COP - Earnings call transcript Q4 2018

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Operator

Welcome to the Fourth Quarter 2018 ConocoPhillips Earnings Conference Call. My name is Paulette, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note that this conference is being recorded. the and to Communications. turn President, DeSanctis, now Relations Investor will call Ellen over Vice I

You begin. may

Ellen DeSanctis

Thanks, Paulette, and us today. thanks to our listeners for joining

Don for deliver our to Q&A Executive Our Chairman President we're and President Ryan going be Officer. Vice your remarks, CFO; Wallette, Ryan to and Operating CEO; today will and Fox, speakers to Vice brief our make go Matt Lance, and questions. straight Chief time Executive some will and our then

of X page presentation on shown is statements cautionary today's Our materials.

We that's and with results comparisons financial in website. during And reconciliations on and to nearest filings. to in will provided We to morning, measures and measure described And corresponding I'll today's call future estimates to and some forward-looking non-GAAP non-GAAP the SEC make GAAP peers. statements due this then also factors periods that of finally, and release could the across call page our measures periodic over refer our plans. to turn we'll this Actual Ryan. our refer on now, our press some differ to the facilitate today,

Ryan Lance

I'll the this believe of business new one we mature, that's the for view XXXX today's but Thanks recap and in with proposition in, XXXX We've for we're Ellen, companies. to a order will a before on those our and manage this to want to moment, embraced our and the be company path I I In call. results of put welcome everyone capital intensive do, results, first a fact should cyclical. E&P that highlights, in context. business We're value

investors expects cycles E&P back approach new that attract doesn't sector. our repeats believe, returns change the mean and value it The that clearly behaviors what a change will we industry down. We in this Now in to order? and led can, or has business we that mean we've market the to spoken and the do by up proposition an

value absolutely resonating returns this supply. growth, now grown share generated returned We're more two to years in cash our overall price we business. chasing than achieved this. fundamentally while our kept Over we've We've our old, not simultaneously period, in our and the payout with growth our stronger. made a margin. the base, proposition and most of resource per sustaining value is flows the distinctive costs financing its competitive offer among encouraged lowering We've is sheet shareholders, and cost check clearly proposition Our competitive that driven of balance structured to lower

is For in commitment XXXX 'XX, worked us a in again that late XXXX. began the value proposition and a mindset worked and in

with that, with left, XXXX So priorities. strategy me column X. firm the slide on the held our our results on let summarize Starting we on

dividends our our flow. our in $XX of since dividend, to was but barrel $XX, billion CFO XX% over free didn't a on returned and of our this billion ago. with touched prices about our We late of just $X Brent change reduction over barrel. improvement a ROCE, year, XX% on capital this to funded organically years to billion was of But repurchased increased our ahead target generate approach Brent consistent achieve we authorization. we from We've All executed $X existing shares. and Including of XX few During XX.X%, priorities plan, return our buybacks, about and cash program owners. $XX months nearly we remaining billion when just our also debt $X buyback this began XXXX, our a that's allowed $XXX accelerated a our per employed us

and our short-term year we can means programs earnings, $XX.X cash the flow. review the execute with $X.X in to the and billion that effective sheet. on We cycles. of operations of $X.X have can, investments billion of through cash from ensure consistent balance an ended CapEx We billion our free cash and of adjusted $X.X To cash is billion buybacks

of executed Operationally, and by agencies. proud very And we position all adjusted billion, million basis. ICC a an per-debt We over performed. exited across execute, strong capital credit financial business about which start-ups way and underlying help safely a in in from production A of Lower rating the proceedings on PDVSA I'm major and rated strong to and our we three XXXX got we agreement award settlement our is regions. share our XX organization project We growth arbitration fully of XXXX. with XX% achieved recover recognized program Our performance our our of on $XXX achieved $X

appraisal Finally, exploring on we Austin to the and low program continuing our efforts significant acquisitions our our great and asset resource cost completed progressed Montney our and to supply began of made Canada on Alaska. in We our high- success play. We asset achieved new in progress Chalk base optimize add Louisiana value exploration portfolio.

grew and high We replacement total disposition grading reserves was The replacement was rate organic reserve XXXX. in billion portfolio and proceeds of Our oil year-end rate to about our we equivalent. XXX% preliminary billion $X.X $X.X reserve continued XXX%. generated barrels of

an for XX the supply roughly a in barrel. our of fuel success Our approach continued the of barrels less our base billion oil $XX cost of with to business. year-end average resource now than is This contains equivalent

a exceptional is what's was What is So in XXXX summary year XXXX. behind XXXX ConocoPhillips matters that's again, And But now segue for into us. next. . great another

So our offering prices. how we've higher while a December, we resilient prices, uncapped out overlooked sometimes that's and of laid We aspect in of the ConocoPhillips. both offense lower to virtually intentional and upsides and an play sustain an is to It's investors operating that This plan plan field, defense. positioned ends we believe can success. will

on operating XXXX slide. the summarized Our next is plan

of generation, investing upper XXXX the distinctive shareholders. our the to flow already a in sticking growth cash the production average value $X.X X% budget row. grow basis with consistent to $X and a we're This to You'll on of We've is proposition; elements per-debt year cash on dollar-cost in the billion, focus share flows see our XX% adjusted announced right third approach to plant free with billion repurchases. core discipline, our that and buybacks returns capital for on

