Latest news with #MarathonOil
Yahoo
10-08-2025
- Business
- Yahoo
This Oil Stock Is Now On Track to Produce an Extra $7 Billion in Surplus Cash by 2029
Key Points ConocoPhillips produced lots of cash in the second quarter despite lower commodity prices. The oil giant is returning a large percentage of its excess cash to shareholders. It now expects to produce $7 billion of additional annual surplus cash by 2029, giving it even more money to send to shareholders. 10 stocks we like better than ConocoPhillips › ConocoPhillips (NYSE: COP) is already a cash-gushing machine. The oil and gas giant's low-cost operations enable it to produce significant free cash flow. This allows it to invest in growing its operations, return cash to investors through dividends and buybacks, and maintain its fortress-like financial profile. The company's already robust cash flow will become even larger in the coming years. A combination of growth initiatives and cost savings is now on track to add $7 billion to its annual free cash flow total by 2029. That will give the oil stock even more money to return to shareholders. Drilling down into ConocoPhillips' second-quarter results ConocoPhillips' ability to print cash was on full display during the second quarter. The company generated $4.7 billion in cash from operations, despite a 19% decline in the average price it realized per barrel of oil equivalent (BOE) sold during the period compared to the second quarter of last year. It was able to partially mute the impact of lower commodity prices by significantly increasing its production. Its output averaged nearly 2.4 million BOE per day in the quarter, 446,000 BOE per day higher than the year-ago period. ConocoPhillips benefited from its acquisition of Marathon Oil, as well as a 3% increase in output from its legacy operations. The oil giant used that cash to fund $3.3 billion of capital expenditures and investments to maintain and grow its output. It also paid $1 billion in dividends, repurchased $1.2 billion of shares, and retired $200 million of debt at maturity. That brought its year-to-date total to $2.7 billion in share repurchases, $2 billion in dividend payments, and $700 million in debt reduction. The company ended the quarter with $5.7 billion in cash and short-term investments, and $1.1 billion in long-term investments, backing its fortress A-rated balance sheet. It padded its cash position by closing the sale of $700 million of non-core assets during the quarter and $1.3 billion through the first half of this year. ConocoPhillips has recently agreed to sell an additional $1.3 billion of non-core assets, which should close early in the fourth quarter. As a result, it has exceeded its target of selling $2 billion of assets following its acquisition of Marathon. The upcoming free-cash-flow growth wave ConocoPhillips expects to generate significantly more free cash flow in the future. In the near term, the company expects higher cash distributions from its APLNG investment, tax benefits from the "one big, beautiful bill," and lower capital spending to boost its free cash flow in the second half of the year. That assumes oil prices remain near their current level in the $60 to $70 a barrel range. The company also continues to expect to get a boost from its acquisition of Marathon Oil. It's on track to achieve its target of hitting $1 billion in cost savings from synergies by the end of this year, double its initial target of $500 million. Additionally, the company now expects to deliver another $1 billion in cost and margin enhancements by the end of next year. Meanwhile, ConocoPhillips continues to anticipate its long-cycle investments in liquified natural gas (LNG) and Alaska will fuel a $6 billion uplift in its free cash flow through 2029. The company has investments in three LNG projects (Port Arthur LNG in the U.S. and Qatar's North Field East and North Field South) that should come online over the next few years. The energy company continues to secure customers for this gas. It recently signed a regasification agreement for the Dunkerque terminal in France and a sales agreement in Asia, both of which will begin in 2028. Additionally, its major Willow project in Alaska should start producing by 2029. On top of all this, ConocoPhillips now plans to sell another $2.5 billion of non-core assets by the end of next year. These sales will give it additional cash to strengthen its fortress balance sheet or recycle into higher-quality assets. The company's growing free cash flow and cash balance will enable it to continue returning more money to investors. ConocoPhillips aims to deliver dividend growth within the top 25% of companies in the S&P 500 in the coming years. It also aims to repurchase over $20 billion of its stock in the first three years of closing the Marathon deal. A cash-producing juggernaut ConocoPhillips now expects to capture another $1 billion in cost savings from its Marathon deal. It's also on track to produce $6 billion in incremental free cash flow from its investments in LNG and Alaska. That will give the oil company a lot of money to return to shareholders in the future. Its combination of growing cash flows and rising cash returns could provide the fuel to produce strong total returns in the coming years, making it an attractive oil stock to consider for the long term. Should you invest $1,000 in ConocoPhillips right now? Before you buy stock in ConocoPhillips, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and ConocoPhillips wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,563!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,108,033!* Now, it's worth noting Stock Advisor's total average return is 1,047% — a market-crushing outperformance compared to 181% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 Matt DiLallo has positions in ConocoPhillips. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This Oil Stock Is Now On Track to Produce an Extra $7 Billion in Surplus Cash by 2029 was originally published by The Motley Fool Sign in to access your portfolio
Globe and Mail
08-08-2025
- Business
- Globe and Mail
Can ConocoPhillips' Strategic Divestments Support Long-Term Growth?
