ConocoPhillips (COP) 4 May 212021 Q1 Earnings call transcript

Company Profile

Participants

Ellen DeSanctis	SVP, Corporate Relations
Ryan Lance	Chairman & CEO
Bill Bullock	EVP & CFO
Tim Leach	EVP, Lower 48
Dominic Macklon	SVP, Strategy, Exploration & Technology
Nick Olds	SVP, Global Operations
Neil Mehta	Goldman Sachs
Jeanine Wai	Barclays
Phil Gresh	JPMorgan
Roger Read	Wells Fargo
Ryan Todd	Simmons Energy
Josh Silverstein	Wolfe Research
Stephen Richardson	Evercore ISI
Doug Leggate	Bank of America Merrill Lynch
Bob Brackett	Bernstein Research
Paul Cheng	Scotiabank
John Freeman	Raymond James
Leo Mariani	KeyBanc
Raphaël Dubois	Société Générale
Neal Dingmann	Truist Securities

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the First Quarter 2021 ConocoPhillips Earnings Conference Call. My name is Hilda, and I will be your operator for today. 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 DeSanctis. now will call Ellen over I Ellen, begin. you may

Ellen DeSanctis

team this Hello, members our executive today's Hilda. you, morning of are call. and ConocoPhillips the Thank introduce welcome to on first listeners. our who I'll

Operations. Technology; have SVP Dominic Bullock, Executive several Bill prepared of Macklon, Today, Officer; Leach, our Vice and President of Vice & Financial our our Chief SVP your Ryan Executive the executives Lance, and and questions. of our We our will Chairman and Tim remarks, CEO; Global team Nick our Olds, President take Lower will of Strategy XX; make then

Before I sensitivities. material first operational quarter morning's quick this press updated few turn release, cash highlights highlights, we and earnings that a includes and short the flow supplemental over Ryan, posted summaries, In of with to reminders. conjunction a call deck

ConocoPhillips this on XXth. announced morning also We host that update market a June virtual will

date, In factors expectations. our that could save today's on we current due on Actual providing we details and release press forward-looking in based periodic call some the non-GAAP And to to in release nearest also we'll filings. call, So to measures over our make website. be refer on differ today's meeting statements the be I'll shortly. described results will and SEC in that Reconciliations the today. Ryan. this that, to corresponding some turn can finally, measure press will GAAP financial found morning's with And

Ryan Lance

but Thank our participants. ConocoPhillips. exciting you, call busy a time It's And at Ellen. very all welcome to

our every mission a like last to business. competitor value extreme as aspect to progress. to now and taking the Reviewing represent transaction the business our improve closed, our early results our strongest aspect company across from out our XXXX we sector first our next With every actions step XXXX drivers, taking of proposition integration workforce year's and the entire level. on transaction as underlying the our quarter disciplined, by to in moment improve the the a an activities again, from is did of pack catalyst shareholder-friendly We're Concho volatility in and indication of emerge

the of at to and improve plans the morning. are debt drivers synergies, are others returns, actions transformational Some we're we away announced such core such capturing efficiency chipping as as taking reduction this

in everyone what is Here's organization on. focused our

is First, a company successful we a believe one. safe

challenges Winter the for our again, combined we've And recognize continually two which Storm safety aided cost to handling I of our transaction, driving With industry-recognized their last leaders, workforce base. has our quarter. diverse continuously supply Uri the of overall presented want by lower the many We're exceptional resource Concho of the integration. to -

best progresses. asset We always isn't through enough. further We're And have deep greater focused optimize Concho into of we to which down on We means prices, lower returning remain is don't competitive a record and our the the exceeding our rocks, inventory working price. a seeing our in additional inventory driving higher free a of sustained we're only of capital returns. We're sheet as synergies structure shareholders, of time as five-year through investments flow and based above a free driving previously chain we're cash in investors our sustaining down which announced metrics and our already structure synergies down to and We're yield cost sustaining margin portion balance cash returns to and driving driving well our through to But allocation to sales. track but cost advantage. and improvements, CFO. process demand, efficiencies, significant materialize, flow on short the target benefits at sustaining as rigorous we source with capital the from of our expect sustaining lower the free a capital to of capital committed than portfolio through flow upside the improvement, benefit integration XX% high-grade combination integration, low-cost clear our well our price cash cap by very applying loan finally improvements cost supply and

fact, in shareholders since return implementing of In cumulative our has our to XX% been strategy returns-focused XXXX CFO.

not return We ceiling. to flow others on free of a doing. cash returns capital floor our level So represents tie are a our approach the don't capital like returns,

including capital directly in of higher you investors as when expansion, increase saw prices our to So occur. from further benefit in And release, taking in they actions from XXXX. other words, returns today's CFO we're

our buybacks, our purchase announced stake, on over announced to incremental that planning further years. our gross and ordinary addition lower reducing by ConocoPhillips to begin five to reduce to action next the emissions dividend we're we previously also our and debt sustaining morning, reductions. taking our We're using finally, focused $X balance stock. And we This cost ESG, proceeds leading of especially price. In reduce to intend in our we're help annual ownership $X.X sheet. billion million interest strengthen expense will in Synovis This

talented, the driving All in of workforce. progress. this They is force our are underpinned motivated by our

virtual we You in improvements release, our a from update accelerate can to XX. we're event our tell from the encouraged That's market my on that we're today's seeing the comments why intention across announced June to company. November by XXXX press

provide expect more should ago, years for and We'll can improved. on asset to stable our world to free two on our for to world, efforts also even improvements. every synergy Compared cash allocation including provide our at base goal price XXXX a price for our you for our And to transpire. our business plan also through an to update put philosophy the that our believe been part updates of foundational outlook business performance our company we and We'll volatile has that business have reaffirm plans. we years. Now the for how priorities We'll deliver cycle an the and and our what update. We'll in post of progress position reiterate but ConocoPhillips multiple driver a here's Concho. to disciplined returns shareholders beyond, and and flow capture ESG enhance years expect our is that better