GMT-X activity items In potentially campaign plans and drilled another advance Our even two pads. good milestones, drilling. impactful a of XXXX, exploration had appraisal exploration road and several we and conduct Alaska. operating quick are with page. began, XXXX make some this will construction from our December, before the I'll capital of ice existing on wells at season we In tour which of shown starting

is early completion in production And of expect EOR our potential Canada. Lower by pilots testing the swing of Vintage XX year on XX-well our techniques, and pad refracs. programs We're pilots as Big X, program in XX%. in activities Montney resource we enhancing the the part about full focusing X multi-well in Our to grow such

in in Asia, expect resource, to half opportunities Given strength to create to expect I Louisiana expansion page to year. already and to the the and North Chalk, and in we discussions major expect be ramped X Guidance this the year. including Qatar our supply started activities, and half results these low In Bohai the the Field in in of the the optionality on exploration Barrosa volumes in we four-well Big have first second And relatively have cost few China later a represent program and flat Austin in Australia. advance and our decisions projects Phase portfolio IV for in on this future. we've

retain flexibility we we will see opportunities, most from in invest we on projects. these results as these Importantly, when and how of

phase prioritize with in way to our proposition. us it's that You should a these expect and investments value aligned

we to of us. comprehensive, fronts, formula our years. execution. the and This reflects shareholders market we multi-year commitment our It's update the on We in update to priorities It's to we're providing We're our with by and to of cycles, our a superior it. returns a come another you to anticipate As and underpinned long-term results believe is delivering expect year the year through across what we plays on you've XXXX for many strong way. for plan focused sticking value formula operating from growing out, consistent each works believe November. excited and will out get these our the to

that, the with your to over me questions. call So let turn

Operator

Thank you.

session. ahead. will go Instructions]. Barclays. And begin first [Operator now our the question-and-answer question Please Cheng from We Paul comes from

Paul Cheng

morning. good guys, Hi

Ryan Lance

Good morning, Paul.

Paul Cheng

see get Ryan, one there, that can kind I running are at what probably, peak planned. any program once to and second two like whether is get there, still curious you have those APLNG? knew it going the you know real sustain there how receive you you Is payment in whether, get can I on and from Bakken plateau just seems you long fast need sustain can business, than And oh, basins? today And of to once one Ford way it you I Eagle you this question production? is Based that the that, that actually, you what saying room on on and short less how I presume. what don't would you rig you in in that be and

Ryan Lance

extra completions And and Don as a grow Yes, provide we you continue we continuing color. find XXXX say there about little continue of similar Paul technologies bit We our to go outperformed for at plateau would what But year new opportunities had outstanding in Eagle well. Matt that we little And the marketplace opportunity. opportunities Vintage could color of APLNG Matt a Bakken bit some the approaches. bit We in a and reached maybe lowering to I that can to an the forward. there. let suggested cost to see is I think X we into some can as high and and testing question supply a new XXXX. level, fact we probably in and and me, just talked little Ford. see cover

Matt Fox

to decade, rigs two that we've Bakken maybe if Eagle a rig drilling would and reach now. we'd some in activity. to from the rig and those we completion Permian. year Yes. and thought ultimately just rigs had were in plateau ratio we the our we at at three said, be for of Ford we completions We a Paul, Eagle Ford. the They, but well Ryan continuously, we'd rigs Bakken In grow crews. the run those But were hold at more we, a dropped to two in running Ford beginning the we in results And in levels the had there improved the able sort decades. the as partner-operated plateau, are over our to plateau Eagle and we of of running actually optimize continuing we're six be

decade a and before now be we And we're course, it sustained rate we're Permian, at to so, that's of in then rate a cycle higher of than more. probably the early growth And ahead so years can reaches very that plateau. the close several for it in life and there, that of anticipated

Paul Cheng

have me don't mind for do also production in is the add Ford you Matt, that a the you that if for guys Big maybe the where you you number Eagle on might guys? in X And plateau number quarter? give the

Matt Fox

number as we're because rig we, the have Yes, a rigs plateau of share we ready that no, to the we long number a run don't term. over function, that on the

about, as will count, And designs. NPV of we these is infrastructure this course the the we optimize our of what do, learn all costs. to is be, So we trying rig optimize all in that maximizing more new are that completion of them the of so place

view For that example Ford we change that. Eagle how may in

there. premature to it's So go

my In I Big just we, I list, now, in you X of for we can give get them here the don't yes, top quarter, head those for have off the the the terms you. rates can fourth

Paul Cheng

you. thank Okay,

Ellen DeSanctis

Paul, I'll moment. come answer back to to Ryan want in a the...?

