ConocoPhillips: A Strategy Shift And Asset Sales Come High On Agenda
Richard Zeits • 16 Comments
Richard Zeits • 16 Comments
Oct. 29, 2015, 8:19 AM
- ConocoPhillips (NYSE:COP) cuts its spending plans for the year as it reports an in-line Q3 loss, now seeing 2015 capex of $10.2B compared with initial 2015 guidance of $11.5B, and reduces its operating cost guidance to $8.2B from $8.9B.
- The largest major U.S. oil company without refining operations says its unadjusted Q3 loss totaled $1.1B compared to a $2.7B profit in the year-ago quarter, COP's biggest loss since Q4 2008.
- COP says Q3 production was 1.55M boe/day, and expects Q4 output of 1.585M-1.625M boe/day, which would result in 3%-4% Y/Y growth from continuing operations, excluding Libya.
- Says its Q3 average realized price was $32.91/boe, down from $64.78/bbl a year earlier.
- COP says it will divest assets and lower its cost structure in response to weak crude oil prices but remains committed to a "compelling" dividend.
Oct. 29, 2015, 7:04 AM
- ConocoPhillips (NYSE:COP): Q3 EPS of -$0.38 in-line.
Oct. 28, 2015, 5:30 PM
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Oct. 26, 2015, 4:48 PM
- BP and ConocoPhillips (NYSE:COP) have provided written assurances that they will commit their shares of Alaska North Slope natural gas to a future pipeline project, Alaska's Gov. Walker says, adding that he will not introduce property tax legislation on gas leases within the Prudhoe Bay and Point Thomson units.
- The announcement comes as the state legislature begins a special session concerning the project, which now is likely to focus on buying out TransCanada’s interest in the proposed $45B-$65B project that would be the largest single investment in Alaska in the state’s history.
- Exxon Mobil (NYSE:XOM), also one of the three top North Slope producers, has not yet made public a similar commitment.
- Earlier: Exxon, Conoco, BP to pay back $800M for project impacts in Alaska (Oct. 1)
Oct. 22, 2015, 7:11 PM
- ConocoPhillips' (NYSE:COP) plan to build the first-ever oil production facilities at a federal reserve in Alaska is approved by the U.S. Bureau of Land Management, FuelFix reports, allowing COP to construct an 11.8-acre drilling pad and related infrastructure inside the reserve.
- The project offers Alaska the hope of adding new oil to the 800-mile-long Trans-Alaska Pipeline System, which was originally built to ferry 2M bbl/day of crude away from North Slope oil fields; it now carries about a quarter of that amount as nearby production declines, leading to slower flows.
- But with low oil prices, it is unclear when or if COP would proceed with its broader Greater Mooses Tooth project, which ultimately could involve drilling up to 33 wells in the National Petroleum Reserve-Alaska.
Oct. 20, 2015, 12:36 PM
- Chevron (CVX -0.2%) is seeking buyers for its 25% stake in the South Natuna Sea Block oil and natural gas field offshore Indonesia that may fetch ~$1B, Bloomberg reports.
- ConocoPhillips (COP -0.6%), which owns a 40% stake and is the field’s operator, already has initiated a process to sell its holding, Indonesia’s upstream energy regulator said last month.
- CVX, the largest crude oil producer in Indonesia, is trying to unload $15B in less lucrative assets to counter profit declines.
Oct. 20, 2015, 10:57 AM
- ConocoPhillips (COP +0.5%) is added to BofA Merrill's US1 List with a new $77 price target, raised from $74, as analyst Doug Leggate cites the company's disposals, growth and capital flexibility.
- COP is not “the highest beta name in the space,” but it does have a sustainable dividend, an advantaged capital cycle and option value from portfolio restructuring, a combination that differentiates COP in the face of “what looks increasingly like a bottoming process of this oil cycle," Leggate writes.
- COP's material asset sales could reach $8B-$10B, which comprises ~15% of the company’s current market cap, "but with unique leverage to an oil recovery and the highest dividend of the U.S. oils that pays investors to wait."
Oct. 19, 2015, 11:43 AM
- ConocoPhillips (COP -2.4%) and Dong Energy have agreed to sell their stakes in Gassled, Norway’s offshore gas pipeline network to P-E backed CapeOmega, Bloomberg reports.
- COP owns a 1.68% stake in Gassled and Dong holds 0.98%; the two companies reportedly agreed to sell this summer, and both deals still need approval from Norwegian authorities before they can be closed.
- Four other owners representing 44% of shares in Gassled sued Norway's government over a cut in gas transportation tariffs they said would reduce their income by 15B ($1.9B): COP and Dong, who were not part of the lawsuit, reportedly signed their deals with CapeOmega before an Oslo court ruled in favor of the Norwegian government in September.
Oct. 16, 2015, 8:18 PM
- Occidental Petroleum's (NYSE:OXY) reported sale of its Bakken shale assets at a heavily discounted price of $500M may make strategic sense for the company, but it sets a low bar for future deals contemplated by ConocoPhillips (NYSE:COP), Whiting Petroleum (NYSE:WLL), Oasis Petroleum (NYSE:OAS) and anyone else known to be pursuing pipeline or oil acreage sales.
- OXY’s view of the Bakken has deteriorated sharply since it invested heavily five years ago, as the combination of low oil prices, cash flow pressures and the company’s successes in Texas’ Permian Basin "likely resulted in the willingness for management to move forward with the deal at a discounted price,” according to Simmons analysts.
- But "the sale price shows the stark reality that operators trying to sell non-core acreage face in a sub-$50 per barrel oil world face," Sterne Agee CRT's Tim Rezvan says.