ConocoPhillips COP is a leading player in the energy sector, primarily involved in exploration and production activities, with a strong global presence. The company highlights that it has a durable and diverse portfolio of assets that should support its production growth for decades. At the same time, COP is focused on high-grading its portfolio by divesting non-core assets and redirecting the proceeds toward high-return opportunities. COP follows a rigorous process of reviewing all assets within its portfolio annually to identify assets that would compete for capital in the long run. For assets that fail to meet these criteria, the company takes time to assess whether technological or operational changes can help the case. Otherwise, such assets are earmarked for divestment. The company's recent announcement regarding the $1.3 billion sale of its Anadarko Basin assets underscores COP's disciplined approach toward high-grading its asset portfolio. The Anadarko Basin asset sale would allow the company to accelerate value realization from its non-core assets and optimize its portfolio in the U.S. Lower 48. Combined with the sale of other non-core Permian assets, the transaction has taken COP a step ahead of its asset-sales target for the year. The company has finalized asset divestitures worth more than $2.5 billion within nine months of closing its acquisition of Marathon Oil. Furthermore, ConocoPhillips has extended its target to reach $5 billion in asset sales by the end of 2026. COP prioritizes divestment of non-core assets while focusing on high-quality, low-cost assets with low breakeven costs. The sale of non-core assets enhances capital efficiency for the firm while allowing it to reinvest the returns toward high-margin basins. BP and Phillips 66's Focus on Portfolio Optimization BP plc BP and Phillips 66 PSX are two other global energy firms focused on offloading non-core assets to improve shareholder returns and operational efficiency. BP is selling non-core assets to streamline its operations to lower its debt burden and generate higher shareholder returns. In 2025, the British energy giant anticipates generating $3 billion to $4 billion from divestments and other proceeds. In the second quarter of 2025, the company generated $1.4 billion in divestment and other proceeds. Phillips 66 is pursuing a strategy focused on divesting assets outside its core operations, aiming to reallocate the proceeds to more strategic priorities like enhancing shareholder returns. This approach is evident in Phillips 66's announcement of the sale of its non-operated equity interest in the Gulf Coast Express pipeline for $853 million. Furthermore, the company announced the sale of a 65% interest in its Germany and Austria retail business in May 2025. COP's Price Performance, Valuation & Estimates Shares of COP have plunged 14% over the past year against the 20.6% decline of the industry. From a valuation standpoint, COP trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 5.28x. This is below the broader industry average of 10.65x. The Zacks Consensus Estimate for COP's 2025 earnings has been revised upward over the past seven days. Image Source: Zacks Investment Research COP, BP and PSX currently carry a Zacks Rank #3 (Hold), each. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. See our %%CTA_TEXT%% report – free today! 7 Best Stocks for the Next 30 Days Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BP p.l.c. (BP): Free Stock Analysis Report ConocoPhillips (COP): Free Stock Analysis Report Phillips 66 (PSX): Free Stock Analysis Report This article originally published on Zacks Investment Research (
Yahoo
08-08-2025
- Business
- Yahoo
ConocoPhillips (COP) Q2 2025 Earnings Call Highlights: Surpassing Production Targets and ...