Ryan Lance

respect APLNG to with the sure you're I'm Paul, payments, Yes. referring distribution. to

APLNG of look $XXX half we probably from first million in you'll $XXX similar had we and that's guided million recall, a and a and larger the we that fourth in the believe of the I the a second of the reflection first So $XXX three quarter prices that half to XXXX, total had I distributions a would had probably high half. the payment but really mostly of with months number million, distribution of things, lag. ended LNG dividend in realizations, up on

So LNG reflect third or oil really quarter fourth prices. pricing quarter realizations

of the made project and at on both revenues on APLNG good on course, good and reducing on progress they've opportunities costs, operating refinancing the side really financing. So

that a $XX year, the of actual around then know expectations going distributions Brent to $XXX they I that because XXXX I during million you'll if for I'm $XXX forward, in pick While a much curious range. be got about and course. to realizations you've influenced But say million here, be I'd to by say would price be to it looking expect probably very point is the

Matt Fox

And in XXX for in I rates and Eagle Permian. was have the average the It quarter Paul, and Bakken XX Big the the fourth X. the Ford, XXX

Operator

from And from our Evercore Terreson next question ISI. ahead. Doug comes go Please

Doug Terreson

your everybody. results. on Congratulations Hi,

Ryan Lance

Doug. Thanks,

Matt Fox

Doug. you, Thank

Doug Terreson

I have financial, today. a and strategic a question

capital U.S. point, on the to on gas the else some improvements? dynamic, drivers in to is this improvement of or guys it business. color meaning, technology, after rising color in for on the and oil costs appears return some something First, you this gains changes want even and driving provide in efficiency, I could is it this this it So is these capital area. prices, see especially on normalizing if And be just

Don Wallette

above. say Don. Well, I the Doug, this of yes, it's all is would

last transformation the efficient, now, a of more returns and to disciplined, greater on you look the focus at in we've years, three of less undergone more course. certainly If the two that capital priority

And back and the a price. our so, lot you sustaining of of changes cost done can lower that portfolio supply our to to go we've

in think taking capital our think to on the believe, operating like costs, just I from $XX to efficiency I down billion, billion. debt these current $X of $XX we're around down things, It's billion fronts. billion all the $X from reducing level all and I XXXX

Doug Terreson

stock often also plan your and you S&P implemented ago. value new and results the years the industry success often Simultaneously, your this which shareholders two past you've drift in then that strategically, served And Okay. since COP Energy mission pledge obviously has with has strategic Ryan, been proposition, best order that to companies in reiterated in activity.

E&P and fallen areas wanted if quarter guys valuations are I interest, were couple why over you the most were how cost of strategic years to and activity while and were about and about pretty market, capital there the have or doing past are a in days acquisitions negatively what So done at therefore thinking further half see of these they? of

Ryan Lance

I would and up it $XX us, Yes, lot chance about of appreciate, of gives our us smaller-scale quite strategic pretty in that the everybody and and couple the balance like been since over a half the Really strategic adding M&A advantage billion Doug, acreage do went we a Alaska. have side. half in shareholders it's and that went portfolio involved competitive some last we've spin clear the also deliberate the get I a questions. with and of deals choices about little year it's to a been been the debt where of articulate we opportunities Austin reduce asset the Chalk bit space side company, of and of we the in like views acquisitions sheet. sort in to remind the for the on and also did But we more have years think Montney we the on last disposition

our think So operating and diversity, cost. when debt about asset we that, resource we quality consider

in, we four high those XX think good portfolio low the our base and it's it's about It's diverse, that's cost shape, around portfolio, pretty So weighted. adding is do categories Brent resource but deep, in barrels billion add material. we of

That's we not has in are out be in anything. It portfolio. the any So to company. we feeling pressure substitutive where to of stand value-adding do and kind the just

that things a perspective. you it's the we And to like should strengthening allocation, reaction it. disciplined consider, result pointed our timing, investors the oil consolidation think on find sector, to capital the the synergies, within into what consider you a sector broadly help growth sectors. that basis, back and valuation slower When ultimately Now on in and I tough have out, more value market prices you

are low there's synergies. the acreage of sell premium companies it. not than pure out is to in to If have valuation acquisition you like unless extremely typically built touched just issue slow capital you tough to just, any tough They are many been program to rate of at disciplined on realize going point that obviously of we the reaction? Board tough a growth growth equity it private usually to you adjacent down then plays allocation reluctant the you infrastructure, and to And on Synergies, do as with rooms the to are implement what's cycle, there. have top is you that place, go not target some and you us then their the market shares, a for pay at, but look need has something. to into have good. really well, that That difficult. the Timing makes rate and It

been overpaid. have punished be to they So because people seem

So, which and where competitive takes opportunities, got to we the be like at real looked like we see but it, what We of good we we, all it's understand fit, it, we shareholder capital. we a in we it a it, might special pay watch what use attention to portfolio. to the feel in a deal

Doug Terreson

comprehensive the answer, for Ryan. Thanks

Operator

JPMorgan. comes Gresh Please Our from next from ahead. go question Phil

Phil Gresh

Hi. Good morning.

