ConocoPhillips is hosting an Analyst & Investor Meeting today to reaffirm its commitment to the disciplined, returns-focused strategy it launched in 2016. The company will outline the details of a 2020-2029 operating and financial plan, and will provide region and asset reviews of its global portfolio.
Highlights of the 10-year plan include:
- Free cash flow of approximately $50B based on a real West Texas Intermediate price of $50 per barrel and annual capital expenditures averaging less than $7B over the decade;
- A capital expenditures plan that reflects optimized pace of development within each asset, low capital intensity and overall low-declining base production;
- Currently announced and planned dispositions, as well as a future 25 percent dilution of company-operated Alaska assets consistent with the company’s historical practice of not funding major-project expenditures at 100 percent;
- Resource base of approximately 15 billion barrels of oil equivalent at less than $40 per barrel WTI average cost of supply;
- Forecast underlying compound annual production growth averaging over 3 percent;
- Projected ordinary dividends of approximately $20B, reflecting growth in the current dividend over the plan period;
- Projected $30B in share buybacks over the 10-year period, representing almost 50 percent of current market capitalization;
- Planned dividends and repurchases funded from free cash flow over life of the plan, representing a combined annual shareholder payout that exceeds our distribution target of more than 30 percent of cash from operations;
- Expected growth in return on capital employed of 1 to 2 percentage points annually; and
- Continued balance sheet strength with an expected leverage ratio of net debt to cash from operations of less than one.
“Over the past few years we have successfully transformed ConocoPhillips to position the company for consistent, predictable performance across the inevitable price cycles of our industry,” said Ryan Lance, chairman and chief executive officer. “We believe that we offer the market a compelling, long-term E&P investment that provides downside protection and full exposure to the upside. Today’s plan demonstrates sustained value creation through significant free cash flow generation, distinctive returns of capital and growing returns on capital.”
Lance continued, “We are committed to delivering superior returns to shareholders. Our plan provides a powerful, multi-year outlook that combines a robust, scenario-based strategy framework, a diverse, low cost of supply resource base, a disciplined, value-based investment approach and a world-class workforce. We believe we are unique in being able to offer this formula to the market.”
ConocoPhillips’ Analyst & Investor Meeting will begin at 8:00 a.m. Central time in Houston. A live webcast of the meeting and the slide deck will be available on the ConocoPhillips Investor Relations website, www.conocophillips.com/investor. The event will be archived and available for replay later in the day, with a transcript posted shortly afterward.
Headquartered in Houston, Texas, ConocoPhillips had operations and activities in 17 countries, $70B of total assets, and approximately 10,400 employees as of Sept. 30, 2019. Production excluding Libya averaged 1,310 MBOED for the nine months ended Sept. 30, 2019, and proved reserves were 5.3 BBOE as of Dec. 31, 2018. For more information, visit www.conocophillips.com.