ConocoPhillips reported first-quarter 2024 earnings of $2.6 billion, with adjusted earnings per share at $2.03. The company generated $5.0 billion in cash from operating activities and distributed $2.2 billion to shareholders through dividends and share repurchases.
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ConocoPhillips Wells Drilled US Since 2023
Operational highlights include achieving 1,902 MBOED in production and reaching its 1,000th LNG cargo export milestone. Looking ahead, ConocoPhillips expects second-quarter 2024 production to range between 1.91 to 1.95 million barrels of oil equivalent per day, maintaining its full-year production outlook. Additionally, the company is focused on optimizing operations and expanding its LNG projects globally to deliver competitive shareholder returns.
The report mentions several updates regarding ConocoPhillips’ facilities and operational developments:
- Successful completion of the first major winter construction season at Willow in Alaska.
- Advancement of LNG projects in the U.S. and Qatar.
- Progress in international project startups, including Surmont Pad 267 in Canada, sub-sea tiebacks in Norway, and Bohai Phase 4B in China.
- Continued ramp-up of the Montney development program following the startup of the second phase of the company’s central processing facility in Canada.
- Achievement of the 1,000th LNG cargo export milestone at APLNG in April.
These highlights suggest ongoing efforts by ConocoPhillips to develop and optimize its facilities across various regions as part of its operational strategy.
Drilling & Completions
While the company anticipates maintaining flat activity in the Permian Basin throughout 2024 in terms of both rigs and well completion crews, it notes that the introduction of new large projects and longer laterals could lead to periodic increases in output. Specifically, the company mentions a focus on efficient operations and the development of longer laterals, with approximately 20% of planned wells in 2024 expected to be 3 miles long. These longer lateral wells are seen as significantly improving the cost of supply, potentially by 30% to 40% compared to one-mile laterals.
The company is implementing larger “pad” or batched-well development projects and longer three-mile laterals, which could lead to uneven production in 2024. Approximately 20% of the planned wells for 2024 are expected to have three-mile long laterals. Olds noted that longer laterals significantly improve the cost of supply, with up to a 30% to 40% improvement when moving from a one-mile lateral to a three-mile lateral.
US Operations
ConocoPhillips discusses its operations in the Permian Basin, emphasizing a strategy of efficient operations and steady development. The company plans to maintain flat activity in terms of rigs and well completion crews throughout 2024. Despite this, it acknowledges the potential for periodic increases in output due to the introduction of new large projects and longer lateral wells. ConocoPhillips highlights its focus on driving efficient operations in the Permian Basin to optimize drilling and completion processes. This includes a significant emphasis on developing longer lateral wells, which are expected to improve the cost-effectiveness of drilling operations.
The report mentions ConocoPhillips’ production from the Eagle Ford Shale during the first quarter of 2024. Specifically, it states that the company produced 197,000 barrels of oil equivalent per day (boe/d) from the Eagle Ford Shale during this period. This figure is compared to production levels from the first quarter of the previous year, indicating a decrease from 227,000 boe/d. While the report does not provide extensive details about the Eagle Ford operations, it suggests that production from this region is part of ConocoPhillips’ broader portfolio of assets contributing to its overall production figures.
he report briefly mentions ConocoPhillips’ production from the Bakken Shale during the first quarter of 2024. It states that the company produced 96,000 barrels of oil equivalent per day (boe/d) from the Bakken Shale during this period. This production level is compared to the first quarter of the previous year, indicating a slight decrease from 98,000 boe/d. While the report does not provide extensive details about the Bakken operations, it suggests that production from this region is part of ConocoPhillips’ broader portfolio of assets contributing to its overall production figures.
Natural Gas & LNG
The report discusses ConocoPhillips’ natural gas operations, particularly in the Permian Basin. It mentions that the company ships natural gas to multiple markets via leased transport capacity to both the Gulf Coast and the West Coast. Additionally, ConocoPhillips expresses support for offtake capacity from the Permian, highlighting its firm capacity on the upcoming Matterhorn Pipeline, which is expected to start up later in the year. The report also touches upon ConocoPhillips’ global natural gas strategy, noting its participation in LNG projects in Australia and Qatar, as well as its efforts to secure offtake agreements in various export projects. This suggests that natural gas plays a significant role in ConocoPhillips’ portfolio and long-term strategy.
The report outlines ConocoPhillips’ involvement in liquefied natural gas (LNG) projects and its broader LNG strategy. It mentions the company’s efforts to revitalize its LNG exposure, which began several years ago, with a focus on growing its integrated LNG business. Specifically, ConocoPhillips has increased its ownership in the Australia-Pacific LNG project and participated in LNG expansion projects in Qatar. The company has also secured offtake agreements in various export projects, including Port Arthur LNG in Texas and Saguaro LNG project in Mexico. Furthermore, ConocoPhillips is exploring regasification opportunities in Europe. Overall, the report suggests that LNG is an integral part of ConocoPhillips’ long-term business strategy and growth plans.
Production & Budget
The report provides insights into ConocoPhillips’ production activities, highlighting achievements and plans. In the first quarter of 2024, the company achieved total company production of 1,902 thousand barrels of oil equivalent per day (MBOED), showcasing a year-over-year increase. Notable contributions came from regions such as the Lower 48, Alaska, Canada, Norway, and Chin. ConocoPhillips distributed $2.2 billion to shareholders through a three-tier framework, which included share repurchases, dividends, and debt retirement. Additionally, the company funded $2.9 billion in capital expenditures and investments during the quarter.