Don. I be question, First guess would for

$XX obviously, You're over so have more in upside of gross billion debt provides now target, is case, in but that at of terms cash, the in down take today but cash. of net a your price Wondering thinking be you're about $X it you a to price downside an how gross billion more you'd below $X case, lot flexibility your debt you building even willingness or, debt billion.

you with that? are what you thinking how do to about So want

Don Wallette

Yes.

we and as gross structure we're were as I far company far same of think debt. place as still Phil, as capital at the the

not balance to really sheet debt. reduce the contemplating we're further So, anything

on keep as one-time capital maintain of number base a on to would the that's that. in things. opportunities, high we opportunity buybacks, and to and programs around to far that and the is going obviously, that and expansion this come being able strategy kind to are and reasons of all deals a program so as withstand of the our cycles to levels a potential positive question far volatile able as of is strategic the But cash price think price advantage part more as cash of and being environment, of speak levels gives investments steady run of us why take the I pace fronts maybe utilization-type cash, forth, Qatar

it So refund those kind can potential forward. some opportunities help of of going

Ryan Lance

our it's panicking not in Phil, I'd crude month pocket remind a so people Yes, $XX prices. with everybody than burning ago, were a hole say, less and

we're staying program So said, the doing on the and the priorities. that, consistency we're invested follow not that our allows both Don our cycles and with as through with, buybacks the capital

Phil Gresh

the the Yes. That guess, asked Don. be most level I the I've of is feel spending about lot questions, ConocoPhillips getting And last is to makes like forward. your of been your, one comment to there, there of follow-up sense. I moving might capital frequently

there, could guys a or have any not in be forward? you spending You Barossa I for color would realize you while, include give going that it to levels but well Analyst you be think an about you're could might or moving think needed Qatar include so. to Day do the How be capital able a of helpful. I might

Ryan Lance

Yes, Phil.

the about Field transparent we will think this in opportunities update I of but gotten of in in let may want resolves, numbers appreciate the Let terms new going pretty to mentioned field, know take it. some market them. that questions you that probably I in North Yes, Qatar. you a asking not going the we're the we've provide fair been forward, expansion one you me, about about absolute if the clarity of number on. we've I

in show have in higher tried base just the way some reviewed impact we your remarks those I my XXXX. prepared we under activities So to beyond programs. of

it, not we uncertainties and of projects the I'd many reputation, in and of tell time. when all past go I Now resolve and year. if discussion Then to we'll flexibility think you course invest face the what over the of lot about our activity how a and the of we really those of retaining the we in to the investments those projects stock and as take from capital we've might we expect most But of intentional have through been opportunities.

as in think high pretty a I portfolio, assets also they disbursing of graded. another had that track don't we've successful of flexibility means And well. provides are that the compete record

So focus really that higher returns proposition while free our including we're highest our goal cash a our committed the flow. to create to is to on shareholders, preserving

So and thoughtful those that be future according premises. means setting be about plans we'll our to setting kinds of

that are lay we'll lot going out again, in not by to later our then you more We're lose ourselves. and November. way a in So, detail

Phil Gresh

Ryan. thanks Okay,

Operator

from ahead. go Doug Our of Bank Merrill next question from Lynch. America comes Leggate Please

Doug Leggate

Thanks. terms Good the set everybody. the morning, of Ryan, for high guys in discipline. industry pretty you have capital bar

the you when longer-term confines on aim a the how Qatar more if I year, So or look questions sanction in CapEx? realize November, versus Bohai this the that upside Barossa of kind or as simplistically. get are upside a a within however, you if or would cash range CapEx CapEx you list talk I put I might see this am of capital, curious of a level hold is allocated think reinvestment your but at in about flow be this obviously did the bit you to limit it opportunities, but of the to are I kind of of longer-term on you've relevant, the the think percentage

Ryan Lance

where trying we'll Well, again is the as say for the commodity I market price to was at. see

the our and shareholders. to first foremost, giving committed think we're percentage flow to I high cash back of a

sort XX% as committed start shareholders. XX% by our cash of We're noticed that we So the of giving to is back you've forward. all of kind to the

control we that got about But business. somehow going the deliver will and to And expansion, the and Barossa, it business. you allocate opportunities free North think the We've Field and pace, the company got our control our into rich capital interest level control take we've as ways annually account to over and the programs we that a we'll to that. way, any look course. know mentioned, we've over still continue from our got proposition we we'll we've control sheet, cash capital amount will of do and cash as the we're going on got got we we've that. of value flow to capacity given stay we the manage we've coming sure to make we're balance is, year, also the other at that We've opportunities have and with but got did. in and over and will that fund set remaining got And the cash program, we to committed what we're So timing, the we

Doug Leggate

Perhaps press some just Ryan. has have, not and pursuing may going a quick sale the that, follow-up you were that to North There that been forward. our speculation Sea in be sale

general Now management flywheel that I'll offer because specific guessing just today, I on, of return on I'm any as for your ability cash leave non-core wonder but if the Thanks. would to factor also there. you that assets terms color also it they issue, the in into could portfolio stand and

Ryan Lance

Yes, you Doug. bet

color that process kind I'll him a provide that, you. been managing kind let on us. for I UK the bit think of for of of little Matt's