- COP is trying to sell oil and gas properties in the Rockies, east Texas, south Texas and northern Louisiana for a combined $2B, and now it is questionable if it can hit the target; in the case of OAS, which operates only in North Dakota, the sale of all or part of its saltwater disposal business is seen as vital to keeping core oil operations online.
Oct. 16, 2015, 4:46 PM
- The Obama administration today closed off two avenues for new oil drilling in the Arctic Ocean, weeks after Royal Dutch Shell (RDS.A, RDS.B) said it was abandoning the area.
- The Interior Department said it was canceling scheduled auctions of drilling rights in the Chukchi and Beaufort seas, citing low industry interest, and it formally rejected bids by Shell and Statoil (NYSE:STO) for more time to search for crude under their existing Arctic leases.
- The decision to deny lease suspension requests from Shell and Statoil mirrors a similar rejection of a ConocoPhillips (NYSE:COP) request for more time on its own Arctic leases; COP has challenged the decision before an Interior Department appeals board, and settlement talks are underway.
Oct. 13, 2015, 6:28 PM
- ConocoPhillips (NYSE:COP) discloses that it has amended its bylaws to allow minority shareholders to nominate directors.
- Starting with COP's 2017 annual meeting, a stockholder or group of stockholders owning 3% or more of the company's outstanding shares for at least three years will be permitted to nominate up to 20% of the board or two directors, whichever is greater.
- Chevron last month amended its bylaws to allow proxy access, joining a growing list of major companies to do so.
Oct. 12, 2015, 7:52 AM
- Exxon Mobil (NYSE:XOM) is upgraded to Equal Weight from Underweight with a $85 price target, raised from $80, at Barclays, citing the company's relative dividend yield.
- However, the firm says it still prefers ConocoPhillips (NYSE:COP) and Suncor (NYSE:SU) over XOM among oil majors.
- XOM +0.8% premarket.
Oct. 9, 2015, 2:26 PM
- The House passes legislation that would lift the 40-year-old ban on oil exports, giving the oil industry one of its top congressional priorities.
- But the real test is in the narrowly divided Senate, where stand-alone export legislation is far less likely to advance; in the 261-159 House vote, only 26 Democrats joined 235 Republicans to support the measure, held down by the Obama administration's opposition.
- More than a dozen oil companies - including Continental Resources (NYSE:CLR), ConocoPhillips (NYSE:COP), Encana (NYSE:ECA), Hess (NYSE:HES), Marathon Oil (NYSE:MRO) and Apache (NYSE:APA) - have been pressing the issue with Congress, arguing that allowing oil exports would eliminate market distortions, create jobs and stimulate more U.S. petroleum production; it also would help companies fetch a higher price on the global oil market.
- "An extra dollar or two for the price of our product today is very important because our margins are incredibly squeezed,” says ECA's Doug Suttles.
- ETFs: USO, OIL, XLE, UCO, UWTI, VDE, ERX, OIH, SCO, XOP, BNO, DBO, DWTI, ERY, DIG, DTO, DUG, BGR, USL, XES, IYE, IEO, IEZ, DNO, FENY, PXE, PXJ, FIF, OLO, SZO, NDP, RYE, FXN, OLEM, DDG
Oct. 9, 2015, 12:38 PM
- ConocoPhillips (NYSE:COP) declares $0.74/share quarterly dividend, in line with previous.
- Forward yield 5.27%
- Payable Dec. 1; for shareholders of record Oct. 19; ex-div Oct. 15.
Oct. 8, 2015, 1:57 PM
- Oppenheimer energy analysts expect just one of the 15 pure-play E&P companies it covers to report positive EPS in Q3, just two to post positive EPS in Q4, and only two to finish in the green for 2016.
- Devon Energy (DVN +1.5%) is the only large E&P Oppenheimer expects to post a profit in Q3 and one of only two, along with Range Resources (RRC +1.5%), seen recording a profit in Q4.
- The firm sees Anadarko Petroleum (APC +2.4%), Hess (HES +4.1%) and Murphy Oil (MUR +3.5%) as the hardest hit stocks in Q3, forecasting respective EPS losses of $0.76, $0.91 and $1.13.
- Oppenheimer projects only ConocoPhillips (COP +1.2%) and Occidental Petroleum (OXY +1.9%) coming through with a profit for full-year 2016.
Oct. 7, 2015, 4:59 PM
- Investors should stick with big oil companies such as Total (NYSE:TOT), ConocoPhillips (NYSE:COP) and Statoil (NYSE:STO) who have the most room for self-help, Citigroup analysts say.
- The firm believes the messaging in Q3 results could prove more important for equity performance than the numbers themselves, and managements need to be seen to be responding to current low return on equity and other factors such as recent debt downgrades; bigger cuts to costs and capital seem inevitable as the oil and gas industry looks to deepen its commitment to repair.
- Citi cites TOT as an industry-leader on a self-help agenda, and at its recent strategic update set a benchmark for what the industry needs to achieve; the firm says it continues to see value in "self-help winners" TOT, STO and COP, while also recommending BG Group (OTCQX:BRGXF, OTCQX:BRGYY) as a cheaper way into Royal Dutch Shell (RDS.A, RDS.B).
ConocoPhillips is an independent exploration and production company. It operates through six segments: Alaska, Lower 48 and Latin America, Canada, Europe, Asia Pacific and Middle East, and Other International. The Alaska segment primarily explores for, produces, transports and markets crude oil,... More
Sector: Basic Materials
Industry: Oil & Gas Drilling & Exploration
Country: United States
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