ConocoPhillips Unveils its 10-Year Operational Plan
ConocoPhillips revealed its 10-year plan on Tuesday, which includes free cash flow of $50 billion and an average yearly CAPEX of less than $7 billion.
The Houston-based oil and gas producer presented the highlights of its plan for the coming decade during an analyst and investor meeting. The company’s plan aims to exhibit a commitment to capital discipline while providing higher returns to shareholders.
ConocoPhillips also anticipates annual production growth of three percent and plans to sell 25 percent of its Alaska assets.
“Over the past few years we have successfully transformed ConocoPhillips to position the company for consistent, predictable performance across the inevitable price cycles of our industry,” said CEO Ryan Lance. “We believe that we offer the market a compelling, long-term E&P investment that provides downside protection and full exposure to the upside. Today’s plan demonstrates sustained value creation through significant free cash flow generation, distinctive returns of capital and growing returns on capital.”
ConocoPhillips has been trying to turn around the company’s stock, which has underperformed the S&P 500 Energy Index. The company has implemented several cost-cutting measures over the years, which have included staff reductions.
“We are committed to delivering superior returns to shareholders,” Lance said. “Our plan provides a powerful, multi-year outlook that combines a robust, scenario-based strategy framework, a diverse, low cost of supply resource base, a disciplined, value-based investment approach and a world-class workforce. We believe we are unique in being able to offer this formula to the market.”
Lance referred to ConocoPhillips’ 10-year plan as one that works and is built to thrive across the cycles. The company also didn’t rule out possible M&A activity, with Don Wallette, ConocoPhillips’ EVP and CFO, saying it would be “inappropriate” to rule out all types and sizes of acquisitions; but they would have to fit into the company’s financial framework.
Lance echoed that sentiment.
“It’s not impossible, but it’s difficult.”
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