Matt Fox

Yes, Doug, do we, continues. our longer an are process no to arrangement to that. market exclusive UK on we assets But with

But brought end dispose timing and $X.X I we'll the don't to they, on in interest line. we executed the of any that, as And material very are in and then actively really assets. did we've We will fact we to comment terms the and change marketing the assets report, billion right. several other is of assets those further to lower process at portfolio unless want the, consistently, look the market, year. as that So parties turn we've that from in of might there's a the consistently properties. this that strong include on we expressed has

made the the to other aren't And to Sea North think I said work is to you assets. see clear, marketing say assets are be to assets we to We'd the there portfolio that the you portfolio. the say so But on restructuring The are continue assets. just maybe major should us. that not that's that now. behind expect UK And we've is essentially that changes

front. on that's to what players So best state the the I the think are way disposition of describe

Operator

And Please John next our Generale. comes Herrlin from from Societe ahead. go question

John Herrlin

replacement got on a U.S.. question reserve I've Hi, in the

year, U.S. sales the you you've basis, going-forward replacement nominal allocate reserves way just You kind changed reserve the on had your asset terms think of in What low should declined. this about in of growth? we a capital,

Matt Fox

Yes.

start There's a base that think by in of explaining to that overall So, we there. slide we the that their slide appendix sources reserve had, posted the what happens in we'll replacement. reserve I describes overall X,

extensions discoveries So $X.XX billion a million the XXX XXX another added and revisions places. We year of we $X.XXX started We billion, million improved through barrels. million recovery. lot with that's with produced decimal ended and through and and XX and,

XXX XXX XX. if reserve in Lower We disposition was by through we So Alaska look reduction acquisitions where Ryan get then added the And million that that you close that organic acquisitions the million and million the that's barrels. at to clear the was ratio XXX% million $XX to replacement mentioned. from $XX the and dispositions, offset in and net of effect

is XXX% So we total we feel get all that together the effect reserves replacement. XXX net million,

John Herrlin

Matt. to No, the XX, I got Lower

Matt Fox

best the resource think to drilling five-year is the there you're Lower of XX, the the that way is schedule. think think based is about in to the, to I in XX, context obviously the the because booking your on Yes, what schedule limited of anticipating SEC Lower rules, base

Permian at Montney. at Bakken, the booked Ford, we're look other example, in X% base. the the Ford, and than look of million the And the we central booked XX% less booked less the if in about we barrels about in you place, when Eagle XXX for barrels the X.X Eagle XX% resource billion of XX% So booked than in

us reserves this resource of of long base. ahead period a there's as So we through to SEC work continuing add

less we year, of barrels supply with cost at, $XX. supply with to billion to billion barrels So $XX look from the that resource reserves from, for we, and you frankly if rather the that on is this than what that year last base of if you year went XX the than cost at this the focus we look then less tend XX than of

a So are, a think really and and perspective, we and will what shape Lower X.X are in those the replacement resource that's the of the, a on. good billion really from ratio reserves that's produced way in booked of good specifically XXX% both we barrels, and we're over what be that's And shape I we because about because question, we're resource XX reserves to time. focused in your really

John Herrlin

obviously, mean this industry doesn't is being about in larger cycles, you industry projects all of projects? is Great, of these at Matt. that the one capacity as you of kinds regarding all could I frenzied I in about towards Are the you E&C did terms worried to for it deliver FID, have next approved the thanks and to My concerned some that at delivery? guess, the are be more but able commit past activity Ryan.

Ryan Lance

Not necessarily, John.

the competitive now you right out for where, look when think I light at bid and on Barossa you in location pretty is FPSOs the look market at Asia-Pacific.

real So it is we'll in highly they've the with the have itself not Laffan. equipment will through, expect it is managed That I going its well them competitive system the too out associated Qatar is The opportunity and going out about stressed subsea worried that. in Not large that manage today. a well past, forward. expansion in probably to challenges. think and Qatar Ras there. But

managing think place, excellence we've functional while large like I are projects. company So got we we've in these and as a team the the it's around capability a risk, the always got

We that company. haven't a lost as

all forward. So of these all on we'll projects excellence major bear bring going to that

Operator

Fargo. comes Please ahead. And Roger next question from from go our Wells Read

Roger Read

Yes, morning. you. thank Good

Ryan Lance

Good morning, Roger.

Don Wallette

Good morning, Roger.

