ConocoPhillips (NYSE: COP) announced today that it is taking
further actions to respond to the oil market downturn. These follow
initial actions announced on March 18.
“In March we exercised $2.2 billion of flexibility via
reductions in both our planned 2020 capital spending and share
repurchases,” said Ryan Lance, chairman and chief executive
officer. “At that time, we stated we would continue to monitor the
market and exercise additional flexibility, if warranted. Today we
are announcing further capital, operating cost and share repurchase
reductions of $3 billion. We also announced our intention to defer
production where we have a compelling economic reason to do so.
These actions reflect our view that near-term oil prices will
remain weak, largely due to demand impacts from COVID-19 and
continued oil oversupply. We are well-positioned with flexibility
to take actions that we believe maintain our relative competitive
advantages, as well as our ability to resume programs depending on
the timing and path of a recovery.”
Today’s announced actions include:
- An additional reduction in 2020 operating plan capital
expenditures of $1.6 billion, bringing the current estimate to $4.3
billion. Including our previously announced reduction of $0.7
billion, this represents a total reduction in operating plan
capital expenditures of $2.3 billion, or approximately 35 percent,
compared to the 2020 announced guidance. These reductions are
sourced from across our global portfolio, primarily focused on
Lower 48, Alaska and Canada areas where we have the highest levels
of flexibility.
- A reduction in operating costs of approximately $0.6 billion,
representing roughly 10 percent of the initial 2020 guidance. This
brings the current estimate to $5.3 billion. These reductions were
sourced from lease operating expenses, general and administrative
costs and foreign exchange impacts.
- The company’s share repurchase program has been suspended.
- On a combined basis, the cumulative capital, operating cost and
share repurchase actions represent a reduction in 2020 cash uses of
over $5 billion versus original operating plan guidance.
- The company also announced it will elect to curtail production
in Canada and the Lower 48 regions until market conditions improve.
- At Surmont, the company is currently cutting back production
due to low Western Canada Select prices. By May, the company
expects to reduce production by approximately 100,000 barrels of
oil per day (BOD) gross to 35,000 BOD gross.
- In addition, beginning in May, the company plans to begin
curtailing production across its Lower 48 region. Initially, the
company expects to curtail about 125,000 BOD gross. Curtailment
decisions will be made on a month-to-month basis, and are subject
to operating agreements and contractual obligations.
- These announced curtailments represent approximately 200,000
barrels of oil equivalent per day (BOED) net to the company.
- Given ongoing uncertainty, continued market volatility and the
potential for both voluntary and involuntary curtailments over the
coming months, the company’s previous 2020 guidance items should
not be relied upon and further guidance will be suspended.
Lance continued, “Over the past few years we worked very hard to
position our company with significant flexibility across our
capital, operating, distribution and balance sheet channels. We
entered this downturn with several competitive advantages,
including a very strong balance sheet with over $14 billion of
liquidity, a diverse portfolio with low capital intensity, and
significant financial and operating flexibility. We believe this
puts us in an advantaged position to take rational, economic
actions, including voluntary curtailments that align with reasoned
views of the market. With today’s actions we have exercised a total
of over $5 billion of flexibility compared to our 2020 plan, while
retaining additional flexibility, if needed. We’re doing the right
things to protect shareholder value during this downturn, while
maintaining our ability to create long-term value for shareholders
when market conditions recover.”
“Importantly, I want to recognize our employees, contractors and
other stakeholders for their continued support,” Lance added. “The
combination of COVID-19 and the oil market downturn has been
difficult on industry and on stakeholders everywhere. As we manage
through this unprecedented event, ConocoPhillips’ priorities are to
protect the health and safety of our stakeholders, help mitigate
the spread of COVID-19, and safely execute our business plans.”
The company will host a webcast today, April 16, at 10:00 a.m.
Eastern time to discuss these actions. The company will not address
first-quarter 2020 results, which will be released on April 30. To
listen to today’s 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.
CAUTIONARY STATEMENT FOR THE PURPOSES
OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
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 the
impact of public health crises, such as pandemics (including
coronavirus (COVID-19)) and epidemics and any related company or
government policies and actions to protect the health and safety of
individuals or government policies or actions to maintain the
functioning of national or global economies and markets; global and
regional changes in the demand, supply, prices, differentials or
other market conditions affecting oil and gas and the resulting
company actions in response to such changes, including changes
resulting from the imposition or lifting of crude oil production
quotas or other actions that might be imposed by the Organization
of Petroleum Exporting Countries and other producing countries;
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.
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.
Use of Non-GAAP Financial Information and Other Terms –
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. In addition, this news
release may include other terms or measures, which are defined on
our website at www.conocophillips.com/nongaap.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200416005161/en/
John C. Roper (media) 281-293-1451
john.c.roper@conocophillips.com
Investor Relations 281-293-5000
investor.relations@conocophillips.com
ConocoPhillips (NYSE:COP)
Historical Stock Chart
From Mar 2024 to Apr 2024
ConocoPhillips (NYSE:COP)
Historical Stock Chart
From Apr 2023 to Apr 2024