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ConocoPhillips 8-K Report, Financial Results (May 2, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed May 2, 2024
Period End
May 2, 2024
Security
COP
In the record · 2016–202610-K1110-Q338-K108

COP filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 108 current reports (8-K) between 2016 and 2026.

  1. Impairment8-K · Jun ’17Jun ’17
  2. Deal closed8-K · Jan ’21Jan ’21
  3. Leadership change8-K · Nov ’22Nov ’22
  4. Leadership change8-K · Aug ’26Aug ’26

01—Abstract

Summary

Summary of the 8-K filed May 2, 2024. Cited figures are marked; the original filing is the authoritative source.

ConocoPhillips (NYSE: COP) reported first-quarter 2024 GAAP earnings of $2.6 billiona, or $2.15 per diluted share, down from $2.9 billion, or $2.38 per share, in the year-ago quarter.

Excluding special items (a $66 millionb after-tax gain on asset sales and a $76 million benefit from a Malaysia investment tax incentive), adjusted earnings were $2.4 billion, or $2.03 per share. The decline was driven by lower realized prices ($56.60 per BOE, down 7%), higher costs, and higher depreciation, depletion and amortization, partially offset by higher volumes. Production reached 1,902 MBOED, up 110 MBOED year over year, though only 2% higher (43 MBOED) on a pro forma underlying basis after adjusting for acquisitions and dispositions.

Cash generation remained solid, with cash provided by operating activities of $5.0 billionc and cash from operations (a non-GAAP measure) of $5.1 billion. The company funded $2.9 billion of capital expenditures and investments and returned $2.2 billion to shareholders, including $1.3 billion in share repurchases and $0.9 billion in ordinary dividends and variable return of cash (VROC). Management reiterated its commitment to at least $9 billion of planned return of capital for 2024, and all full-year guidance was left unchanged.

Ending cash and short-term investments were $6.3 billiond, with $17.3 billion of long-term debt outstanding and a debt-to-capital ratio of 27%. The board declared an ordinary dividend of $0.58 per share and a VROC of $0.20 per share, both payable June 3, 2024, to holders of record on May 13, 2024.

Second-quarter 2024 production is guided to 1.91 to 1.95 million BOE per day. Operationally, the company highlighted its first major winter construction season at Willow in Alaska, LNG progress in the U.S. and Qatar, continued ramp-up of recent international startups, and record production from the Montney asset in Canada.

02—Key points

Key Highlights

  1. GAAP EPS of $2.15 vs. $2.38 a year earlier; adjusted EPS of $2.03, reflecting lower realized prices, higher costs and higher DD&A
  2. Total realized price of $56.60 per BOE, down 7% year over year, while production rose to 1,902 MBOED (up 110 MBOED reported, 43 MBOED or 2% pro forma underlying)
  3. Operating cash flow of $5.0 billion and CFO of $5.1 billion, with $2.9 billion of capital expenditures and investments funded from operations
  4. Returned $2.2 billion to shareholders in Q1 ($1.3 billion buybacks, $0.9 billion dividends and VROC) and reaffirmed at least $9 billion of 2024 return of capital
  5. Declared $0.58 ordinary dividend plus $0.20 VROC per share, payable June 3, 2024
  6. Q2 2024 production guided to 1.91–1.95 MMBOED; all full-year guidance unchanged
  7. Balance sheet: $6.3 billion cash and short-term investments, $1.1 billion long-term investments, $17.3 billion long-term debt, 27% debt-to-capital, $0.5 billion of debt retired at maturity

03—Questions

Frequently Asked Questions

  1. Why did earnings decline year over year despite higher production?

    Earnings fell from $2.9 billion to $2.6 billion mainly because realized prices were 7% lower ($56.60 vs. $60.86 per BOE), costs were higher, and DD&A rose. Higher volumes partially offset these pressures, and a $76 million Malaysia tax incentive benefit and an $86 million pre-tax asset sale gain were included as special items in the current quarter.

  2. How much of the production increase is organic?

    Reported production rose 110 MBOED, but that figure includes acquisitions. Excluding closed acquisitions and dispositions, including the remaining 50% working interest in Surmont, pro forma underlying production grew 43 MBOED, or about 2%, year over year.

  3. Did ConocoPhillips change its shareholder return plans or guidance?

    No. Management reaffirmed at least $9 billion of planned 2024 return of capital, and all full-year guidance items remained unchanged. The company also guided Q2 2024 production to 1.91–1.95 million BOE per day.

  4. How is the company's dividend structured and when is it paid?

    The company declared a fixed ordinary dividend of $0.58 per share and a variable return of cash (VROC) of $0.20 per share. Both are payable June 3, 2024, to stockholders of record at the close of business on May 13, 2024.

  5. Is the balance sheet under pressure?

    The balance sheet appears stable. Total debt was $18.4 billion at quarter-end, debt-to-capital was 27%, and the company held $6.3 billion in cash and short-term investments. It also retired $0.5 billion of maturing debt during the quarter and maintained $1.1 billion in long-term investments.

04—Continue

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