Conocophillips 10-Q for FY2024 Q1

Conocophillips (COP)

10-Q 2024-05-02 For: 2024-03-31

Added on April 09, 2026

About this 10-Q

Conocophillips filed this 10-Q on May 2, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).

Headline figures

Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $13.85B; down 6.5% from $14.81B a year earlier
Net income: $2.55B; down 12.6% from net income of $2.92B a year earlier
Diluted EPS: $2.15; down 9.7% from $2.38 a year earlier

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			Delaware			01-0562944
			(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


Title of each class	Trading symbols	Name of each exchange on which registered
Common Stock, $.01 Par Value	COP	New York Stock Exchange
7% Debentures due 2029	CUSIP—718507BK1	New York Stock Exchange


			Page
Commonly Used Abbreviations			1

Part I—Financial Information

Item 1. Financial Statements
Consolidated Income Statement			2
Consolidated Statement of Comprehensive Income			3
Consolidated Balance Sheet			4
Consolidated Statement of Cash Flows			5
Notes to Consolidated Financial Statements			6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			27

Item 3. Quantitative and Qualitative Disclosures About Market Risk			49

Item 4. Controls and Procedures			49

Part II—Other Information

Item 1. Legal Proceedings			49

Item 1A. Risk Factors			49

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			50

Item 5. Other Information			50

Item 6. Exhibits			51

Signature			52


Currencies		Accounting
$ or USD	U.S. dollar	ARO	asset retirement obligation
CAD	Canadian dollar	ASC	accounting standards codification
EUR	Euro	ASU	accounting standards update
GBP NOK	British pound Norwegian kroner	DD&A	depreciation, depletion and amortization
		FASB	Financial Accounting Standards Board
Units of Measurement
BBL	barrel	FIFO	first-in, first-out
BCF	billion cubic feet	G&A	general and administrative
BOE	barrel of oil equivalent	GAAP	generally accepted accounting principles
MBD	thousands of barrels per day
MCF	thousand cubic feet	LIFO	last-in, first-out
MM	million	NPNS	normal purchase normal sale
MMBOE	million barrels of oil equivalent	PP&E	properties, plants and equipment
MBOED	thousand barrels of oil equivalent per day	VIE	variable interest entity
MMBOED	million barrels of oil equivalent per day
MMBTU	million British thermal units	Miscellaneous
MMCFD MTPA	million cubic feet per day million tonnes per annum	CERCLA	Federal Comprehensive Environmental Response Compensation and Liability Act
		DEI	diversity, equity and inclusion
Industry		EPA	Environmental Protection Agency
BLM	Bureau of Land Management	ESG	environmental, social and governance
CBM	coalbed methane	EU	European Union
CCS	carbon capture and storage	FERC	Federal Energy Regulatory Commission
E&P	exploration and production
FEED	front-end engineering and design	GHG	greenhouse gas
FID	final investment decision	HSE	health, safety and environment
FPS	floating production system	ICC	International Chamber of Commerce
FPSO	floating production, storage and	ICSID	World Bank’s International
	offloading		Centre for Settlement of
G&G	geological and geophysical		Investment Disputes
JOA	joint operating agreement	IRS	Internal Revenue Service
LNG	liquefied natural gas	OTC	over-the-counter
NGLs	natural gas liquids	NYSE	New York Stock Exchange
OPEC	Organization of Petroleum	SEC	U.S. Securities and Exchange
	Exporting Countries		Commission
PSC	production sharing contract	TSR	total shareholder return
PUDs	proved undeveloped reserves	U.K.	United Kingdom
SAGD	steam-assisted gravity drainage	U.S.	United States of America
WCS	Western Canadian Select	VROC	variable return of cash
WTI	West Texas Intermediate


	Millions of Dollars
	Three Months Ended March 31
	2024		2023
Revenues and Other Income
Sales and other operating revenues	$	13,848	14,811
Equity in earnings of affiliates	421		499
Gain (loss) on dispositions	93		93
Other income	114		114
Total Revenues and Other Income	14,476		15,517
Costs and Expenses
Purchased commodities	5,334		6,138
Production and operating expenses	2,015		1,779
Selling, general and administrative expenses	178		159
Exploration expenses	112		138
Depreciation, depletion and amortization	2,211		1,942
Impairments	—		1
Taxes other than income taxes	555		576
Accretion on discounted liabilities	80		68
Interest and debt expense	205		188
Foreign currency transaction (gain) loss	(18)		(44)
Other expenses	(4)		10
Total Costs and Expenses	10,668		10,955
Income (loss) before income taxes	3,808		4,562
Income tax provision (benefit)	1,257		1,642


