ConocoPhillips (COP) 30 Apr 202020 Q1 Earnings call transcript

Company Profile

Participants

Ellen DeSanctis	Senior Vice President of Corporate Relations
Ryan Lance	Chairman & Chief Executive Officer
Matt Fox	Chief Operating Officer
Don Wallette	Chief Financial Officer
Doug Terreson	Evercore ISI
Roger Read	Wells Fargo
Neil Mehta	Goldman Sachs
Jeanine Wai	Barclays
Doug Leggate	Bank of America
Phil Gresh	JPMorgan
Scott Hanold	RBC Capital Markets
Alastair Syme	Citi
Paul Cheng	Scotiabank
Josh Silverstein	Wolfe Research
Michael Hall	Heikkinen Energy
Paul Sankey	Mizuho
Bob Brackett	Bernstein Research
Devin McDermott	Morgan Stanley
Pavel Molchanov	Raymond James
Phillips Johnston	Capital One

Call transcript

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Operator

Good morning, and welcome to the Q1 2020 Earnings Call for ConocoPhillips. My name is Anera and I'll be the 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 to turn now will call Ms. over I DeSanctis. Ellen Ellen, you begin. may

Ellen DeSanctis

which our and discuss you release an quarter update good announcement Anera curtailment dividend listeners. results, this our our earnings morning press on to Thanks, and today to Thank declaration first us for morning's actions. our contained joining

comments, will of any today's Don Lance, this a question-and-answer Officer, opening call our today shortly. slides post for and session. our this we'll the Wallette. this replay Fox; very Matt but will but Chief of but We and some We CEO; post speakers of call on Our don't Officer, will shortly. most Chairman be morning, have have any Ryan will this slides Financial we Ryan make Operating don’t call morning the our reserve Chief we short replay time a

As you volatility, market have guidance. suspended we temporarily know given

make our could may performance. we uncertainties some that call. impact in for today's the and of filings However description SEC refer risks statements to future forward-looking Please a

And Ryan. call turn the over to now I'll

Ryan Lance

to quarter welcome world and us. due quarter we guidance. results know, suspend like Ellen feels E&P already first a markets, first discuss would and here uncertainty this future for as the call. we long in the you the recent our ago. brave earnings today's the temporarily of but start in detail guidance and you, Thank and periods, will time And volatility provide of significant we are quarter a it's to call sector for for Well, all new at to use Ordinarily,

So here we are.

And ConocoPhillips provide we today. we How this are What time use thinking it's respond? considering we that's important are guidance, But while insights. how we'll provide to we continue call this or to intend actions to conference environment? taking about for taking to won't believe,

three There a listeners I'll call the themes emphasize in over make our session. remarks brief very to question-and-answer to I these are some for want remarks. then turn

running First, our is underlying business very well.

this in certainly press despite quite proud the strong You a saw pandemic. I'm of quarter our It was morning's release. very quarter our results operationally organization. first COVID-XX

While the on our I turnarounds capital day-to-day, including that upcoming all delivering and some safely changing assure activity. our workforce business, in our seasonal is activities are ongoing you

gross The emphasize second be want This May. theme months won't morning that oil we are we of curtail and begin The XXX,XXX to Surmont to expect that curtail about expect Lower couple -- few we weeks ago in surprise these per in to in We'll It's A XX I very from we remarks industry the gross day announced per our we'll our also Lower in barrels prepared June XX about bumpy combined. XXX,XXX to next announced to announced anybody. Surmont for day May plans Alaska and for curtailments us. going from combined. of voluntary and this. barrels

a our remarks. we entered emphasized industry. in to most compared that protect driven downturn to brings first a strength our to fact On In net And theme should willing flexibility basis, value of one-third relatively the as we've of of This about actions the for that be this two the position seen calls, to view market this by and balance environment only that use we're our conference quarter the advantaged but our our third clear these that not me a production. previous are signal represents sheet markets, by this update in shareholders. of

our $X billion available release revolver. nearly in we including today's saw You total press ended the $XX billion, quarter of that with liquidity under the

the can decline. low markets continue based then views to factors on and a allow rational decisions make diversified and are we reasonable monitor that is the relatively act. portfolio and Our These to us assess

ability continue manage if needed business programs the to us protects way our relative take our allows that preserves resume to and additional position, actions in We to the a strong in future.

The So had you first here's underlying operationally, is a business comments. in our safely take what and delivering to all workforce strong running plans. summary, focused from well. We my quarter I our things want considered on remains

relatively significant expect advantage downturn we need into the We that relative do. we'll out. a know of to period this as short environment volatility term. plays And and We over what protect we coming are this advantaged

to to operator going we'll over and So our the turn with Q&A. begin the that, I'm call

Operator

you. Thank

begin [Operator will ahead. Evercore Our session. question-and-answer ISI. Doug from We from Please the now comes go Terreson Instructions] first question

open. is line Your

Doug Terreson

everybody. Hi

Ryan Lance

Hi, good afternoon.

