Headquartered in Houston, ConocoPhillips had operations and activities in 15 countries, $63 billion of total assets, and approximately 9,700 employees at Dec. 31, 2020. (Source: ConocoPhillips Co.; ConocoPhillips illustration by IgorGolovniov / Shutterstock.com)
ConocoPhillips Co. resumed its share buyback program at an annualized level of $1.5 billion on March 10 citing improved market conditions while doubling down on its capital discipline promise.
“It’s still early in the new year, but commodity prices have strengthened such that our dividend alone may not be sufficient to meet our return of capital commitment,” Ryan Lance, chairman and CEO of the Houston-based independent E&P company, said in a statement.
Oil prices have continued to rebound from the lows reached last year due to the pandemic with the price of Brent crude trading above $70/bbl on March 8, its highest since January 2020. Still, Lance reiterated in his statement on March 10 that ConocoPhillips has no plans to increase its previously announced operating capital program of $5.5 billion despite the more constructive outlook on 2021.
“We believe this market will favor companies who demonstrate sustainable discipline and strong free cash flow generation with a track record of predictable returns of capital,” Lance said.
As such, ConocoPhillips joins other oil and gas producers such as U.S. oil majors Exxon Mobil Corp. and Chevron Corp. that have recently reaffirmed plans to keep spending in check regardless of an oil price recovery.
“At a time of reckoning for the sector, ConocoPhillips’ proven value proposition remains the right one for this volatile business,” Lance added.
ConocoPhillips’ share repurchase program will be executed ratably across all four quarters in 2021. The company added the buyback program will resume 50% higher than the level of repurchases in fourth-quarter 2020 when the program was suspended due to its deal to buy Concho Resources.
Based on the company’s current outlook, this level of share repurchases, combined with the ordinary dividend, reflects ConocoPhillips’ long-standing priority to return greater than 30% of cash from operations to shareholders annually, according to the company release.
ConocoPhillips will continue to monitor the environment closely and adjust the share repurchase program as needed, according to Lance’s statement.
Recommended Reading
Velocity Management Invests in Pipeline Builder M Wright Services
2025-01-16 - Velocity Management Advisors has made a minority investment in M Wright Services and three of Velocity’s partners will join the construction firm’s board.
Lion Equity Partners Buys Global Compression from Warren Equipment
2025-01-09 - Private equity firm Lion Equity Partners has acquired Warren Equipment Co.’s Global Compression Services business.
Exxon Mobil to Cut Almost 400 Jobs in Wake of Pioneer Acquisition
2024-11-14 - A regulatory filing shows more than 90% of layoffs are at Pioneer’s former headquarters in Irving, Texas with the rest being workers in Midland.
The Private Equity Puzzle: Rebuilding Portfolios After M&A Craze
2025-01-28 - In the Haynesville, Delaware and Utica, Post Oak Energy Capital is supporting companies determined to make a profitable footprint.
USD Partners Expects to Sell Final Asset by Mid-April
2025-01-22 - USD Partners was obligated to sell the Hardisty terminal after entering a forbearance agreement with its lenders in June 2024.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.