Current COP Stock Info

200% disposition-adjusted reserve replacement ratio

ConocoPhillips (ticker: APC) announced full year results and reserves today, showing how the world’s largest independent dealt with the past year’s developments.

ConocoPhillips earned $1.6 billion in Q4 2017, or $1.32 per share, but reported a loss of $0.9 billion in 2017, ($0.70) per share for the full year. These results significantly exceed Q4 2016, when the company reported a loss of $35 million in Q4 and $3.6 billion for the full year.

ConocoPhillips Announces $5.5 Billion in 2018 Spend, $400 Million Alaska Acquisition

Source: ConocoPhillips Investor Presentation

ConocoPhillips reported 5,038 MMBOE of reserves, down from 6,424 MMBOE at year-end 2016. However, this decrease is entirely due to the company’s divestments in the year. The company sold $13.3 billion in Canadian assets in March, $3 billion in San Juan gas assets in April and $305 million in Barnett assets in June, so a decrease in reserves was unsurprising. The company reports that if divestments are excluded, it added a total of 1,036 MMBOE in the past year, 431 MMBOE of which was due to improving commodity prices. This works out to a 200% organic reserve replacement ratio.

ConocoPhillips Announces $5.5 Billion in 2018 Spend, $400 Million Alaska Acquisition

Source: ConocoPhillips Investor Presentation

20% lower 48 production growth expected

Conoco expects to spend $5.5 billion in 2018, to produce about 1,215 MBOEPD. Significant production growth in the Lower 48 is expected, with increases of more than 20% likely. The company plans first production from several projects, including Bohai Phase 3, Clair Ridge, Aasta Hansteen and GMT-1.

Conoco is also expanding its programs to return cash to shareholders. The company increased its quarterly dividend by 7.5%, to 28.5 cents per share, and expanded its previously announced 2018 share repurchase program by 33%, from $1.5 billion to $2 billion.

1.2 million-acre Alaska acquisition consolidates acreage

ConocoPhillips also announced a $400 million bolt-on acquisition in Alaska from Anadarko (ticker: APC). Conoco will acquire Anadarko’s 22% nonoperated interest in the Western North Slope of Alaska, and its interest in the Alpine pipeline. The gross daily production from these assets was 63 MBOEPD. Conoco will also hold a 100% interest in about 1.2 million acres of exploration and development lands, including the Willow discovery.

Announced in early January 2017, the Willow discovery is a promising oil project. Conoco reports the play could produce up to 100 MBOPD and could begin production as early as 2023, with total recoverable resource upwards of 300 MMBO.


Legal Notice