Roger Read

to been as call? front everybody just challenges improvement can Don, a come you rate, forward the underlying of of just been as I disclose that some to the to increasing some I'd future internal maybe continued kind focused maybe what efficiencies. these company more you you more, being on the on achieve it and on, deliver projects Could maybe from the maybe of understand, of kind able around has can in bit, you on decline want or things has if you the to productivity opposed able describe back do guess broader OpEx, one of little going would, and, decline just the, about Wrapping talked and that if

Matt Fox

I'll take Roger, is one, Matt. that And maybe this

committed at look and OpEx. we're their still the discipline you our If completely OpEx, to

that's last and look forma on would a less If production you you this but year you to transactions, This operating forma dispositions year OpEx they our last underlying have going clear per compare notably, pro acquisitions if rather and reflecting it example, year, $X.X to happening the the year. than and last of pro a year, from OpEx costs, at growth, most was $X basis $X.X their basis. billion, look $XX.X, put for billion, and when been barrel from is moving it on but $X.XX is at billion $XX.X we're what's

lower XXXX, are unit but bit in acquisition you So when relatively the the barrels. higher absolute the that consider than is Alaska cost are impressive that's cost numbers a and pretty high

the Of of high course, all very in they are barrel oil value because Brent. it's sales

operating still in see cost we're a fact sure see and remain not, on to so the that that over focus unit the the reduction added our we driving is barrels I those that, we've, to from, it's time. in and mean cost that haven't down costs next to per over going same going discipline the several front that company lost continue certainly the barrel, higher cost make that And they, years the and we're can we, we're that we

Roger Read

talked actually that. not, can't for That's just on And anything helpful. Thanks or I underlying Yes. that rate, the about ask. wanted remember if decline very you've to

Ryan Lance

unmitigated is Yes, XX% last would aggregate wells of about they the on takes year. what online rate the that's end – at next and at of decline were producing be the all that year, the underlying end [indiscernible]. -- that The without

the more a because production effect LNG together is and which in decline. of a of sands, course, large have when and the aggregate which oil base that that modest and essentially decline, put quickly, decline, unconventionals zero about So our very we we with course, is XX% conventional has decline

Operator

Mehta Sachs. Our Goldman next go question comes from from Please ahead. Neil

Neil Mehta

for letting again us question thanks good morning, the morning, ask and here. question, Good

thoughts on company how The capital on fluid there Obviously just the just first from thoughts one ground your on here. very for collect and the owed to you that the situation that's to plays out ability just some and is Venezuela. out of the

Don Wallette

couple U.S. have as what settlement that, address the PDVSA, we were agreement With that providing respect on the and to. Don. one far as entered respect they today entitled I mean one sanctions. things. this the we with I as far complied cash to we, fully to that summer late last events is into of question. as inventories making new in the on, Venezuela, side U.S. recent a with sanctions, and Venezuela Yes, Neil, guess the I'll the payments

assure seven We regular eight ConocoPhillips officials to continue PDVSA they indicated their past their to and have with the comply continue creditors. are the I their months obligations of And under that settlement is think or intention months list very in at actions us currently high the on priority agreement. that to is with the that over contact

they that expect will we comply. So continue to

Venezuela payment quarterly know, and that Of how it a expect next, ICC we in receive schedule that that obligation. they're on to And knows and Their nobody satisfy may change are going appears recovery and course, is next settlement we of don't the to month. the installment plans what they're quarterly entail. the making things it to due the next now for

OFAC recent of into the agreement. on U.S. operating settlement U.S. Foreign actions the part under are license that we we entered other Assets obtained the, related to we The Office from side, and a is Control the government's of the it before

earlier we issues They and valid, and given go that so don't related with strictly good and this front. is contact us anticipate any see on with are week license settlement we our that to our any complications as they've have, license recently on us agreement assured We as very complying to don't officials that we how have forward. in have OFAC they that been guidance

Neil Mehta

on the mid Don Qatar question to of XXXX. it's Thanks, then like is is, be just and follow-up LNG. The that sounds timing going

for coming I And win thoughts one Qatar to the of guess strikes returns? get financing has about terms expect spend. you of ConocoPhillips on decision capital see the around do project partners. us been in around project a and there, latest any potential the you of lame But capital How materializes you would years think amount shall buyback. the cash great. how concerns, project guys couple comments substantial that of a market the after that about up outlay dividend if about any the free position next financing LNG It that the have be We over concerns the market even flow

Matt Fox

you take that timeline Yes, is as I'll one. Neil. laid just out. The

it, a finance the we're sort by And this We we I of have process price We well WTI. competitively we're in under cash achieve mean, generate positioned recognizing we this terms to of it, that And expect above very financing year. to participate project. of a think decisions be the to very even we any to is $XX way. in cash flow, made middle free underlying free barrel cash flows, have available high year, the

not about we're ability so concerned to And that. our finance

we're are how Petroleum fully we that we process as the and see we'll with So in bring, the through Qatar out plays engaged go year.

Operator

question And Please Fernandez ahead. Simmons our comes next from go Energy. from Blake

Blake Fernandez

forward if just Good Matt, expect first folks. go you morning when on we could you me roughly? with could when point, did remind production last that Qatar,

Matt Fox

way are. is be the the already being would I XXXX, when design expectations is for and for be participants XXXX are between waiting and first production it slowed it under down think to agreed. they timeline Engineering not the final is

come be early 'XX when will is the, 'XX we expect late market. it So or sometime to that to

Blake Fernandez

you. Thank great. That's

early this. getting and but companies some coming in guys aren't sudden budgets witness of didn't the of days potentially of potentially XX. the count spending ratcheted our of and regarding if I the just the maybe being activity team pressure 'XX you're all we're on E&P at in we levels. Lower there's looking as to question, suspect the you I the know to second downward now But if a I from privates, cost covering you space anything rig smaller The that's commentary on in feedback we're or some exposed peers are cutting down and beginning hearing back think deflation potential based kind know some it's cutting, CapEx

