ConocoPhillips (NYSE: COP) announced today that it is taking
several actions in response to the recent oil market downturn.
“Our industry is clearly experiencing an unprecedented event
brought about by simultaneous supply and demand shocks,” said Ryan
Lance, chairman and chief executive officer. “The actions we are
now taking reflect an acknowledgement of current events as well as
uncertainty around the timing and path of a recovery.”
Lance continued, “We believe we have a significant advantage
compared to most of the industry through our strong balance sheet,
diverse and low-decline portfolio, and low capital intensity. We
ended 2019 with over $14 billion of liquidity, including cash, cash
equivalents, short-term investments and availability under our
revolving credit facility. We continue to monitor market conditions
and consider various scenarios to inform any future actions. We
have a significant level of flexibility between our capital,
operating costs, and share repurchase program, but we are choosing
to exercise only a portion of it at this time. We believe that the
highest-value longer-term response is price-path dependent.”
The actions the company announced include:
- 2020 operating plan capital expenditures will be reduced by
$0.7 billion, representing about a 10 percent decrease from the
previously announced guidance. The reduction will be sourced by
slowing operated development activity in the Lower 48, expected
decreases in non-operated activity in the Lower 48, and deferred
drilling in Alaska. These reductions are expected to impact 2020
full-year production guidance by approximately 20 thousand barrels
of oil equivalent per day (MBOED).
- The 2020 planned share repurchase program will be reduced to a
quarterly run rate of $250 million beginning in the second quarter,
from the previous run rate of $750 million.
- On a combined basis, the capital and share repurchase actions
represent a reduction in 2020 cash uses of $2.2 billion, with
limited impact to the company’s productive capacity.
- The company continues to review its capital and operating plans
and will provide a full 2020 guidance update in conjunction with
first-quarter earnings on April 30.
“Today’s circumstances require action and we believe we’re
taking the right steps at the right time,” Lance continued.
“Current conditions represent a significant challenge for our
industry overall, but we remain focused on creating long-term
value, especially through cycles.”
The company will host a webcast today, March 18, at 10:00 a.m.
Eastern time to discuss these actions. To listen to the webcast,
visit ConocoPhillips’ Investor Relations site,
www.conocophillips.com/investor and click on the "Register" link in
the Investor Presentations section. You should register at least 15
minutes prior to the start of the webcast. The event will be
archived and available for replay the same day, with a transcript
available later.
About ConocoPhillips
Headquartered in Houston, Texas, ConocoPhillips had operations
and activities in 17 countries, $71 billion of total assets, and
approximately 10,400 employees as of Dec. 31, 2019. Production
excluding Libya averaged 1,305 MBOED for 2019, and proved reserves
were 5.3 BBOE as of Dec. 31, 2019. For more information, go to
www.conocophillips.com.
This news release contains forward-looking statements as defined
under the federal securities laws. Forward-looking statements
relate to future events and anticipated results of operations,
business strategies, and other aspects of our operations or
operating results. Words and phrases such as "anticipate,"
"estimate," "believe," “budget,” "continue," "could," "intend,"
"may," "plan," "potential," "predict," “seek,” "should," "will,"
“would,” "expect," "objective," "projection," "forecast," "goal,"
"guidance," "outlook," "effort," "target" and other similar words
can be used to identify forward-looking statements. However, the
absence of these words does not mean that the statements are not
forward-looking. Where, in any forward-looking statement, the
company expresses an expectation or belief as to future results,
such expectation or belief is expressed in good faith and believed
to be reasonable at the time such forward-looking statement is
made. However, these statements are not guarantees of future
performance and involve certain risks, uncertainties and other
factors beyond our control. Therefore, actual outcomes and results
may differ materially from what is expressed or forecast in the
forward-looking statements. Factors that could cause actual results
or events to differ materially from what is presented include
global and regional changes in the demand, supply, prices,
differentials or other market conditions affecting oil and gas;
changes in commodity prices; changes in expected levels of oil and
gas reserves or production; operating hazards, drilling risks,
unsuccessful exploratory activities; unexpected cost increases or
technical difficulties in constructing, maintaining, or modifying
company facilities; legislative and regulatory initiatives
addressing global climate change or other environmental concerns;
investment in and development of competing or alternative energy
sources; disruptions or interruptions impacting the transportation
for our oil and gas production; international monetary conditions
and exchange rate fluctuations; changes in international trade
relationships, including the imposition of trade restrictions or
tariffs on any materials or products (such as aluminum and steel)
used in the operation of our business; our ability to collect
payments when due under our settlement agreement with PDVSA; our
ability to collect payments from the government of Venezuela as
ordered by the ICSID; our ability to liquidate the common stock
issued to us by Cenovus Energy Inc. at prices we deem acceptable,
or at all; our ability to complete our announced dispositions or
acquisitions on the timeline currently anticipated, if at all; the
possibility that regulatory approvals for our announced
dispositions or acquisitions will not be received on a timely
basis, if at all, or that such approvals may require modification
to the terms of our announced dispositions, acquisitions or our
remaining business; business disruptions during or following our
announced dispositions or acquisitions, including the diversion of
management time and attention; the ability to deploy net proceeds
from our announced dispositions in the manner and timeframe we
currently anticipate, if at all; potential liability for remedial
actions under existing or future environmental regulations;
potential liability resulting from pending or future litigation;
the impact of competition and consolidation in the oil and gas
industry; limited access to capital or significantly higher cost of
capital related to illiquidity or uncertainty in the domestic or
international financial markets; general domestic and international
economic and political conditions; changes in fiscal regime or tax,
environmental and other laws applicable to our business; and
disruptions resulting from extraordinary weather events, civil
unrest, war, terrorism or a cyber attack; and other economic,
business, competitive and/or regulatory factors affecting our
business generally as set forth in our filings with the Securities
and Exchange Commission. Unless legally required, ConocoPhillips
expressly disclaims any obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Use of Non-GAAP Financial Information – This news release may
include non-GAAP financial measures, which help facilitate
comparison of company operating performance across periods and with
peer companies. Any non-GAAP measures included herein will be
accompanied by a reconciliation to the nearest corresponding GAAP
measure either within the news release or on our website at
www.conocophillips.com/nongaap.
Cautionary Note to U.S. Investors – The SEC permits oil and gas
companies, in their filings with the SEC, to disclose only proved,
probable and possible reserves. We may use the term "resource" in
this news release that the SEC’s guidelines prohibit us from
including in filings with the SEC. U.S. investors are urged to
consider closely the oil and gas disclosures in our Form 10-K and
other reports and filings with the SEC. Copies are available from
the SEC and from the ConocoPhillips website.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200318005133/en/
John C. Roper (media) 281-293-1451
john.c.roper@conocophillips.com
Investor Relations 281-293-5000
investor.relations@conocophillips.com
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