Don Wallette

morning, Good Doug.

Doug Terreson

to production or Ryan have interests your production to higher factors. other responsive may proportion with or your do more have than operated market been working -- your So curtailment seem your peers which of

So, that is, think starts your to if are primary play restored curtailment are then decisions? output be there portfolio risks factors other these Are also you or my question of they're control drivers And what your to recoverability into the for after that meaningful? it? economic the

Ryan Lance

control I have we modeling said we're a got and these taking operate. as decisions, sheet things the remarks. of short in the by the balance be that of curtailing probably Doug. over that Thanks over can we are sort right We're now. could curtailment we the of prices my you playing of Matt as market little just the as Yes. decisions guided We've for could to very scenarios it's take longer-term producing. much color first we way one. our part bit think that. the the accepting second think on see a We product the Doug Honestly, guide short And provide a these out maybe I And strong right don't more netback certainly kinds and we'd to I be term.

do the to these recent sheet things We we've based to the that but on market, we coming of curtailments, things. expect of the infrastructure and to kinds from and on do be our proactively on can based go our governments view these things got capacity balance are

we're see acting think and I strength, recent In in sign this that, fashion. deploying view, a we our as and of a

So these markets. of curtailments the I'd talk look the maybe improved bit recovery let about like would back – with a end little Matt what on

Matt Fox

Yeah. be Doug, – And going anything how the take with a it to then back? the I One to few Alaska either quickly reservoir are or are or back Canada, we're we that that weeks. lines. production risks weeks, bought to making months take majority full And production to it we quickly. bring think brought reservoir the can matter two curtailment is, production other perspective. taking doesn't risk answer. but we associated – of across bring which to of aspects from can are we And any Slope a within sure a to North any bring can It the basically, very back in so back that's wells not doing get facilities there's

and completely. – no operate Across to That's plus, time. operating we've can so of getting In why that enough prepare them got as of of rate down there's minimum that at these, how Alaska, still we're those the consistently a wells there. for heat we're not we level a protocols of We're – minimum to sort can specific all of there's and in Surmont, a a rate risk shutting going set for reservoir restart. period in to down steam we down we Lower keep chambers provide we're a to the very in temperature to XX, In intact. shut damage

back So weeks damage. couple we no of can come of risk in any there's a and permanent

Doug Terreson

several Thanks. a over weeks. And mandated be been also the supply regulators past then prorationing Okay. there's of commentary surrounding Ryan, by of lot would that

out. see to wanted just to play on topic where think I So, you and that you how it's going stand

Ryan Lance

Yeah.

supportive that as the infrastructure from very become storage-related for we're We haven't taking both or that market going and I to of cuts a regulatory us been that other cuts because quickly we perspective, and to that maybe Doug involuntary, voluntary-type guess, through either well. some operators is ration degree and think

market's working can to So the is supply on kind to other what take the drive and it's down the the inventory what or reacting. market refineries of going match demand levels end. and The

thinking Commission been been efforts like about. haven't we Railroad of So the has analyzing supportive recently and that

Operator

you. Thank

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

is open. line Your

Roger Read

brings Good your any shutdowns and that about reservoir confidence? what shut-in the doing Yeah. in about I you guess, in you are June? first But of you question. can we've they companies Thank and the through confidence reservoir you. you reservoir different heard integrity or the curious that examples issues – go shut-ins you as heard And us if give doing what continue be to be gives I will from just different I will answers doing was beyond things that morning. then, maintaining elective May

Matt Fox

duration. regular field through basis because – Roger fair some generally really for a just that's shorter on question. to The this a our in a extent we go it's

or year go Alaska, processing shutdowns in do And at Alpine. example For every full turnarounds on other a in facilities we we different turnaround Kuparuk. through

take in to Surmont. quickly. mean, and wildfires, down down, and bringing same true the down we've because is them occasionally again. in So, The on keep go had truly we wells of shut know we've how put I them good to Surmont to where back had condition very

in most how So example to example well down. to had June as for and Hurricane Eagle in we Lower XX, the go Harvey. know we to Ford recent the how handle that

get can the it. both So that we gives advantage to plan handle we'll that experience pain of know how plenty and us now got we confidence We've it and we can that get this. just

And reason be to no there's so, that. about concerned particularly

understand is what back our also we production rates also after And understand, our that We what comes flush decline shut-ins. are.

us well. economic gives that everything make a need as analysis to that we sensible So

through. So trust thought me pretty Roger is well all this

Roger Read

wasn't the pull or quarters? you significant bit, looking about trying anything I'm a through. I just also of is anything levers, there comes that, in working the are capital of be different revolvers or the was I attitudes at because you're here Don thought how it little didn't understand coming should thinking we new there. I'm mostly gears experience in you're but thinking curious about there Switching out company. kind thinking balance Well, debt not business sheet-wise? the from else where that could of doubt obviously some side liquidity And like just to just

Don Wallette

Not been. really, We pretty our has Roger. managed -- capital always finely is working

we anything So lot optionality or like surplus don't don't of there. that. have inventories carry We a

the we down way about to coming would few months items than road low prices of next a as the think in the cash anything operations can't negative low. oil other expect from liquidity be thinking that that over I other Just continue affect

that's We the the second that in still the transaction. to close We from Australia-West expect do believe proceeds going quarter.