Matt Fox

Lower year some, Yes, we we saw last I some of about $XXX and, think in escalation seeing but XX had the million pressures. we deflationary are

low XXs just fleet, the months. XX% the in the For frac activity than about couple in example, last the, in of

frac we of that 'XX together Those and the quite toward now. end healthy on to about just a that 'XX we renewed year. reduction are in actually the our sand main our we've reductions our built sites of the seeing from utilization new completion So fleet that you is prices if into contracts the view with costs because big opening, budget. put is that XX% And were

seeing are reductions on we yes, So some completions. cost

side spec through on we options high of rig it, the the rigs. our XX% utilization, of the And higher about On on XXXX. have rigs end we're, rig, on

So toward and be I saw of in think that, some already some could yes, 'XX. to deflation up there XXXX going of open that we the show end showing

Blake Fernandez

That's color, the great, appreciate I Matt. you. Thank

Operator

from ahead. Our comes Capital go next from Scott question Please Markets. Hanold RBC

Scott Hanold

a couple Thanks. of ones. I had quick

there And fund a and can projects you number these projects as a to to monetization I'm going cushion? you is, at considering and our the was $X back is have guys things? that around you saying where have today, of guys to there cash opportunities chance force right this so quite other obviously in obviously, as to flow. and at if cash free discussed cash program all somewhere come you with look look debt that you an help large you is do adding portfolio a to a that's is now billion buyback and in of more But or the amount say, positioned like First, that bit opportunities would of right where where optimal now, generate come of front well that's those you have well, fruition,

Matt Fox

to optimal Scott, optimal, if there an to aiming yes, been point I we're volatile the or cash balance the raise not of host that in an we're don't know current range clear think that of wide that a there's lower I we've from and future. in are investable not we're for that balance the looking given debt pretty pretty either level we is on and have business it's its that opportunities sheet. hope the There,

cash. an not, not level there's there's of really So, optimal now

Don Wallette

feel grow that funding priorities. kind the them today. the add cash Scott, of capital company, you grow now. at would I think grow follow margins, for again that flows with comfortable investing I level we're company our the We'll right we're that We we, the

in commodity have level to extent have the to is the that, to fund the repurchases. down market. portfolio our we And And opportunities of cash what okay we're the see opportunities that stands, ourselves present because holds we the know we also Given we to we're gives there, balance can fund a putting that we on fully stand that what where going for now, themselves that additional receivables. going of the billion comfort it we and $X might on the sheet have above when that can downturns sheet our for share cash a us, we and price ask us future do balance in

Scott Hanold

more optimal look at Okay more hit understood. that some the XX, point Lower of Touching appreciate, more. up an as or still we've the in of that you can as a Are your building that? based on, maintenance in they're the Basin, sort kind plateau look guys the point you is the put as on Permian we hey, and follow-up. with the near at appetite that to on you those at? the going are And X then Big unconventionals there And kind Delaware, be for to to to those develop Eagle Bakken see of position say, of do what Ford pace and sort you

Matt Fox

Bakken, used would and [indiscernible]. around just sure we in years are, we said, we testing Ford, or plateau. few we last some works, And then growth Eagle we a a the In piece but completion but right again the we're to took We're moderate something the reach or That we get can rigs work plateau. the, those and new long ambition the new And I from three running rig design So that six Ryan now to is mean in before there. sustain way Bakken. what year, plateau. Bakken two, we'll the to we're further. there, and to see its might Eagle from the we're level essentially we're two We two there's for as we of long comfortable running a continue what Vintage were understand at This will that more next plateau we still grow in but rigs rigs. we we'll and the as growing. year, how third called so designs But put I don't, that say Once remember left technology maybe completion the before and several we have Scott, in we X. Permian out. for the out over suspect are differentials back of continue year the plateau. not where a and blew rig to on, Ford with years that, in running is just, our time. growth I for grow the revisit you Permian

and of consider go and infrastructure carefully you two, the activity know plateau here years money. and of several the isn’t as the overbuilding rig, industry you the there time, fundamental of industry think do does we the as is pace the Certainly, or a how rig we a is for you're And change. how is. are optimum piece the your whole not think the the if about this or we, You year plateau optimum very of then good technology infrastructure optimum plateau just question certainly because value is, where asking the pace build

we So rig assets the a to we perspective. on good these have how and perspective optimize should from managing be count value handle I plateau think a

Operator

from ahead. question LeBlanc next Pickering, Please Jeffrey from comes Tudor, Our go Holt.