As a but advantage the time to we're busy our to rather company, than the momentum for earlier, take sooner on market compelling reengage I of it's going future. said later our

let reduction call announced will plans. quarterly to level over COP well as turn share and Now me the high our Bill, address results, who debt as Synovis

Bill Bullock

certainly off cover a and of just Thanks, there's start in I'll today's XXXX. first posted items. Ryan. of few summary good we're quarter, Well, from a the a materials, In to highlights those

Production one-time the quarter. last quarter known of per these reflected performance per share share earnings in XX high Adjusted some the versus all producing and strong. earnings March end came the underlying for financial Adjusted results the were at contra-related update, in items. our positive on in $X.XX foreshadowed we the As items, financial very segments range, market first year. $X.XX was generated

CFO our free billion. quarter items, was $X.X repurchases. short-term very cash our figures the even form billion CFO in of cash we with to shown share from covered with buybacks. contra-related in of the and transaction-related quarter announced As of our about flow cash cash $X.X and both ended in impacts was operations posted flow $X.X capital, free $X the waterfall nearly website, quarter to one-time previously in CFO cash the impacts, which and include $X billion shareholders reduced billion materials related first roughly These supplemental But XX% dividend the $X.X ordinary and We and flow dividends cash in by on billion the And the billion. of investments. returned

and your differentially year upside has a capture the as because March world, a because quarter markets improved As of updated cash we're XXXX constructive the have and XX. today, globally. prices, to our And to higher full these updated going drivers result we're of a and reminder, call we the unhedged, Concho I flow key cash liquids-weighted, benefit issued sensitivities. more business price toward guidance diverse significantly we're transaction. earnings attention exposure to we in for first we provided And on to

asset, sheet sheet very leverage to announcements, Turning with a supply debt. as just of our of strategic like our is cost top to we tier view balance low due resource and our net do low balance today's we portfolio strong our

Now some flow of put of borrowing lower debt flexibility strong on gross the five net over and our given cash exceed leverage that balances flow our debt the maintaining ongoing reduce improve plan and ongoing incremental we to This cash while our position. all $X expense, costs our our overall work interest component to cash course, free free cash, breakeven will debt that are return along cash greater by structure, our create next price, our years. a returns of future to on our with reduce billion

low may advantage our reduction facilitate historically of some to coupon over debt part debt As program, our our interest rates we of total the refinance take time. and high quantum of of

address I'll Cenovus Next, announced. we monetization the plan share

a our Cenovus long-term for be always XXXX, As owner not of in today. valued sale Canadian XX% own and $X.X stated received is consideration shares we that which we billion of of to to at the The reminder, about shares. part assets Cenovus, strategic as Cenovus intend a of approximately did were we've

Cenovus We sheet position. operational has to Over the in shares recent responded begin the strategies has we've open intend believe the in taken, in the Cenovus selling looked its the tendering And years, including positive balance ConocoPhillips proceeds reducing while we our second our steps the at market to simultaneously and several to shares. the market efficiencies. commitments quarter, strength

with our position will monetize of returning Cenovus by thoughtful Cenovus and believe this both our We program, of We shares to position. sales commitment to ConocoPhillips the you intention for our with with swap measured to plan dispose would fully to expect, to end and capital well aligns our shares Cenovus as shareholders XXXX. be an

shares reduction our deliver together, ConocoPhillips our ongoing strengthen for our debt our ability consistently sustaining Cenovus both to swap returns of balance shareholders, Taken our to and all capital price. planned further sheet shares differential and of lowering planned while our

call on for the XX I'll an the Lower update business. Now Tim turn to over

Tim Leach

activity, Uri. like barrels not than a the a quick Bill. our but a for integration our XX Lower XX of the just already I'll recap to ever other day for into company impacted first tell vision production which excited the historic, Lower process. do ConocoPhillips-Concho Ryan leaders, Thanks, you XX,XXX storm the because progress of integration Winter made. quarter. months We're nothing and now a by was few we've about fast-paced more Overall, of about great from Storm because short a I'm the the of and only quarter, And

tests in per BOEs from companies XX March. passed XXX,XXX of Lower Lower They can region. clearly production VX heck level with efficiency cycles, we XXX,XXX XX, but which business, executing the by the to the combining the we to quickly and in test rigs, we're damage also innovation The facility in we're From barrels price organization our the XX completions. cleanest XX should four market, achieve We and the Lower also Permian, numerous the about a lot Eagle industry. we Ford. storm play doesn't day, two continue entire than the the It successfully electrification while a the twin Bakken. wells, both base we seven across colors. Lower excited pilots My industry additional the mention and in frac first exited the negligible, attention, with is, in that It flying for resumed frac of the was spreads, gains. conducting production that highest and including a had on spreads the to of role is was during front. quarter drilling the Lower Eagle of yield perspective, XX point five supply expanded and a for our differentiated Permian the quarter However, the executed several was the Ford. the the scale future experience in in company Permian is in frac a the in XXX,XXX innovative Eagle ConocoPhillips, includes execution XX get that and can efficiency wanted in and cheapest, And size the XX of XX,XXX making Ford our more I Total navigate lead XX quarter,

production of With the of and grew to the about XX be the among half producers. domestic ConocoPhillips Concho, acquisition largest Lower

