NEW YORK–(BUSINESS WIRE)–ConocoPhillips (NYSE: COP) will hold an Analyst and Investor Meeting today to outline the company’s 2018-2020 operating plan and strategy for long-term value creation. The three-year plan averages annual capital expenditures of $5.5 billion, based on a flat real West Texas Intermediate (WTI) price of $50 per barrel, and targets strong performance on several value-oriented metrics, including:
- Greater than 20 percent cash return on capital employed (CROCE) by 2020;
- Sustaining capital of $3.5 billion;
- Less than a $40-per-barrel average sustaining price;
- Greater than 30 percent payout of cash provided by operating activities to shareholders annually, including dividends and share buybacks;
- Extending the $1.5 billion per year of share buybacks for an additional year through 2020, resulting in total 2017-2020 share buybacks of $7.5 billion;
- Debt reduction to $15 billion in 2019;
- Total share buybacks of $7.5 billion and debt reduction to $15 billion will represent a 20 percent decrease in debt-adjusted share count by year-end 2020;
- Approximately 5 percent underlying production compound annual growth rate (CAGR) and over 5 percent cash margin CAGR, resulting in more than a 10 percent cash flow CAGR;
- Improvement in financial returns driven by disciplined investments in the company’s resource base of 15 billion barrels of oil equivalent with an average cost of supply of less than $35 per barrel.
The company also announced today that, consistent with its ongoing commitment to sustainability, it has set a target to reduce greenhouse gas emissions intensity by 5-to-15 percent by 2030. For further information, see GHGTarget.cop.com.
“During 2017, we significantly transformed ConocoPhillips to succeed across a range of commodity prices,” said Ryan Lance, chairman and chief executive officer. “Through accretive asset sales and an ongoing focus on capital and cost efficiency, we’ve lowered the capital intensity and sustaining price of the company, reduced the cost of supply of our investment portfolio, substantially strengthened our balance sheet and returned a significant portion of cash flow to our owners. We believe we’re uniquely positioned to generate free cash flow, deliver top-tier distributions to shareholders and improve financial returns, while executing the business in a safe, socially and environmentally responsible manner. We want to be the company that can attract and retain capital to this sector by offering superior returns to shareholders through cycles. Today we will provide a clear, measurable plan to achieve this goal.”
ConocoPhillips’ Analyst and Investor Meeting will begin at 9 a.m. EST in New York City. A live webcast of the meeting will be available on the ConocoPhillips Investor Relations site, www.conocophillips.com/investor.
— # # # —
ConocoPhillips is the world’s largest independent E&P company based on production and proved reserves. Headquartered in Houston, Texas, ConocoPhillips had operations and activities in 17 countries, $75 billion of total assets, and approximately 11,600 employees as of Sept. 30, 2017. Production excluding Libya averaged 1,403 MBOED for the nine months ended Sept. 30, 2017, and proved reserves were 6.4 billion BOE as of Dec. 31, 2016. For more information, go to www.conocophillips.com.