ConocoPhillips unveiled a 10-year plan on Nov. 19 and said it would target free cash flow of about $50 billion with annual capital spending averaging less than $7 billion over the next decade.
The Houston-based company’s shares rose a fraction to $56.80 early Nov. 19.
The largest U.S. independent crude producer said it expects to spend about $20 billion on dividends and $30 billion in share buybacks in 10 years.
The announcement comes as investors, frustrated by weak commodity prices for five years, have been pressuring oil and gas companies to cut back on drilling and shore up cash to return to shareholders.
“We challenge any other [exploration and production] company to show you a plan like this,” CEO Ryan Lance told analysts and investors at a meeting in Houston on Nov. 19.
The company expects several decades of lackluster oil prices, with U.S. oil to average between $40 to $70 per barrel through the 2050s. Ride sharing, electric vehicles and urbanization will impact demand for the company’s products, but Executive Vice President Matt Fox said oil and gas will remain an important part of the energy mix through 2050.
The company also forecast annual production growth averaging more than 3% from 2020 to 2029.
ConocoPhillips, which has been divesting assets to focus on its U.S. shale base, had in October posted a quarterly profit that beat analysts’ estimates, primarily as higher shale production offset lower crude prices and higher exploration costs.
Recommended Reading
Post Oak-backed Quantent Closes Haynesville Deal in North Louisiana
2024-09-09 - Quantent Energy Partners’ initial Haynesville Shale acquisition comes as Post Oak Energy Capital closes an equity commitment for the E&P.
Post Oak Backs New Permian Team, But PE Faces Uphill Fundraising Battle
2024-10-11 - As private equity begins the process of recycling inventory, likely to be divested from large-scale mergers, executives acknowledged that raising funds has become increasingly difficult.
Post Oak Backs Third E&P: Tiburon Captures Liquids-rich Utica Deal
2024-10-15 - Since September, Post Oak Energy Capital has backed new portfolio companies in the Permian Basin and Haynesville Shale and made an equity commitment to Utica Shale E&P Tiburon Oil & Gas Partners.
Exxon, Chevron Beat 3Q Estimates, Output Boosts Results
2024-11-01 - Oil giants Chevron and Exxon Mobil reported mixed results for the third quarter, with both companies surpassing Wall Street expectations despite facing different challenges.
EQT to Cut Workforce 15% Following Close of Equitrans Acquisition
2024-10-02 - EQT Corp. closed its $5.5 billion all-stock buy of Equitrans Midstream Corp. on Sept. 22.