in the of assets, in high low base oil of set core We world. have cost positions up quality with premier resource a tight supply made three a of the basins

of sustaining contribute of to drive maximizing priorities Our flow our primary Lower down is a our our on capturing team capital machine through ConocoPhillips business its strategic efficient and combined XX company's to toward capacity. and the from focused operations the that We're more cycles. both will the advantages free cash with goal deliver on creating make Concho cash massive generating ability

operations. and I we than opportunity with the both couldn't opportunity this unachievable and to We which that new their made together a with leverage out embraced happy the we even ConocoPhillips of by both team, experienced recognize us knowledge we of best a have level of the value that for companies of priority initially has challenge more heritage had largest to on I'm leadership both it of are the leaders. bringing from the base to this, elevating All and say either to and more organization seeing own. going people consists creation expected. be the working quality on pleased company is combined very closely Lower the come ConocoPhillips XX starting work Concho

we to improvements our in see continue well fact, substantial cost. In

additional have for eyes on less. more We get ways our to

the supply to together deliver. chain drive optimism and XX opportunities drive is the well to cost. margins, global I our want our to plan commercial Beyond working a leverage with identify as what working as sense leave improve of down in Lower can to generate strong and our scale about of opportunities team to efficiencies you best development hard operations,

of We over in provide are detail forward our of extracting value deal, fully at to rest to providing the dedicated I'll the the turn operations update. our market call now, status world. of full Nick and midyear the the this looking And to I'm to more

Nick Olds

Tim. Thanks,

global our there's of in clearly per speed significant XX on achievements that opportunity about generate significant a business, and day diverse Lower While the businesses this independent ConocoPhillips our activities has from over to company's we our cash lot going we because the peers quarter on underway to a have you I'll take million also the XX% some International and Today, businesses believe free X.X bring barrels our first advantage we flow. Alaska of globe. comprise operated around production. recap up have

construction to day, has budget, also significant at So costs X final and project leverage a our construction peak facility starting expected we day and about progress several that finish over production project approximately the in Mooses Alpine of be months, below I'm Greater third made pleased past Alaska, and as Tooth report are XX% by this of year to The existing XX,XXX barrels we the on online a a extended barrels XXXX, and will we season. rig. our After is activities activity the We're low Western with end surface XX,XXX the infrastructure. play new at us suspending Slope, in supply North wells minimizing Alaska's will drilling development to resources, Slope. reach drilling drilling significant allowing feet, the in rigs while drill disturbance. back XX, role accessing ERD excess to The rig base virtually all XXX of business, across augmenting on restarting commissioning four assets In restarted are operated CDX our Alaska. in in that cost

very is built we've an base it's XXXX. Willow. momentum of well Alaska been strong coming course, So and And business a out of quarter eventful performing our for

on a me where stands. you Let give quick that update project

portfolio, We continue but The resolved. barrel until significant the at make legal final competitive been to been remains design and that decision very same oil to investments we recently engineering in lead work, the our litigation have taking time million the take raised. risks address or front-end progress discovery the won't while have XXX investment challenges long actions

by incorporate we four a last the doesn't reduced Canada. but XX mid our development pads. We're our moving we get optimize is over drilling from XX% acquired lot the external part currently costs Montney, resource Lower first plans worth it's to our acreage leveraging expertise of of year. This a to noting, liquids-rich and unconventional Now that's to At of continue liquids. day, barrels yet, XX,XXX business produced attention approximately which XX% an Kelt,

XXX,XXX we're Surmont, fronts. reduce these acre future At our three and and take this to all on excited improvements we in seeing netbacks position. actions encouraging reduce costs, continue improve We of be continue about premier to to unconventional emissions,

Canada of opportunities. business, important and summary, an a curve upside in remains with learning lot of quite part So our

we've Middle our advance the we the our East and it moving and performance We're interested several implemented by opportunity. cash on completion assess on Africa progress Now work at discoveries and good project and participating decisions Norway, projects, of government still Norwegian deliver continues our Kobra to We're final investment Gecko fiscal Barca incentives strong very free very this this North Port made to nearing both later Europe, if framework. make in continues from Slagugle. Field and Alpha asset to continue which of East flow segment. last benefit and financial In to generate the X are and year, our expansion In year. track recent to Tommeliten Qatar, fits North our QGX evaluation on in

So posted we'll plays out. as keep you this

be down expected to on $XXX first is million Asia well. million company barrel brought the XXXX APLNG cash distribute Pacific the almost running is Production extremely the has per combined quarter in quarter. $XX costs continues second breakeven on into strong, financing distributed in Brent. to about when focus to and region. operating APLNG capital, to ongoing the with reducing which of and $XXX Moving our

year and Malikai first various Gumusut have we several on low this oil high cost Malaysia, achieved project are X X in stages margin and supply, Phase late of XXXX bolt-on X first for respectively. Finally, Phase oil in SMP 'XX, and of development. The projects Phase at in track

cash that underway will a lot update generation. In continue exciting we operations. to summary, our of that's global brief free enhance work of flow So a have

it for comments. Ryan Now I'll to closing back some short turn

Ryan Lance

I to XXXX started sector sharing get June wrap looking Difficulty] leading again on that you team. with me forward part an We're how To go means this [Technical and back opportunity a more continue to Difficulty] catalyst to as call. every the together Thanks, today's improve we're on let company viewing further and the own right. for aspect of as to of [Technical and business up, our shareholders what XX. we when the All that

it that, to Q&A. with now let's So open up

Operator

from have Goldman from [Operator Sachs. you. Neil question We Instructions) a Thank Mehta