Jeffrey LeBlanc

for Good questions. my thanks taking morning,

mentioned around the for a objectives and all. Ford testing terms going could when X term? then of sense an that's talk one's could there Eagle the bit you a on for a the we just Permian, a be XX. hoping getting all, may timeline in just more allocation now Lower asset First upsides about talk on specifically at may operational I And variables both bit you data was toward that times tweaking hoping you've then you some Vintage in in near the a you that see the in was within just for also of about capital few

Matt Fox

the factor, Yes, volume they the same. basically to have we the X, intensify improve recovery behind drop the stimulative Vintage to Vintage essence the I the what are, that's mean sayings X, it's

improving factor drop that, and We but improve underlying the and the volume. of that's the the intensity haven't regularity to trying as that stimulative really disclosed it's parameter same, we're the recovery

we well encouraging got single the completed we year really last and results there. So pilot

at more we're So And and locations XXXX. multi-well Ford three different going what Eagle planned do within have now XXXX. at in for is then we're doing to different spacings pilots we two

from So year this results that get XXXX. initial we'll then late results more and into

pilot that multi-well later in Delaware year. test too, will the We be X are Vintage also this the advancing

So results come there won't until XXXX.

the, a to technology very to forward it's here interesting angle be results. seeing and So looking pursuing we're those and

In by or next and driven, terms year year the to, two of the growing and Permian rigs. specifically, really growing capital allocation two is rig course, sometime the it then to this of count over three

Jeffrey LeBlanc

pretty for is earnings. rounding listed you one the today Great bolt-on, maybe for acquisitions throughout year. earnings Alaskan that for a in second is has consistently nuance and which last saw year, Montney impossibly $X.X this on billion and air, billion year the then as bit and QX my I compares but been maybe the know disclosure the a with acquisitions $X.X

incremental on so activity? million nature wondering any can is $XXX color give there of or for that just implied So just be the QX's if you that might there

Matt Fox

Yes.

and Austin was Chalk. in to is North million the the is balance core like Louisiana really acquisition So The up Montney of that Slope acquisitions places $XXX some the Western $XXX acquisition million. smaller additional in

this the So $XXX the there. us acquisitions makes to way, up one it that difference portfolio several is, It's takes that can't and smaller-scale the point to big I one million.

Jeffrey LeBlanc

it. appreciate I

Ellen DeSanctis

Thanks. hour. the getting top the to of Paulette, close we're

last we'll So question please. our take

Operator

Please comes ahead. Energy Thank you. Michael go question Advisors. our from last And Heikkinen Hall from

Michael Hall

Vintage in see of the Ford. Vintaging the I Appreciate the pretty you Vintage in Do more step Eagle in big X if curious, kind at completions had in And has to the of to then, is way changes question, And that one Vintage mean look context you disclosures, say along the prior Thanks. Vintage the at I time. moved of, the X I you I you of would your was alluded this of in you the on you're guess as last kind Willow like from rate X of guess. potential in guess, cycle, as up done you've other to or move the I sort the terms Permian? place that's something change, margin. you still of where but

Matt Fox

Vintage trying improve So It's focused isn't X recovery focused to IP. factor. on improve to trying really really on

the EUR X they, increases the commercial X are is from really not fundamental Vintage So a This that in targeting here. more Vintage disclosed production any dropped in we've through improvement is across big volume. given we what

and curve type what months is the how other about. brought that's evolving take interference wells is truly X Vintage online to wells So were with these behaving. it's to why how several That's after understand is going

will Vintage than so, And it Vintage through X. X improvement a have characteristic different of

far we're to plays, Montney, our Vintage So similar of the across completion Permian techniques and rest Bakken, X. implementing really

before And transferring test Eagle Just everything in we we'll across Ford quickly, now put we can so in in organization to everywhere X then, pilot test plays. also. learnings have it the good testing to Permian we're other and we're don't work the a Vintage the at civil pretty these

Michael Hall

thoughts be, super just curious if be X for helpful. individually to XXXX? I And that's willing would just my Big end or you'd Great, provide possibly for last aggregate one the rate on guess exit in

Matt Fox

is said Big mean produce rates, of rate gave XXXX. really through in average what think movement for quarter XXXX way I to I on to because the rates for is Well, here. X the individually what earlier we, we're average best in fourth my exit view, in the which the we've exit for the the, about the, going the But above we're the to do going $XXX,XXX really

come and the growth about from to over XX% that's that's through first quarter. going 'XX So

going prepared his end went we relatively half the programs these this you exceptional year, So, really XXXX is the year. we great had know, how and remarks, outperformance We toward mentioned the I In in first to of as particular work. think the had, through in be flat. Ryan

each you You are so lumpiness plays. individual multi-well have, you the get pads, drilling within of

X. the multi-well Towards across end the coming we on had pads Big XXXX essentially simultaneously

will now a take big a with completions, more saw be of to there which and the pump. experimenting moving X bit and, we a we so be little these, momentum we'll So jump toward Vintage longer

first why as up half in of So to that's be and second increase jump of we expect year we'll flat them completions. the through the the year of we number then the half the

Ellen DeSanctis

Thanks.

that's think us that. thanks call everybody. follow to the I really going have again if means back it wrap your ups. to by day any up interest, We all And appreciate Paulette, for other us. joining you

Operator

Thank you, disconnect. participating for now you ladies This you may and conference. Thank concludes gentlemen. today's and

ConocoPhillips (COP) 31 Jan 192018 Q4 Earnings call transcript