HOUSTON - ConocoPhillips Chief Executive Ryan Lance told shareholders at the company's annual meeting Tuesday that the company's long-awaited production growth rebound will begin by the end of this year.
He said 2013 will be an "inflection point" for ConocoPhillips, as it closes on $8.5 billion in announced asset sales and reaches a production low. But production will start to ramp up again by the end of the fourth quarter and into next year as the sales put cash on the company's balance sheet to fund development and grow its dividend.
"The growth is coming," Mr. Lance said. "You don't have to wait for that growth and the margin improvement for our company."
ConocoPhillips is in the midst of a transformation facilitated by drilling technologies that have unlocked oil and natural gas within the U.S. that had been unreachable or too expensive to drill. Mr. Lance's presentation to shareholders emphasized ConocoPhillips' ability to fund its operations and deliver on its promises of 3-5% production and margin growth even as it continues to pay a high dividend.
Mr. Lance said there's a "clear line of sight" to production of 1.9 million barrels of oil equivalent a day by 2017, up from an estimated 1.5 million barrels of oil equivalent per day this year. Much of that will be fueled by ConocoPhillips' acreage in unconventional U.S. shale formations--the Eagle Ford and Permian formations in Texas, and North Dakota's Bakken.
Income brought in from production in those areas will be used to fund the company's major projects around the world and exploration that is expected to fuel long-term growth. Mr. Lance highlighted the company's work in the Gulf of Mexico, where company is working to renew its presence. It will participate in five to eight wells this year, including its first operated well there in nearly a decade.
"We are back," Mr. Lance said of the Gulf.
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