Neil Mehta

in congratulations I'm him Good X, team he's Matt's if day, the their I I promotions. retirement mistaken, his think and morning, so May somewhere, well if was on last listening from and mountain not to everyone wish

Ryan Lance

Thanks, us. listening. Rest Greeting assured, probably Neil. he's

Neil Mehta

is first Well, Well, around Synovis. good. question the

So Ryan, couple you ways, sale. could do this the end approached And this, XXXX. have a block it different a to in of you certainly through elected of

selling billion So was $X.X incremental billion, billion the shares, will already optimal market? here, - $X.X a the into the to so housekeeping as But shares talk you this you're right? $X.X to that buyback the this about And a So be why got would to thought this just there. program. baseline way this So annualized questions two Synovis announced? release is question this you've supplemental the be you

Ryan Lance

handle on turn color little Neil. Thanks, one for you why, over bit Yeah, of last the maybe exactly a let Bill me it to correct. Yeah. first, know, you're

owner ways on over shares. of kind that back. the back little under of color last this of in. or the $X.X we've of is And give buying Let So of been we ask ConocoPhillips terms top earlier incremental buying this were and lots number why that the of we our you this, the in different And as of our shares now plan. shares We've have Synovis swap me dividend of billion bit doing Bill of on an to sort why paying. for that Synovis currently at a of We billion announced we're course looked years we're $X.X shares

Bill Bullock

Neil. morning, Sure. Good

Synovis Synovis holder mentioned, the to We said over market long-term as shares discounts back that. voice to didn't of the with ratio Synovis we've for level. think So did - COP we've look of COP as at announcement, exchange several due with open we positively and has responded we recent to think a the that time be I transactions. makes the intend market so that shares shares. us and historic type that methods. most for And and Synovis at the And block We more sense sales, considered mentioned, block s exchange the Ryan associated we always of a looked come really open to

this and to balance on, shares, back monetize the an COP see to don't which give sheet, we gets value, one, on value three, we upside So that into as the to, an like lot a asset opportunity think shareholders. two, which trade we of

Neil Mehta

That's but Thanks well side big is, picture for color, macro provide thoughts Bill very some firmer, second and is can the the you is supply guys like Yes. It are still And on if recovery. the responding prices here. seems the certainly clear. uncertain. demand

from price well that's and how the about natural - thoughts are the gas firmed recovery? side natural side Ryan, on sustainability So as well? Brent you outlook thinking of global as the gas Any here as the nicely up

Ryan Lance

Neil. Thanks, Yeah. No.

view is at OPEC at continue We Group, the XX that supply still the our XX as day off of million due barrels largely levels pre-pandemic to demand. Spare out a Plus. number we OPEC laid you side, it's plan with macro, on the or of the exists execute million, capacity described, peak of year, still of to and kind the beginning at demand kind to of largely the

view still the we out spare a barrels kind of day X So of supply in X million, world. million

what have see on of call a And still we we need before tight in do balancing is where that we the to out say, going price the time. So forward. US point that oil kind at falls

think it's stay now the right and change. we So of not kind prudent course to

our We to want whipsaw programs. don't also

with portfolio stably XX. in executing here on to lot we talked the doing programs want our what across Nick and and Tim we're the US, the the about emphasis So a in of efficiencies driving be global that Lower

doing gets we market any all before the as that, differences until well. we're watching make So it rebalanced,

of positioning market we're kind phrase. we any ConocoPhillips think for So that enters the

with price, a kinds either of kind be recover. of to react of to volatile bit markets. those it's uncertain quickly sustained positioned to that's to be more or going it we're It's So sort one and going of a if if the to is demand, pandemic the how stable going

we Now level. an if recover. going of annual demand average, to year. this probably a you so of demand day to expect that X XXXX or think we hit million ask us, And We barrels on we a kind be believe at it's later

back that the So really value we and to point a our shareholders. time, to balanced the shareholder would that. five enhancing like cash hope to proposition we our is demand our of market described. it's today's to And hopefully, in again, that and over at XX% delivering XX% remainder the year is announcements the the you And on pretty supply And delivered look years, is of take but firm see going see floor. we're But you our from perspective, this back money last that. we've

matter. that's all matters and returns So we're And what discipline about.

Operator

comes Thank The next from Barclays. question Wai Jeanine from you.

Jeanine Wai

good Thanks Hi, … for everyone. good questions. morning afternoon, taking My question our is First

Ryan Lance

morning. Good

Jeanine Wai

guide billion $X.X CapEx. CapEx the was full first My on year really X.X. about is QX Thanks. And versus of question

average quarter the So that implies a billion a over rest little $X.X on for year. the of

new steady state is is the [ph] understand the to that throughout we trying an Concho stuff. the progressing QX But noise activity know at now of And appreciate Plus the ramping or that you [ph] we all? just but And outcome to year, based then and we're how Conoco it's we so Conoco see can production other Excel do that. mix? rest and hard outside do get of for and CapEx a weather there's ratable better of on number in that in the if sense

Ryan Lance

that what down Lower yeah. a time. we little quarter as in drilling - And too a kind had reduced the shut we winter you little a yeah, of people weather of given exactly period of low, cap to then things XX Well, that bit. that Jeanine, react a described was for in kind bit the season a to the had first artificially impacts forget Alaska the

want our done the can't you efficiency teams would take about. just as provide update ratable, to with the we've are times can. to driving of update We we greater And get June We'll say the precious more is trying and this designed that those four. asked capital of we teams talked to programs. go our teams trying really the that We them interested we effectively just see the doing at programs a whipsaw in the an the efficiently year year. basis of scope drive more the at that execute set beginning But to update not designed the an and year we'll in execute out stable. beginning I much the and and quarterly dollar to that it's we around progressing provide as on and thirdly to first run So not quarter But the in of that June. programs

