production of approximately 1,540 MBOED.

CEO Ryan Lance, since joining the company back in 2012, has been working very hard at reducing ConocoPhillips' debts and keeping the company profitable in challenging times. On October 28, 2016, ConocoPhillips had announced the completion of sales of its offshore exploration blocks located in the gulf of Senegal. The company had announced the sale of these assets in July 2016. The gains of the assets sales would reflect in Q4 2016 results.

Stock Performance

On Thursday, the stock closed the trading session at $44.78, declining 2.08% from its previous closing price of $45.73. A total volume of 11.18 million shares have exchanged hands, which was higher than the 3-month average volume of 7.98 million shares. ConocoPhillips' stock price advanced 3.61% in the last month, 8.87% in the past three months, and 5.92% in the previous six months. The stock currently has a market cap of $55.79 billion and has a dividend yield of 2.23%.

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Source: ACCESSWIRE Investor Awareness (November 11, 2016 - 8:16 AM EST)

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