So than I be in can't big-ticket out But that think a from there. positive coming of items will any other direction. that

Operator

Thank you.

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

Your line is open.

Neil Mehta

here thanks seen Good sense have today. for I morning team and

it. take We around The this large one and couple took first the Conoco had is some today. of of dividend years I for your assume dividend question to their ago. the in a of who anybody reduced medicine is sanctity competitors ways this wants

on around So -- distribution. safety strategy curious and that your dividend the around about but view

Ryan Lance

Neil. Yes. Thanks Yes.

I have since priority. we a our And think we the you -- see kind cash We reset kind of our That ago. greater a of value number today of our declared as remains dividend a to proposition to than years press you return shareholders committed release. XX%. saw of We've in really that were of question. the answered outlined

ago. a able is We fixed with return month a of that the the to exercised that suspension so that our be of we to here shareholders the dividend cycles. part execute or the part through flexible to buyback expect And program of

So we're pretty confident.

you this we I to last was the back a with described downturn to us pain stay. we As our years set the we mean in company because wanted and knew volatility ago of couple up took

maybe what four couple sheet beyond get positioned strength And a that Don's comments were even maybe sigma we as ago good to this this event we three the or outlined November. thinking have years But balance in think is pretty on what and about through company I in a that's downturn shape. well a we we're through the of in

Neil Mehta

past of the a some to around there's this to get the call, any bottom argue ask? bid little in question cycle the had this towards around as on but on and consolidation. updated you been spending curious on and follow-up thoughts I the know One is your could views spoke capital wanted it. potential a to be and but is bit A strong Ryan. views I opportunistic, Thanks you've patient

Ryan Lance

think I right No Yes. you're Neil.

can't there's to many times. break we market. patient. the talked been our has going as monitor described it -- We're and be stress described. sectors changed. across that willing We're We've persistent. that. we've it We significant framework to accretive market be certainly haven't you've believe the about we're Our the I long-term to But -- And we've transact. to financial

won't we sheet So balance the strong put risk. at liquidity and

this needs in much Bloomberg around makes was structural interesting broadly model obvious So -- growth And Denning an change. E&P that it speaking The G&A think too broken. it it I it business. running here was think I article Liam yesterday. There's addressed is industry by this

it's So think read I reasonably accurate. that

There's terms. getting too investors. in It's many names relevant cap less for market

So more There's depth imagine over some management the rationally be discussions we run this do growth. right the could improved But downturn. now. believe assets boards pretty going on between and returns of tough for

will this think realize, it to happen. it time I So probably needs of but some take for to

Operator

you. Thank

go next comes Please Our question Barclays. ahead. from Wai from Jeanine

open. Your line is

Jeanine Wai

in expecting The question June everyone. afternoon than good Hi, production My curtailments curtailments. first anticipated a bit more you're on the they're what May. June is

June May I the implied forward June pricing stronger about and you can adjustment, than WTI CMA July the look versus rule when May. so plus And guess the at we on the you Because settled level? curve, how looks talk

it So based related something physical you're Or bit conservative a is else? seeing little in your is something here? to just more on the market being the you market? are decision Or just paper versus

Matt Fox

to while were This and so take have I'll crude me as we April we into the to -- much The curtailed could we in buyers. sell essentially we that entered with Yeah. Jeanine. had And to as contracts. The and is those contract March honouring previous Matt. entered contracts -- into months oil. going we honour that, still

June didn't place where in or we have that in in was have to happy respect, curtailed have where placed contracts much fewer these not the already. buyer And we more what we we is because flexibility take. So barrels

the why is June. reason primary curtailment in the that's higher So,

actually also of the There's just and a net were a offered not issue as are else. prices this bit that add being market dislocation of the price everyone still between

phenomenon And think stacked still in I that was here in May. So it's June.

both your responses. potential So of there's an of element

true. think are I somewhat both

Jeanine Wai

thank helpful. then, XX-year Ryan. And second Great, my Okay. for plan. question you. maybe the That's It's on very

adjustments plan? or much So, plan much environment if current year of would medium-term Meaning or out you you to simply I'm that, more value wondering, have the see meaningful delayed? do pretty the you pushing exact the maybe the you Or two XX-year conditions to so plan? shareholders more that see a resume the could underlying changed make