Jeanine Wai

great. Okay, got And update. for debt We've our the that allocation. just enhancement, is wait We'll you. on Thank target. dividend, balance capital all sheet question reduction second buyback, CapEx moving on pieces

billion the I amount little target just how picked you years? And noticed over exceeds about coming in to a that talk bit that's five you could maybe the $X more So time. that

is we back need how target gross you. that Thank And on really designed perhaps? a outside have So trying to available we into maybe return much well? we're allocate cadence as debt I something just to guess, that now cash

Ryan Lance

sitting looking cash at the of looking looking the sheet on pieces it. at shareholder. talk those balance the Jeanine, the Yeah. to just back haven't would all my let I about say, sheet, business. about Bill is the Thanks. remarks forgotten at we specifically the We're can looking I a And opening piece debt. at the that of balance portfolio, every we're we're bit, and we're

doing on that Sonova we're today our in that already. announcement the that's trade saw [ph] to you the with If with shares $X.X the ConocoPhillips incremental and again

$X color billion, Bill, why more you ask me he can on little Let five give bit a years. why

Bill Bullock

Good Ryan. Thanks, morning, sure. Yeah, Jeanine.

you that's with, fact, Concho first it is to $XX than Concho does you our consensus coupon both have had billion from under know, and our our And as increased to legacy heritage So in net gross this the sheet. debt company. at balance this billion. But combined would one times And out we really Conoco balance CFO strong know, our I transaction there look on sheets what some so materially debt debts we $XX less peer start just heritage group. high

So lower breakeven. think what the of you about about our think ongoing we XX% That would to of over maturities our is unique bonds, billion? retiring why flexibility When our next cash We our greater to maintain reduce all bond be We've than right ongoing natural free flow in $X for the five that now. debt returns interest supports and ability billion this think shareholders. in ladders got structure, returns, opportunity it $X and of creates our greater improves certainly years. the

So that early retirements be with over repurchases optionality. do public that's perhaps And years our five gives case efficiencies and We all is the allow you to favors accelerate reduction of us us some that billion be a or approach if market conditions, but take bit that that and and see us the the market that can $X and combination may moderate advantage base earlier. to the the case. ability that do in supportive of a think you see our that in with open us taking market to going tenders, will flexibility of refinancing,

and we why billion on basin on looking structure, debt So [ph]. got that's the we're of $X a context how bit at bit our reducing a to

Operator

Thank you.

from Our JPMorgan. next comes Phil Gresh from question

Phil Gresh

Yes. Hi, good afternoon. suppose… I

Ryan Lance

Phil. Hi,

Phil Gresh

As of to a Jeanine question. bit a follow-up

the cash save want Perhaps on Day, cash the there's some commentary, in you this allocation? you know, balance but available of for of be between the shares. level and billion would Sonova $X gross you're to sheet share paying of that debt high could You Analyst a any additional if and flow cash excess lot the down capital free

Ryan Lance

Phil we'll yeah, the gives us time. see what Well, market over

deal in market There's described You then with market There's cash. say cash sheet. back we volatile. we of hold still we volatility the cash think like be XXXX, the you some to how about going November the on the and strategic some would balance the well. to as - And operating think quite that we the cash we reserve I know, to to is

the our about some you I of shareholder fully Malaysia. What thirdly, of know, the any see us done thirdly, it's, what satisfied, of a about we're We for [ph] experience - Willow. had cash prepared we on So some in. Norway. exploration of we've think do want market this in company. sure market we you successful be discoveries that we And are but we'll calls, whether what - based that thinking make at might we Northville that's ourselves if we'll be to is gives then as some past to We expansion. and say hope future successful kind would And find in the should the

to will might of some of shareholders. our go those that from some the that can to cash and the such that all distribute that we to well, and out the see So back getting sheet as free reap cash flow balance that we're projects on company continue you annual benefits the to

Phil Gresh

it. Got

be comment a discussed just potential would as Alaska, to at target one XXXX cash trying still around today? follow-up the should Analyst then, down Do Alaska. about that sell Alaska, source made Ryan, you Would you question My if as in, be Okay. be a do what you glue still? And cash that levels. of How another of I think certain Day. portion minimum you about could

Ryan Lance

in. think Concho ourselves portfolio that we're sure make through answer at commodity some is we're your I environment I the still to the and we're the question, marketing the potentially kind more looking we price opportunity Phil, Alaska position. direct But think, broadly, with grading of of high continually of yes, acquisition, take Well, more broadly, find to going the

in $X say positions, that think and various first, it is - a reserve think not happens of the kind cash have what - of the we with to our billion of in more I market, the consistently. cash which we cash, $X as couple came dollars From of keep on So June [ph] about billion billion running We our billion in $X programs. of respond. we'll to And operating programs near SAR - well. can can

on cash So that we to that. have are do which And want of to for I then, question. first top your that, have the in there described strategic uses cash other we

Operator

Thank you.

comes from Fargo. Wells Roger Read question Our from next

Roger Read

morning. Hello. Good

Ryan Lance

Good morning, Roger.