Production: 2,391,000 barrels of oil equivalent per day, exceeding guidance. Lower 48 Production: 1,508,000 barrels of oil equivalent per day. Alaska and International Production: 883,000 barrels of oil equivalent per day. Adjusted Earnings: $1.42 per share. Cash from Operations (CFO): $4.7 billion. Capital Expenditures: $3.3 billion, slightly down quarter on quarter. Shareholder Returns: $2.2 billion, including $1.2 billion in buybacks and $1 billion in dividends. Cash and Short-term Investments: $5.7 billion, plus $1.1 billion in long-term liquid investments. Asset Sales Target: Increased to $5 billion. Synergies: Over $1 billion of run rate synergies expected by year-end. Cost and Margin Improvements: Over $2 billion of run rate improvements expected by end of next year. Warning! GuruFocus has detected 4 Warning Sign with COP. Release Date: August 07, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points ConocoPhillips (NYSE:COP) exceeded the top end of its production guidance range for the second quarter of 2025. The company completed the integration of Marathon Oil assets, significantly outperforming the acquisition case with more synergies and a more efficient development program. ConocoPhillips (NYSE:COP) identified over $1 billion in additional cost reduction and margin enhancement opportunities, on top of the $1 billion of expected Marathon synergies. The company raised its asset sales target to $5 billion after exceeding its initial $2 billion target ahead of schedule. ConocoPhillips (NYSE:COP) is well-positioned for a strong second half of the year with free cash flow tailwinds, including lower capital spending and higher APLNG distributions. Negative Points ConocoPhillips (NYSE:COP) faces a working capital headwind of $1.5 billion, offsetting a similar tailwind from the previous quarter. The company expects its full-year effective corporate tax rate to be in the mid to high 30% range, which is higher than previously guided. There is macroeconomic uncertainty and potential downside pressure on oil prices, which could impact future financial performance. The company is experiencing some level of uncertainty due to tariffs and inflation, particularly affecting internationally sourced equipment. ConocoPhillips (NYSE:COP) has not added a rig in the Lower 48 in three to four years, which may limit production growth if market conditions change. Q & A Highlights Q: Neil Mehta from Goldman Sachs asked about the free cash flow projections, noting that at $60 to $70 per barrel WTI, ConocoPhillips is generating close to $8 billion of free cash flow this year, and questioned if the company needs to wait until 2029 to realize the full potential. A: Ryan Lance, CEO, confirmed the math and explained that the company is on track to add about $7 billion of free cash flow by 2029. He emphasized that the growth is not solely dependent on 2029, as there will be consistent start-ups in LNG and other projects contributing to the cash flow over the coming years. Q: Arun Jayaram from JPMorgan inquired about the $1 billion cost reduction and margin optimization plan, asking for details on the drivers and any organizational changes. A: Ryan Lance explained that the plan involves workforce centralization and leveraging the company's scale for lease operating expense improvements. About 80% of the savings will come from G&A, LOE, and transportation costs, while 20% will be from margin expansion. Q: Stephen Richardson from Evercore ISI asked about the increased divestiture target and the types of assets ConocoPhillips plans to sell. A: Ryan Lance stated that the company regularly reviews its portfolio to identify assets that do not compete for capital. The Anadarko Basin sale was an example of an asset that was more valuable to others. The company is confident in achieving the $5 billion target by the end of next year. Q: Douglas Leggate from Wolfe Research asked about the sustainable deferred tax visibility for the Lower 48, given the recent M&A activities. A: Andy O'Brien, CFO, explained that the deferred tax benefits are largely due to one-off discrete items and the One Big Beautiful Bill, which will continue to provide a tailwind into 2026. However, specific numbers are difficult to forecast due to various moving parts. Q: Lloyd Byrne from Jefferies inquired about the LNG strategy and expectations for regasification sales deals. A: Ryan Lance and Andy O'Brien highlighted that ConocoPhillips has placed the entire 5 MTPA from Port Arthur and continues to have discussions for more offtake opportunities. The company is optimistic about future LNG opportunities in Europe and Asia. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