Ryan Lance

about that -- barrels Alaska the Yeah. philosophy to principles last to June to doing was I'd in add as an companies to plan we really E&P investors it we a taking a are XX-year Thanks, But is back question and that, Jeanine. day the this aren't are value that doing And returns in to question on so. think bring that and into business. additional XXX,XXX May focus your we need much be second

returns. of our supply tenants -- of We through cash of more Strong the basic don't portfolio that of see back sheet I XX return a it got we've people the of return. than through-cycle supply remind cost XX% looking cost shareholder diverse billion rate less changing. XX% I'd plan low-cost in balance to returning barrel supply. $XX of And after-tax that, that say than would embeds resource base

something and prices. So that's sets for And about lower you in we've got long resilient to up. and we've got preaching lower been be -- volatility these prepared quite

they're E&P right an business. So the for ones

choices investment how optimize the XX-year Now of tactics were on, our that going to we're had. plan based the we

with had scope of So -- and the of that the last November. years downturn. plan work return get recovery But will dictate clearly, executing early we of that and quickly and outlined the has speed shape the pace that how previous we changed the back

and intend to be passes, the approach. and expect with little done. The get we a -- even So, philosophy might expect same when But a different competitive fully staged to differently. more plan programs bit and when event we phased have this we an emerge

Operator

Thank you.

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

line Your is open.

Doug Leggate

I I to… could Good there. Hi. wonder, Hello. Ryan, back I if out doing okay hope everyone morning, everyone. bring you is

Ryan Lance

you Hope are too.

Doug Leggate

enjoy if another wondering reduced give that just conversation. breakeven my in you've with with shut-ins. shorts. capacity kind I work could adjustments that I'm you But your production the to your Well, a a capacity is we'll is refresh you Yeah. us give save for the made, That's going right have do Where you to of the cash out of with flow think, first us that? breakeven how road map my the just other for now coming question. side The

Don Wallette

Doug, Yeah, this is Don.

for go-forward a basis, if CapEx the spending was I recent that think on a at looking we three breakeven on of $XX remaining with quarters cover the our mentioned, said our we WTI. year, under -- to you're call

Doug Leggate

the dividend additional and reduced include, Don? the the curtailments, -- Does that

Don Wallette

It does dividend. not the include

the to WTI. mid-XXs get to be So the in you'd dividend

Doug Leggate

curtailments? the, with And

Don Wallette

And the not of because we've CFO because they're as to We is you projecting them curtailments can I the what as of we're don't the impacts that curtailments, that far it quite know we tell But expect. June. doesn't be. beyond going announced prices small,

Doug Leggate

to Of appreciate or either the sustaining know course, this it I to second one if -- of question, but that. which -- your -- okay. back of sustaining wants you I want My issue don't take supporting capacity. production to goes

So, discussed. you volumes when that, the obviously taking can you those think and about as you're you shut-ins recover

an backdrop But running Because escalator a underlying what to when I going happens believe production you're basically have not unconventional of capacity? to drilling the business the declining up you're against back that, the us I'll Thanks. with the to through come and end out Lower walk there. production it dynamics Can X leave the capacity, lower there? other XX. on And the absolute of Big you down this

Matt Fox

that I'll this one. is take Hey Doug, Matt.

production about XXXX, the curtailments, productive operating average cost any announced would same ago on our XXXX. as based don't we be that a average and capacity weeks to couple if and the of for capital production the reductions attention So pay we

for will The up including then the -- ends be it capacity-wise the actual So, curtailments. production whatever beginning about flat.

the at, the In year, the we're over in terms last don't eight year. of the profile of assuming our of getting what which complete in was capital loaded. front-end the think I you're X that mean, shape through months Big And is the we program the obviously any I wells capital

So through there's that go certainly means some decline as there's some we the year. -- capacity in

But capacity. direction decline that be so that, parts overall the concerned there now guidance getting many the We're curtailments. because moving about giving including not in are will specific there But misleading yes, guidance. we're is, just on some

actually the XXX Now keep we're Any very so in of can somewhere going here region be recover in capacity or quickly. DUCs. some we loss probably -- DUCs mind that building to productive we

is this So a because manage we're giving But not of we're concerned on misleading specifics sort we can thing about that guidance. transient that, giving through. any

Operator

Thank you.

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

Your line is open.

Phil Gresh

Hi. Yes. question. Thanks the taking for morning. Good

question somewhat prior is The the of a first ones. couple related to

You've the Back time back low XXs increased $XX, about Do this be as WTI XXXX? as about the run about Analyst the of ramped sense year your full you the $XX now? see in in breakeven spending you think year. moving for you it at maintain of high where you're to the then up a to years. rating a does beyond over talked bit ramp more and to work do few some you for think down visibility? breakeven production to Or going objectives way next How make it sense originally makes it's Day, its rest the your this XXs and over

Matt Fox

and how The epidemic this that implications opportunities the investment in Phil, Yes. sustaining for at long-term and is demand question we -- demand very we But below run supply speaking, implications therefore a the price -- general, little becomes our although, long of the could $XX. see price Matt. for and this of average in generally low run cost very prices. capital sustaining a of

our feel to those interest don't shareholders' best development exploit opportunities. it's to We in not