Roger Read

getting made try it's in aiming the you're the here, were for you pre beaten to would but it other one Concho changes 'XX, appear I going mean, looking where thing here. guess, debt debt. back structure you lower hard of a I the I'm on acquisition, pretty to level

It you breakeven the there overall of seem as bringing expense get a debt, refinancing You that. would down. could mentioned, by and component the lowering interest

was curious, as that billion? goal together, can kind seen debt all it But about you reducing I as capital your think I allocation, fit of part how way. just curious, So of was of it, as a by $X reducing just the to granted return be shareholders,

Bill Bullock

billion that. is maturing over This reduction of $X debt mentioned take towers. $X got as we've part billion just Roger. I Sure, Bill, about Yeah, years, our five I'll certainly, that's naturally

of restructuring to are a high at with decided how reissued purchasing we debt is factors just will We and our debt with steady certainly, progress the $X high in. on combination of approach debt, overall And the but that absolutely cost a to of refinancing or like of refinancing we a billion, portion debt on it's considering there, think couple But to targets. repurchases. We our possible tenders just some you're refinance. retired of absolutely out path by and and including market our a coupon depend in that some make refinancing component our looking and it open public could reduction our coupon portfolio works debt. right; But debt I

Operator

Thank you.

Simmons question Energy. Ryan next comes from from Our Todd

Ryan Todd

mean, mean, about to for about level adjustment a capital long-term bit? the of you a used kind and is to of you a is, right kind with billion billion portfolio, Great. what capital of to there to year think the portfolio, do what pandemic we addition emerge estimate are onshore maintenance at CapEx what from on an have you I level, I Thanks. higher little Concho efficiency of the a you the of and Maybe think as seeing And the longer-term any to has spend? as spend? been see Is $X You capital $X talk normalized - of kind way kind the rough that range.

Ryan Lance

about in our what and sustaining would breakevens breakeven. in an me and there to drive can just around with I the saw Ryan, Yeah. that, premature lower the constantly We'll Nick's synergy that talk we're you in doing you be back XX, update lower the I capital, a are in of tell kind for It'd June the down all that those and about, that. academy. But doing about relative to things to and the We're lower in XXXX. And be provide the talking trying CapEx, Tim lower you rest we talk manifesting seeing lot think, if like. of themselves sustaining globe. lower we're of and goes capture progress what

Operator

Thank you.

Research. Silverstein comes from Wolfe next Our question from Josh

Josh Silverstein

Hey. Thanks, guys.

this last that's on what year all place Alaska. about program. drilling COVID-shortened and I know the you a activity to timing with with And the the again, happen just then, forward. needs Just there that Can taking talk litigation exploration was around progress year? to -

Nick Olds

I This Josh. is I with yeah, Yeah, Why start Nick. Willow - don't apologize, Josh.

Willow. with start me Let

That's reducing in year. detailed First, focus - schedule taking That's this and all target. related the engineering. as prior engineering the and understanding development front-end later mentioned, the to big to FID I is as ultimate this capital, considerations related the year our design, well as to

got are by for decision record a the challenging federal the BLM lawsuits project. filed for and currently in groups, Core that two environmental court reminder they've Willow the of two the group, Army As

Willow early for as January. had you recall we As construction well, received XXXX in also all permits the the

continue granting scope very deferred of float XXXX of And all Josh. Circuit the see, into that have a XXXX. gravel injunction small, projects, However, due modest we been Ninth activity, work, the has as schedule of which scheduled Appeals, or Court by to to the was

impact line. won't overall that the time So,

the lawsuits, District mentioned, anticipate third want quarter. by support. addition decision we a to focus the stakeholder I just that the we Court fee also In now the have mention, significant active merits to and relates I in just to primary the of those

As an in North BLM got and supporting court intervened the the Borough, record Slope decision. example, court State of BLM the case the we both case Alaska have supporting

The any Village as until not finally, And make will investments letters sent also such or the lead the of Willow needed. We to Secretary Slope significant tribal as organizations, councils adjust last I'll and opening the my take part opportunity, have is FID we investment we of Interior. thing have litigation pace been project time the of to and who addressed. Congress great support just key and flexibility have of reiterate strong long remarks, if a risks several North have

Operator

Thank you.

Stephen Our next question comes from Richardson Evercore from ISI.

Stephen Richardson

today not could bit it, you of of as preview - the this little as catalyst of kind think relative if you you wondering moment to I at to been. the a seem update. it but would the updates in asking one time the differences of ever was a I it's XX these June that of last probably portfolio was one you big to expand Ryan, us you. idea I'm is predictability on better XXXX contemplate that Thank your ConocoPhillips Hi. did than just

the targeting wondering that informing kind that's how years? externality, predictability was quarters of your acknowledging out predictability, of think bit a and term little a but internally willingness So, the could reflect of or of maybe longer to than still big the you is and a price oil if on couple more even kind I you of business see couple

Ryan Lance

you're right. Stephen, Yeah,

Lower - a gotten too. is of As is the XX - say in we good, in opening shorter production the is said business predictable. remarks, the cycle world place terms where and lot pretty we've the a I of understand today the company But that is I'd in across nature half the running business base we whole to wouldn't

so, over and the like And prospects haul. well, look long the obviously, what we the really understand portfolio

aspect want today. catalyst convey in every about we business. It's the the to You moment, it's really talked focused of what

the balance the to about back shareholder, about the efficiencies We post Concho we the acquisition. talked talked talked we gaining about system, sheet. the that returns So, in we're

of environment, really company be can and both. you returns still every working to us count in operate can but So, can this on capital, and and business the the out on count on shareholder, on still not company disciplined you the on the only breakeven best of returns, that capital, we're back hyper-focused trying to and part, volatile very the a lower in

We on on. focused a and portfolio, June, free in what know flow we're that's hear you'll what on on what the that's that, returns, whole on more It's every work think across cash company lot we're I and So want. doing investors hyper the what lever. work

Operator

you. Thank

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

Ryan Lance

Hello, Doug.

