CONOCOPHILLIPS Q3 FY2024 earnings call

• Ryan Lance noted strong Q3 execution, exceeded production guidance, raised full-year production outlook driven by Lower 48, on track to distribute at least $9 billion to shareholders, increased share repurchase authorization by up to $20 billion, and Marathon Oil acquisition on track to close with integration planning progressing well towards doubling initial $500 million synergy target.
• Bill Bullock detailed Q3 adjusted earnings, production numbers, cash flows, and provided guidance for Q4 (production range 1.99-2.03 million boe/day) and full year (production 1.94-1.95 million boe/day, up 10,000 boe/day from prior, and increased APLNG distributions guidance to $1.5 billion full year).
• Andy O'Brien discussed Marathon synergies, explaining the team has mapped out achieving initial $500 million synergy target within a year of closing and now expects to double it to $1 billion driven by capital optimization.
• Nick Olds and Kirk Johnson talked about Lower 48 operations, including running Marathon assets at steady state level loaded, Alaska transactions, and APLNG outlook.

In the third quarter, ConocoPhillips generated $1.78 per share in adjusted earnings. They produced 1,917,000 barrels of oil equivalent per day, with 3% underlying growth year-over-year. Lower 48 achieved record production of 1,147,000 barrels of oil equivalent per day, representing 6% underlying growth year-over-year. By basin, production was 781,000 in the Permian, 246,000 in the Eagle Ford, and 107,000 in the Bakken. Third quarter CFO was over $4.7 billion, including over $400 million of APLNG distributions. Operating working capital was a $1 billion tailwind in the quarter. Capital expenditures were $2.9 billion, and $2.1 billion was returned to shareholders, including $1.2 billion in buybacks and $900 million in ordinary dividends and VROC payments.

• For the fourth quarter, production is expected to be in the range of 1.99 million to 2.03 million barrels per day.
• For the full year, production is now expected to be 1.94 million to 1.95 million barrels per day, up 10,000 barrels per day from prior guidance.
• Full year guidance for APLNG distributions is increased by $100 million to $1.5 billion, with over $200 million expected in the fourth quarter.
• The combined company is confident in growing at a low-single-digit rate in 2025 with pro-forma CapEx of less than $13 billion.

Q: Leo Mariani with ROTH asked about Q4 turnarounds, CapEx, and OpEx.

A: Andy O'Brien responded, stating Q4 is a small turnaround quarter (~5,000 boe/day, mostly in Norway), OpEx guidance unchanged, production beat and annual production increase without increasing operating cost guidance, and Lower 48 non-operated activity tailing off in Q4 as expected