So choice and of it deferring I opportunities. the would try think such investment would it's breakeven, of lot very supply we it that because make a would a at to unlikely be low-cost run low be

just this said how see to have that, we'll plays Having out.

decision implication very it's long-term We But to price. now. the have right on that a it's see if to a think make we too I sense on early mid-cycle

Ryan Lance

that. if or different And if it, recall you to model Yes. of we've in we November, and different idea mid-cycle well. price, would applied long-term XX we about talked asset a our add But broader a our of that a have is optimum we I rate sort that back strong of Lower would we'd to Phil we what obviously, -- kind come as optimization unconventionals and portfolio have pretty and across looked and redo exploitation back that our

better it there that what downturn you of business. of the -- would is investment the what we look because capital And obviously this a we in retained higher is sustaining would we the a call spot going through make returns and what generate all that but we've that, we we're our believe level, might sweet So today is capability. than level -- at is

we we're we've the that capacity, if our not when the strongly so choose to market have we of eliminated to. informed short and by any can like retain organizational because recovery we we're back chosen we might and again So what look that capability -- of if come view that think medium-term and

Phil Gresh

Sure.

I be appreciate early those questions. asking It's No, that. of Okay. types to

Alaska. how about your very based and you're your Willow development and other, is a the piece just of view curious was just would your think The timing now forward lot of timing guess, Willow the in -- But about a on it? another from lumpy you time, be thinking I'm case base how macro plan rolling base over part looking And of there's guess I -- potential which the outcomes. what I around case how this on

Matt Fox

Yes.

through So We're the now. and concept Matt again. just in working we're Willow this stage selection is

with year so select concept. how that, opportunity centers get time We how big and end drill have a And the do to many we line build, I mean, to facility by the this we would have do a the on. that us of

And decision pace we'll then dictate continuing point we're that make beyond. year that the that towards for the and a at to end work So will towards Willow. time of decision the

decision have -- decision that defer we us. we Willow So to the of is not ahead but made and have

through that. to we're So work continuing

Ryan Lance

permits And we levels. and expect this state both federal supporting the at at summer the here development Willow

Operator

you. Thank

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

open. is line Your

Scott Hanold

If we tests and give have stay that a from bit. and that of some with how completed next your what in Thanks. decision to so? out could Alaska you Can a year there. learned sense helps you program some Obviously, winter appraisals form or Yeah. us you little the you've your of

Matt Fox

Yes, is And Scott. we concerned drilled drilled at -- Slope if evening. for drilled camps we at Willow. the the some and two out Willow a having reason appraisal we outbreak. a the we planned we about Good that about and outbreak. North on yes, And half exploration have did and Harpoon COVID having had And And wells we were program one three. we exploration at out four the didn't planned in west thankfully, way COVID Harpoon these

We an earlier. caution to shut for abundance our of have the people exploration program contractors. down and We decided

were we we're Willow. data wells make and track -- at results decision two wells then. just still evaluating for just wells select additional We'll to the the on those And four those decision. if were But decide we that were So that concept still want we or drilled we have expecting now. before the we a

the We we complex set drill top that its three our know On to for Harpoon was that appears second we get response. which edge well exploration original of And one. until the and there. won't The wells well. well, based -- in to the sure log drilled have clipped the on the drill a to chance is plan the only South

program. bottom-line to out those until evaluating the we still we're is is So and exploration but out on I complete Harpoon get that think to back jury results remain there the the going

Scott Hanold

color. one you expectations might for this this Okay. for the maybe be And Good next time? you distributions LNG enough if good over Don. be at would of I can a you appreciate outlook. kind think The it. quarter that on information color Good any year have or And color. provide

Don Wallette

well held so pretty realizations Actually, Sure, Scott. up LNG far. have

only fourth down LNG because our were lagged the from about that's of netbacks But nature. I think X% the quarter.

the going So rest to impacts that's rollover we're the to of go going we through seeing year. and the start as

talking term in up long-term we LNG an is of contracts very all have and majority compared I'm of The globally. -- vast advantage do relatively -- to our so well LNG weak about But that our spot of under current our projects they're most market. the holding

XX% our than total think and of fact, LNG are term spot. sales XX% less In I

So as you know back APLNG. We're as million to quarter as million expecting about question from between reported distribution the distributions for maybe I first million your $XXX think far we year. somewhere the in to $XXX $XXX still

Operator

you. Thank

Citi. ahead. from question comes Please Our Alastair next Syme go from

Your line is open.

Alastair Syme

cash Thank you. cash could a about you you're had give I'm how if in tax Don I of, related on wondering for flow. this thinking environment. just question on sort the some, guidance

exist? I to what extent I think still was tax-loss if I remember U.S. the back in XXXX you had these substantial carryforwards in in particularly wondering

Don Wallette

tax in out stable as still think could when probably position more were of coming in we Alastair likely U.S. markets XXXX. a into that the were stable this And non-cash we but still XXXX, that thinking maybe relatively paying come We're year Yes. as I early position or

obviously to losses is that because back time this going to have year. we're this set now some large frame going So

So I out of certainly to before. don't come it have it's we might now of an what going when be we estimate but beyond thought

Alastair Syme

mean position in that does minimal X effect? the in is So a in U.S. XQ taxpaying

Don Wallette

in we paying in position a for expect and remain quite some zero tax We're time. there U.S. the Yes. to

Alastair Syme

Thank Yes. very you much.