Doug Leggate

Can me hear you now, Ryan?

Ryan Lance

Thanks. no, No, you, we've got Doug. Yeah.

Doug Leggate

Yeah.

I seems dodgy So apologize that. for headset. got a I've it

So if to value little a between of essentially buyback between a implicitly like the ultimately here himself. the up to like to going little be But I'd two. flow, about to your bit company. value of because frame also, afraid, it cash Matt's I'm those Ryan, free I'd on cash of you the but kind defend think - the here, bit Then as a your some view has the on and value is balance sheet equity, unlevered transfer free not decision

into where how be low the do wanted variable kind debt up I'm story. clearly, the to, you you take and of dividend would of before step you prepared potential So to $X.X could because fits billion more buybacks you curious again if a the lot that

Ryan Lance

- were we those I balances. all a do I Yeah. there right, make understand how Doug, up breaking you If sorry, bit, if but question your little

bit. at time a little gum same here the we're walking think I and chewing

all So on portfolio. working we're of the aspects

reducing I breakeven business, to and focus the to which on on lower breakeven, the of is trying is our capital work lower our lower the operating sustaining side think the the over us interest taking reduce giving expense bringing of in addition and coming debt time. options that to high this that to out what's callable it forward, coupon by some and take

the So we're greater over commitment to do I made I And think time. shareholders cash is to trying or going to we're to our that return XX% of think you back things. we've all basic the

do So that. will we

keep absolute creates it vehicle reduction balance studied in bit. and But think what eye do accepted little the in I the share doesn't I At and or that want said, end CBDs the per a and dividend, more it in. time spend of Mathematically, one there's lot But return XX%. that about And We the we guess, thinking you hybrid to metrics our We'll was that to we've in part the vehicle, the a way whatever dividends is, the is not future, makes with the your we're the around call be. to the are think That's, the deliver variable we that today, it really than shareholders. There's the at it. beholder shares to the great in path a day, a right to returns to the our matter. done. looking If value. is committed they question commitment like do going given and the way it of not that forward. - of what's to we them back maybe could of shares the Now it. that right

conversion think we and to back more solution is ConocoPhillips from this - elegant So an CVE to to shareholder. shares get the

So we're committed to that.

Operator

Thank you.

Our next from question Brackett comes Bernstein Research. from Bob

Bob Brackett

at modest a congratulate we Or And like meeting, been on around my and ask maybe we XXXX the retirement. a like as XX Should Virtual intelligent least a more update? June in I'd asked, but XX-year Most questions XXX plan? expect of slides, chime expect his well question something Meeting. plus Thanks. have to should Matt the of

Ryan Lance

Modest update, Bob.

Bob Brackett

that glad there for clarification. was but It bit lot on felt questions putting and burden of a you all, a of

Ryan Lance

question, we Yeah. Appreciate out the get Bob, clarity there. the

Operator

from The from comes Paul Scotiabank. question you. Thank next Cheng

Paul Cheng

Hey, guys. Good morning.

Ryan Lance

Good morning.

Paul Cheng

by M&A a on at believe the to performance Ryan about talking your curious on is in new the the the has do perhaps comparing you bit is second organization industry ready now the and commodity or opportunity consolidation look half. The a we you you much that the today million per still at I higher X.X that to based think of probably that position on that and that basis better X.X that than be team, ready changed? integrate maintenance question is the the your to the quarter. that take stronger that arise second trend roughly peers production is how you essentially would a half consolidation you're say, fully on or think just has stage, also - little to when year when that day, of midpoint on think quarter will, to conversation that full second downtime, second prices you take in asset capable that barrels Concho are the the year and much And over with opportunity? trends share that when have that assets? you ago, the guidance first But okay, a some when Do other

higher not So half the production is gave? reason than you. second year full X.X that supply be that why barrel the per Thank the you million any day there will or

Ryan Lance

Paul. Thanks, Yeah.

I M&A. question, one if first your think and was around understand consolidation I

of going focused the and efficiencies that think integration the and the is there. right I story referred those kind you in Concho, earlier and And more deliver we're best and now hyper We synergy. most with and to on on this and the still updated $XXX trying And activities pretty year, practices that see of supply to we good focused is the commercial synergies to million chain. in capital avoidance pretty opportunity. in all

we'll So, focused we're an that, update on and really give June. in

the and are sure job Concho making with we great doing the get in. is assets focused So, Lower on in on his XX really efficiency side. team we the integrated a Tim

the manifests performance and production despite from the company the it in impacts itself quarter performance of Uri. first the having storm think in winter I in the

bit. We coming. year rest the do comment we So, the of maybe in can some - profile, I'll turnarounds have - a do have for little Nick

of last I last that, which to question part three half, refer look Nick what of that second let like think, the in around can year. the I the for profile quarters does So, your is

Nick Olds

yes, Thanks, years. the turnaround prior the Paul, quickly, are consistent with Yes. impacts very Okay. Ryan. just

XQ, XQ. but in more Our heavy even turnaround so season is in

in higher So, look barrels greater barrels again, as at you Norway North in Slope see if look our assets work. mainly day, maintenance downtime. day And XX,XXX if XQ, as so oil you a a mainly this we got Western bay, well crude it's XX,XXX that's XQ, about That's about crosshair. And you at Alpine XQ. maintenance

And our XQ, and that guidance. has XX,XXX respectively. XX,XXX been XQ, So, included in

Ryan Lance

you and more surprised I that is fully take is I prices, clearly, Paul, answer occur. needs occur still sorry, it M&A I to didn't and but done if is kinds in place. needs our There industry think more think see too will players because at consolidation still many don't there think but difficult of in be our of probably your business. these to I is it question, don't

