10-KPeriod: FY2019

CONOCOPHILLIPS Annual Report, Year Ended Dec 31, 2019

Filed February 18, 2020For Securities:COP

Summary

ConocoPhillips' 2019 10-K filing reveals a company demonstrating resilience and strategic portfolio management amidst volatile global oil prices. The company achieved a 5% increase in underlying production, driven by strong performance in its Lower 48 unconventional assets and contributions from Alaskan and Norwegian operations. Despite a 9% decrease in average realized prices per BOE, ConocoPhillips maintained a strong financial position, with significant cash generation from operations exceeding capital expenditures. The company continued its commitment to returning capital to shareholders through dividends, which were increased by 38% in the fourth quarter of 2019, and a robust share repurchase program. Strategic portfolio optimization was a key theme, with ConocoPhillips completing the sale of its U.K. subsidiaries and making agreements to divest Australia-West assets and its Niobrara interests. These dispositions, coupled with acquisitions in Alaska, Lower 48, and Argentina, highlight a focus on high-value, low-cost supply assets. The company also addressed its commitment to environmental stewardship and managing climate-related risks, outlining ongoing efforts and targets for GHG emission intensity reduction.

Financial Highlights

51 data points
Beta

Revenue

$32.57B

63.6% Gross Margin

Net Income

$7.19B

22.1% Net Margin

EPS (Diluted)

$6.40

Total Assets

$70.51B

Cash & Equivalents

$5.09B

Free Cash Flow

$11.10B

Financial Statements
Beta
Revenue$32.57B
Cost of Revenue$11.84B
Gross Profit$20.73B
R&D Expenses$82.00M
SG&A Expenses$556.00M
Interest Expense$799.00M
Net Income$7.19B
EPS (Basic)$6.43
EPS (Diluted)$6.40
Shares Outstanding (Basic)1.12M
Shares Outstanding (Diluted)1.12M

Key Highlights

  • 1Underlying production increased by 5% in 2019 compared to 2018, reaching 1,254 MBOED.
  • 2Net cash provided by operating activities was $11.1 billion, exceeding capital expenditures of $6.6 billion.
  • 3ConocoPhillips repurchased $3.5 billion of its common stock and paid $1.5 billion in dividends, representing 45% of net cash provided by operating activities.
  • 4The quarterly dividend was increased by 38% to $0.42 per share.
  • 5The company completed the sale of U.K. subsidiaries for $2.2 billion and entered into agreements to sell Australia-West assets for $1.4 billion and Niobrara assets for $0.4 billion.
  • 6Production from the Lower 48 unconventional plays (Eagle Ford, Bakken, and Permian Unconventional) increased by 22% year-over-year.
  • 7Reserve replacement was 100% overall and 117% organically in 2019.

Frequently Asked Questions

ConocoPhillips saw a 5% increase in total production in 2019 compared to 2018, reaching 1,348 MBOED. Excluding Libya, production increased by 5% to 1,305 MBOED. Underlying production, which adjusts for Libya and net impacts from dispositions and acquisitions, also grew by 5% to 1,254 MBOED, indicating strong organic production growth.

The company generated $11.1 billion in cash from operating activities in 2019, which was more than sufficient to cover its capital expenditures and investments of $6.6 billion. ConocoPhillips returned significant capital to shareholders by repurchasing $3.5 billion of its stock and paying $1.5 billion in dividends, totaling 45% of its net cash provided by operating activities.

ConocoPhillips actively managed its portfolio by completing the sale of its U.K. subsidiaries for $2.2 billion and entering into agreements to sell its Australia-West assets for approximately $1.4 billion and its Niobrara assets for approximately $0.4 billion. These dispositions, alongside strategic acquisitions in areas like Alaska and the Lower 48, reflect a continued focus on optimizing its portfolio towards low-cost, high-value assets.

ConocoPhillips has stated its commitment to environmental stewardship, including a target to reduce its GHG emission intensity by 5% to 15% by 2030. The company is also a founding member of the Climate Leadership Council and has released climate-related risk reports. These efforts reflect an ongoing focus on managing ESG factors within its operations and strategy.