07-08-2025
- Business
- Reuters
ConocoPhillips to sell Anadarko assets for $1.3 billion; profit beats estimates
Aug 7 (Reuters) - ConocoPhillips (COP.N), opens new tab will sell its Anadarko Basin assets for $1.3 billion, the energy producer said on Thursday, after beating Wall Street estimates for second-quarter profit. The asset sale, expected to close at the beginning of the fourth quarter, pushes ConocoPhillips past its $2 billion non-core asset disposition target ahead of schedule. The company raised its asset-sale goal to $5 billion by 2026, with an aim to unlock $1 billion in cost and margin gains. In April, Reuters reported ConocoPhillips was exploring the sale of Oklahoma assets gained through its $22.5 billion takeover of Marathon Oil, which expanded its presence in key U.S. basins and added operations in Equatorial Guinea. The Marathon deal helped lift the company's second-quarter production to 2.39 million barrels of oil equivalent per day (boepd), up 446,000 boepd from a year earlier. Shares of the company rose 2% in premarket trading. Third-quarter production is expected to be 2.33 million to 2.37 million boepd, the company said in a statement. RBC Capital Markets analyst Scott Hanold called ConocoPhillips' results "strong," citing higher output, lower costs and a more than $1 billion cost-cutting plan. He expects the stock to outperform as the update eases cash flow concerns. The production growth helped ConocoPhillips cushion the impact of lower crude prices. Brent crude averaged nearly 20% lower in the second quarter from a year earlier, as U.S. import tariffs, weak global economic signals and higher output from OPEC+ weighed on prices. Geopolitical tensions also pressured sentiment. Prices briefly rose above $80 per barrel in June after Israel struck Iranian nuclear sites, but eased to around $67 by the end of the quarter amid demand concerns and fading risk premiums. The company's total average realized prices stood at $45.77 per barrel oil equivalent, 19% lower than a year earlier. On an adjusted basis, ConocoPhillips reported a profit of $1.42 per share for the April-June quarter, beating analysts' average estimate of $1.38, according to data compiled by LSEG.
Yahoo
07-08-2025
- Business
- Yahoo
ConocoPhillips tops Q2 earnings expectations, shares rise
-- ConocoPhillips (NYSE:COP) on Thursday reported second-quarter 2025 adjusted earnings of $1.42 per share, exceeding analyst expectations of $1.38 per share, as the oil and gas producer successfully integrated Marathon Oil (NYSE:MRO) assets and announced additional cost reduction initiatives. The company's shares rose 1.8% following the earnings release. The Houston-based energy giant generated $4.7 billion in cash from operations during the quarter, while total production reached 2,391 thousand barrels of oil equivalent per day (MBOED), up 23% from 1,945 MBOED in the same period last year. However, the company's total average realized price was $45.77 per barrel of oil equivalent (BOE), 19% lower than the $56.56 per BOE realized in the second quarter of 2024. "In the second quarter, we delivered strong results financially, operationally and strategically. We completed the integration of Marathon Oil and remain on track to deliver greater than $1 billion in synergies and more than $1 billion of one-time benefits," said Ryan Lance, chairman and chief executive officer. ConocoPhillips announced it has signed an agreement to sell its Anadarko Basin assets for $1.3 billion, with the transaction expected to close at the beginning of the fourth quarter. This sale exceeds the company's initial $2 billion disposition target ahead of schedule, prompting management to increase its disposition target to $5 billion by year-end 2026. The company returned $2.2 billion to shareholders during the quarter through $1.2 billion in share repurchases and $1.0 billion in dividends. ConocoPhillips declared a third-quarter ordinary dividend of $0.78 per share, payable on September 2, 2025. Looking ahead, ConocoPhillips expects third-quarter 2025 production to be between 2.33 and 2.37 MMBOED, while maintaining its full-year production guidance of 2.35 to 2.37 MMBOED despite announced asset dispositions. Related articles ConocoPhillips tops Q2 earnings expectations, shares rise If Powell goes, does Fed trust go with him? 7 Undervalued Stocks on the Rise With 50%+ Upside Potential