Operator

Thank you.

from James. Raymond comes John question from next Our Freeman

John Freeman

afternoon. Good

Just short following think your that up how just low-cost the the cycle long with focus production, cycle But in makes of and a balance long-term with production follow-up up. where sort benefiting has half for Lower big just a on kind Stephen's you're realizing XX kind striving on of Concho move you of the supply. had production? again, is oil company's as the short cycle question the merger, price Obviously, the uptick versus tremendously primary of you're earlier, just the

change all you Just does maybe - does on And at environment? the how think longer about answer commodity term, balance? the based it the

Ryan Lance

No, not really.

have and Qatar on long, we're interested in Lower supply. continuing continue hyper-focused oil, that we're why add cost interest and the North think expansion to to of gas I is and XX our agnostic Field operation. in pretty short, improve We're which to to in

competitive and say, don't in to just mind trying agnostic the to really we They - best focused on in deliver this the the pretty rocks. So I'd we business. over blend returns. drive we're ideal really time. We're That's have best that advantage

Operator

next from from Mariani Leo comes KeyBanc. Our question

Leo Mariani

guys. Hey,

first which noticed the versus excess be questions mid-January barrels Just Permian XXX,XXX about quarter Concho, of from very a strong. a of day math production right, up couple fourth of 'XX, quarter I looked you. for of your just contribution to I did like was closed think the was it the here Certainly, that quick which 'XX, I looks here. well in

what fashion bunch Just larger that that such production? quarter? here performance? maybe drove you trying a of saw there performance, the stronger in to that what group of a came get wells drove it maybe first on upside that in a Is the of like Was strong sense a well in

Tim Leach

down, Yeah, that And Leo. coming really of carry-on of too but projecting rate the the then of at the didn't much year. our activity. is quarter first was Tim. from with We in hot out coming This were slow capital storm production a slowed last entering pretty

you'll the regions rest on And so yeah, year. with a I think are the pleased is cylinders. of throughout the performance. as really said, was more an the - steady approach see I'm Everybody in it all But all quarter. excellent hitting Ryan

Operator

Thank you.

Société from from Raphaël Générale. Our Dubois comes next question

Raphaël Dubois

my Thank questions. for taking you very much

can tag can in The to expansion, many us this just how It you be on interest, price you're the I accept, first tell involved bit so one about about players earmarked you the guess. a with North cannot Field with get project? more willing

accept So you are to bring you? going to my be them to with first would that question, Qatar make work please. That what will

Ryan Lance

Yeah, Raphaël, our back there I commitment we're a value. and think long and I [ph] three figs it cutter-gas think train to in we've been the Qatar, goes long-standing demonstrated to project, for time,

We Qatar. have center a water in

it's you've not we've the relationship about Qataris. the to And that the and only relationship, past level, your So the with point, the had relationships had. relationship strong long-term it's historic bid about

they've been owner with. partner, a So great a deal to great

work and anybody And that our our got history there, but to just sits for opportunity on and So has in then we've it to competitive that I rely in like we the - the us. think be have bid. we'll country competitors, the

framework. has it competitive to in So our financial be

So it cuts both ways.

Raphaël Dubois

this Great. you ESG an And you question. ask by I have net-zero XXXX. I target emission have understand to

bridge will XXXX. reductions? what be use You what with - you too be to the the the XXXX? offsets us another how gap that you, you already Do intermediate be And between gave without absolute target idea much what an layer for pre-empting of you tell will in have and contemplating? will of will June, of XXXX offset Can an

Dominic Macklon

Yeah. Raphaël, it's Dominic here.

thrusts two - there. there's really So main I the think I mean,

our focus amount business Their emissions The to our competencies. technologies Scope work of Paris some on the going core much reducing about across gains $XX our launched aligned a and first in This very the to units, we have on we have and Lower sort low-carbon core team, X projects, to we world. incremental also examples in this XX strategy. emissions. X around of each is most that that addition of around and tremendous million, risk to business But support and reducing XX year, great have relevant around that's year, climate primary is our our opportunities support those by

power offsets and storage renewable operations. Scope X, include and of sources So also areas intensity areas carbon the and emissions reduce further That's capture, focus of of initial our our X use to focus. carbon are

and much to those So the areas right very that we're we looking I through expect develop that coming these years. the at think are now,

Ellen DeSanctis

take Ellen. you is if this question, We'll don't Hilda, final one mind.

Operator

Neal Thank Securities. The you. from Dingmann question comes Truist from

Neal Dingmann

last got talked that Thanks repayment you've either we've the assets portfolio? for other Tim, Maybe the Would still of don't I from even that me think is very area. Bakken, for was you're most size a and forward pertaining or year obviously, question so. squeezing in. portfolio, thought I you've a bringing some to international - My any smaller Bakken given sales or large you Lower seen mentioned, debt given my that to outstanding a or recent about thirdly entire and noticed one just massive question all about in in the value is Tim I that just you was forward looking, rigs your think any running XX doing, your

Tim Leach

over I Neal. mean, Well, everything, we're looking

for and the I think in that we in And not portfolio. sales. right globally fact the reasonable market with here sure post So to it's make now that competitive a every the US, transaction on the Concho, asset want is we're lost

So June. you'll in that hear more about

Ellen DeSanctis

Hilda, ahead up. go we'll wrap think I and

don't any will I you and time closing June. mind, you give our everybody's listeners attention. I in see instructions. If appreciate

Operator

concludes We today's gentlemen, participating. you. conference. for this Thank and thank Ladies you

may disconnect. now You

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.