Operator

Thank you.

comes question ahead. Please next Scotiabank. from Cheng Paul go from Our

line open. Your is

Paul Cheng

I are. afternoon think good overall morning model business where you Ryan, your changing. you depends or on Hey, Good are not guys.

has of this that it's of there in changed have the You a within or because model event, a But business what ratio any shape as the If leverage reinvestment? return framework have some the a your the percent comfortable not? investors. good that balanced what growth of is or been consider and acceptable of changed? event range? why -- of to parameters form that parameters Any this would those is not a with Or whether cash

Ryan Lance

to Well is going Paul. tell time I think

is there drive different the behaviors where any result this, view pandemic got we of I out this that demand consumer in find to think might permanent as through changes longer-term loss demand if a to, of a go returns price.

think of kind -- the to people and I out lot a So closely that downturn. don't try very watching end to this we demand at of of like we're rebalances where understand supply

probably a about again fundamentals resource to sheet of talked rely earlier supply the So early, a of balance on bit I low-cost the we'll the on continue that it's business base. executing strong but

what under -- or been operating And laid November. proposition value been for time in that few we quite we're and some back at years. committed at the we really to We've we've the reinforced out November least last in back

So how around question what return come back and and term of of prices you think our long up I rebalances money out we we capital have and the see where as demand shareholders, itself ends just long-term to being intensity this -- supply to view your the downturn.

Paul Cheng

that long-term the I the can end more or I'm five year, year the if we with problem is long-term is what that tell really that years. not impact. impact or know fair. we this what real we mean, of four the by that's mean, next for probably only is won't -- Ryan, any or I the maybe there's think the for I sure know

four that really Is that guys that some look at for term maybe long you you So it? of that you until the have road we down years do impact? to going is probably kind anything what to how should confidence know are you differently not five means way the yes, that level the

Ryan Lance

how to put low balance the price we'll our what cash much environments and to we on run know Paul take efforts cost years business. back the because sheet the you is to We what that react on in. we base and we our have sheet philosophy that where competes confidence the we're pretty have balance ourselves commodity we've And the have the low to around supply we're five return in very find and long noticed in? shareholders in We market to company around scenarios. that And match existing capital need we environment. know based to resource the -- have we We're environment doing. How a

going we to right certainly make flexible portfolio the and do we're we won't the years. wait into we're kind on. five find. to environment what be to We have places sure the that's putting and what And of and to wins the going focused what know we're we reacting money do to that So be in

Operator

you. Thank

Our Josh ahead. next from from go Wolfe question Silverstein Please Research. comes

Your line open. is

Josh Silverstein

Thanks everybody.

we've remind on Lower be broken how down Brent has month. those volumes A&S Alaska you and you might XX Just volumes, selling and from just the the the volumes? typically how sell kind us over how Can like there. that of you're past thought relationship interchangeably about That different just

Don Wallette

of Coast, take I'll break Most very why down A&S of which X. because A&S into the go Josh, one. our is low sales rates seeing between pad traditional Brent refinery the and that West Yes. the relationship in you're utilization

would expect once that would the in return we up West relationship that demand the So picks rest of Coast. California and

they're go, except A&S Some wherever sales going of But our opportunity do cargoes We circumstances as open today. us. is we're with unusual our very for send usually facing Brent closely if as to they correlate generally, under the we them Asia to well. do

Josh Silverstein

defense played there's market. lot Great. of by in Thanks. it's right whether now, then right or Conoco else being the And a everybody now

Just service get that lever pull breakeven can anything I lower to wondering price. where forward there asked else Conoco play that standpoint on question offense the but the in was environment to before, price anything is from guess lower? this cost Conoco breakeven M&A the can or a

Matt Fox

supply mean, environment. I we're chain with opportunity Josh. some to in this Yes, obviously, on partners see the deflation working our

and suppliers. relationship there. -- value of strong may some We a have there We that with be

focus down. also We last adoption and of the a find to new and drive ways strong across We've continue accelerate so had to opportunities the see over innovation years are the company there very technology in many the on supply to value.

understood We've made know cost on fully that that few supply strides over is moving because incredible last of by business we're and continue to we in we're on part not that works the the our here mantra wins the the of everybody over and of to every low supply. job mean, cost we of is supply -- is yet. that I in end every cost sense little on what down, can focused commodity time. drive done And years

Ryan Lance

volatility the sees Josh, workforce, the in market. our And

lower these and cost happens why, and the breakeven see continue as volatile we what the markets have Matt to down. said, to supply So they drive in of

Operator

Thank you.

Heikkinen ahead. comes Please go Energy. question Hall from Our from next Michael

Your line open. is

Michael Hall

workovers back see or just are costs associated refurbishment I Thanks. back Good capital associated Do about curious or any volumes? those costs to you bringing was as bringing other expect think associated volumes. those morning. for restarting guess, with ESP notable with of material costs I or curtailed you things the that any sort and/or like incremental operating

Matt Fox

But workover work our And Michael. reductions. Matt, of have well operating -- our they is and part slowed This cost we Its particularly. activity. not down

up the for again. we the and result recover -- for produce the back most back prices payrolls reduction when again. bring But on in go them significant incremental at example, we barrels So don't incremental activity, to any want ramp that and part, workover to those

think I what were you that's at. getting

Michael Hall

XX there beyond that that guess, as also I think second go we and And, portfolio? second thinking would helpful. mean, just you quarter, That's Alaska, keep Is of rest global mind that as into turnarounds Lower in about to we we anticipated of any the are be was well the something head in Yes. ought mind the already as outside keeping the these that the I to curtailments ought of just baked quarter? in there Canada

Matt Fox

Yes.

ones the there year notable heavy Last on very We schedule to this are turnarounds for as second take have We Qatar and but no in less the will in through did be unusual the second across we're of turnarounds. keeping a standard sort predominantly year we of that happen turnaround portfolio the that a It's quarter. go was this and year third in they going are and the them quarter. occurring heavy year. first but but year, majority hugely third will in quarter,

Operator

you. Thank

comes next Paul Our Mizuho. Please go from ahead. question from Sankey

open. is line Your

Paul Sankey

Hi. crude regional for dynamic, Could about within tremendous you prices. in markets. you? that's obviously, the a of board physical there's disconnect paper bit And, between Good been across affecting lot oil that differences physical markets everyone. There's how morning and a just talk

also your gas production. wondering there's a And about crude as while case high Could There's about very exposure also the bull problem. that then, And you a talk to down natural been has crude quality. you your gas a there, -- here for lot we're going been I'm theme, of natural please? some could talk API people of shut Thanks.

Don Wallette

that Yes, seen in really Paul. driven I'll that what's on physical two are been you about prices our is the different And might going the what U.S. what's curtailment really, financial markets particular. take markets. certainly last the speaking than in assume We've Yes. in happening the to versus the that's that netback the worlds, around This decisions lower your comments so, month Don. screen. or in reading It's one.

haven't haven't wanted problems So, I volumes placing had any we place. – say, we the that we in would any faced to

the the voluntary and because but are So we may that's crude. we've call not and price faced are. market anywhere yet like coming. being offered, U.S. in had be just, Not in They curtailments they a making elections world, we for our the that that finding these difficulties we haven't here don't where we're the not situation

just on the bullish side. exposure side, I -- somewhat natural views gas don't used On seeing have. are some mean, we at that have We we the to natural the same gas least,

is mainly the side on LNG on gas side. Our exposure European the and

little production We very domestic have anymore.

Paul Sankey

Understood.

the – talk a markets do follow-up North are positioning, that positions how little a leave you and a America? You infrastructure -- Thanks And I'll how bit have you in have it as lot. around can about there. your

Ryan Lance

you're we've marketers guess and maybe do North about side side equity natural been positions oil because natural talking marketing and I Paul, the And activities. gas some gas probably side the in our both of long-haul have more on marketing. of active gas But more on both America. the well Yeah, we such

marketing generally moving lot gas our So, a But third also Arizona, the Santa West at we Permian party as Basin, own of as the West Coast and up California, out we've of well. towards volumes been equity well. move Mexico,

Operator

Thank you.

from next go Bernstein from comes Our Please Bob Research. question Brackett ahead.

Your line open. is

Bob Brackett

you. Thank Great.

the As least changed of an And has to East release, of all? forward at allocation the into read is you example, if projects capital about I development. philosophy how that? Field not in Kamunsu is your at you talk terms talk as this Can it moving sanctioning mentioned year, kind

Matt Fox

going on the Hey, Bob, Matt. The And a -- development. that this would develop is for has and KBB. we -- and because of been timing third slowed it's it to bring before Sarawak, between essentially an can recognition the sort KME issue, Kebabangan, to by KBB simply is Sabah down economic that to of we expire fact when the of satellite financial the pipeline Kamunsu this issue was pipeline license KME East party a

our just book's the asset. in treatment that were we So recognizing of

And was so and in what recognition that that this caused quarter.

second And how We the has the of in significant that say we're your doing change any optimum that facing part terms there should cost should allocating In question, it, of of I we allocating of supply. so wouldn't the capital. be be weight. our been we that should be in lowest view

yet, not significant no At our change. Bob, least so, And in that. thinking on

Bob Brackett

-- Okay. Harpoon. you on A are sorry quick follow-up on Ankor,

reservoir, in the fluids. mentioned you about Did top that? us tells sets, you something you missing clipped mention You but which hydrocarbons encounter that didn't

Matt Fox

and -- Yeah. a the but we would for not. there We these to from interpreting did top got it we the but other But the looks similar perspective more encounter to lithological have results of the hydrocarbons. sets. signatures safety information We're edge other seeing on it's we're lithological still we to two a been reasons lot finish speed wells had We drill. able chose -- program

Operator

Thank you.

comes Stanley. McDermott Morgan next from Our question go from ahead. Devin Please

is line open. Your

Devin McDermott

on on are right follow-up provided to period. bit to kind bit helpful how over the price different next asked in low the sheet analysis capital of your the taking stress an we Investor CapEx extent back the take wanted years. sheet for and the cuts or in the to competitive few a long but willingness cash is is at already thinking stress the about cash testing. sustained period what a on of few question. still seeing low point more balance if you. what was could a And the leverage advantage just flow a now balance thanks Day, of at you And quarters profile additional for detail There on test, wondering here spending to early commodity update I of that through required sheet you consideration? in just strong a -- very balance on prices but that. balance And we're balance you're sheet, become a The and Hey, further see I unprecedented give clearly than

Don Wallette

is Hey, Devin, Don. that. this I'll take

keep top think $X said billion. I balance like to billion cash operating As reserve $X $X to billion back far wanted we requirement Day the that of we and about on as Analyst felt an we at of that a of balances had we

generally it. think numbers Technically, have we feel probably the little about way same it's down bit. I those come probably -- a

billion come because buyback because not reserve -- just that our a And outlook for because probably assets next XX We our on the Operating of cash our And CapEx, six that's on little based much. of by program. month has we spending suspension -- bit quite every months. the a of don't recalculate that cash sold. OpEx to mainly lower that down number number of the is that the some we've $X reserve need capital the or

But be lower that's in we were about but November, $X it what thinking than it. billion might

to to maintain the So year, of reserve operating say, end out, those cash. we'll levels above and think still numbers be good. as we'll able are we of that cash balances pretty -- look We those think we the

don't So that expect debt would to we that the access imply have to markets. capital

Operator

you. Thank

Pavel question ahead. Our Molchanov James. from comes Raymond go next Please from

is line Your open.

Pavel Molchanov

Thanks question. for taking the

involuntary mentioned to which any shut-ins Plus ago, part were Indonesia, Norway of be of minutes few having are You the OPEC may you have agreement? in a both or going

Matt Fox

think Pavel. They half the about that, would a cuts. in did, you OPEC second day curtailment in announced Yes. the barrel of a I and it XXX,XXX be participating as that they saw We XXXX. announced in June Norway was, today, just XXX,XXX, for XXX,XXX I'll take

likely in and are so our of in likely we're working to So But impact that, business. complicated -- some to we of have that a be to there's way they some Norway have allocated Norway. reasonably working

digits of the of for the at accelerating it for is still being changes be year, regime terms barrels through will for us. made average to depreciation low the Our interesting a year estimate tax in the moment one for rate will And the in -- impacts the be it day some single year on they interesting But schedule over are there, the also to one the most capital. we that. and working our

from a was that smart would you response expect. as pretty the Norwegian government, strategic So

fixed In terms prices We the of domestic market; Indonesia, I the think commitments. you Indonesia mentioned to Indonesia. are in and most gas of sell take-or-pay

So we're Indonesian by support not any group. going Plus to to be the OPEC affected action

in but will and play government Malaysia, of yet we to may some we to extent know out. details participate announced the be So affected don't going Malaysian are the has that that how they

Ellen DeSanctis

here Apologies just up So Amera, but our we Ellen. going I'm one it this question. participants, wrap with is the We're more to close getting ask that we'll more. hour, one of top so take to the to

Operator

Thank you.

go question last One. Johnston ahead. Our Please from comes from Phillips Capital

line open. Your is

Phillips Johnston

Yes, thanks.

in XX consistent to has over quarters several range. pretty last XX% been mix the oil XX% in Lower the the Your

you environment. mentioned, you this aren't planning completions on well As any in

from significantly is, lower shift? naturally existing that look move volumes move you to question expect GORs oil So to without we just my as if your XX out, range months higher offset wells new mix mix that to X would any and

Matt Fox

be it And but shouldn't and the significant. modest some GOR, significant. through in shouldn't may Phillips, that, that we have the but some Bakken year, the be be production go Eagle with that there'll gas increase in it Ford, Yes, increases there declining in ratio Permian. as the there over We'll the be

Operator

turn questions any Ellen call Ms. would to Thank DeSanctis. over showing not to at time. I you. this back further I'm the like

Ellen DeSanctis

Thanks safe. and queue, we Thanks If listeners. our your anyone -- the to back our you. stay left excuse participation, to in me come for thanks and we'll --

Operator

This gentlemen. Thank concludes you. participating. you And thank you, ladies for Thank and today's conference.

disconnect. now may You

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