Net Income (Loss)	$	2,551	2,920

Net Income (Loss) Per Share of Common Stock (dollars)
Basic	$	2.16	2.38
Diluted	2.15		2.38
Weighted-Average Common Shares Outstanding (in thousands)
Basic	1,177,921		1,220,228
Diluted	1,180,320		1,223,355


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Consolidated Statement of Comprehensive Income			ConocoPhillips


	Millions of Dollars
	March 31 2024		December 31 2023
Assets
Cash and cash equivalents	$	5,574	5,635
Short-term investments	487		971
Accounts and notes receivable (net of allowance of $4 and $3, respectively)	5,444		5,461
Accounts and notes receivable—related parties	14		13

Inventories	1,443		1,398
Prepaid expenses and other current assets	759		852
Total Current Assets	13,721		14,330
Investments and long-term receivables	9,132		9,130

Net properties, plants and equipment (net of accumulated DD&A of $75,697 and $74,361, respectively)	69,907		70,044
Other assets	2,588		2,420
Total Assets	$	95,348	95,924

Liabilities
Accounts payable	$	5,101	5,083
Accounts payable—related parties	37		34
Short-term debt	1,113		1,074
Accrued income and other taxes	2,116		1,811
Employee benefit obligations	405		774
Other accruals	1,391		1,229
Total Current Liabilities	10,163		10,005
Long-term debt	17,304		17,863
Asset retirement obligations and accrued environmental costs	7,141		7,220
Deferred income taxes	8,776		8,813
Employee benefit obligations	967		1,009
Other liabilities and deferred credits	1,672		1,735
Total Liabilities	46,023		46,645

Equity
Common stock (2,500,000,000 shares authorized at $0.01 par value)
Issued (2024—2,106,777,461 shares; 2023—2,103,772,516 shares)
Par value	21		21
Capital in excess of par	61,300		61,303
Treasury stock (at cost: 2024—937,243,485 shares; 2023—925,670,961 shares)	(66,974)		(65,640)
Accumulated other comprehensive income (loss)	(5,917)		(5,673)
Retained earnings	60,895		59,268
Total Equity	49,325		49,279
Total Liabilities and Equity	$	95,348	95,924


Fair value of consideration	Millions of Dollars
Cash paid	$	2,635
Contingent consideration	320
Final Consideration	$	2,955


Recognized amounts of identifiable assets acquired and liabilities assumed	Millions of Dollars
Oil and gas properties	$	3,082
Asset retirement obligations	(112)
Other	(15)
Total identifiable net assets	$	2,955


	Millions of Dollars
	Three Months Ended March 31, 2023
Supplemental Pro Forma (unaudited)	As Reported		Pro Forma Surmont	Pro Forma Combined
Total Revenues and Other Income	$	15,517	603	16,120
Income (loss) before income taxes	4,562		70	4,632
Net Income (Loss)	2,920		53	2,973

Earnings per share ($ per share):
Basic net income (loss)	$	2.38		2.43
Diluted net income (loss)	2.38			2.42


	Millions of Dollars

	Common Stock
	Par Value		Capital in Excess of Par	Treasury Stock	Accum. Other Comprehensive Income (Loss)	Retained Earnings	Total
For the three months ended March 31, 2024
Balances at December 31, 2023	$	21	61,303	(65,640)	(5,673)	59,268	49,279
Net income (loss)						2,551	2,551
Other comprehensive income (loss)					(244)		(244)
Dividends declared
Ordinary ($0.58 per common share)						(687)	(687)
Variable return of cash ($0.20 per common share)						(237)	(237)
Repurchase of company common stock				(1,325)			(1,325)
Excise tax on share repurchases				(9)			(9)
Distributed under benefit plans			(3)				(3)

Balances at March 31, 2024	$	21	61,300	(66,974)	(5,917)	60,895	49,325


	Open Position Long (Short)
	March 31 2024	December 31 2023
Commodity
Natural gas and power (billions of cubic feet equivalent)
Fixed price	(14)	(12)
Basis	(6)	(2)


	Millions of Dollars
	Carrying Amount
	Cash and Cash Equivalents			Short-Term Investments
	March 31 2024		December 31 2023	March 31 2024	December 31 2023
Cash	$	576	474
Demand Deposits	1,553		1,424
Time Deposits
1 to 90 days	3,399		3,713	121	511
91 to 180 days					22
Within one year				3	3
U.S. Government Obligations
1 to 90 days	38		24	—	—
	$	5,566	5,635	124	536


Financial Statements			Table of Contents


Financial Statements			Table of Contents


Financial Statements			Table of Contents


Financial Statements			Table of Contents


	Millions of Dollars
	Amortized Cost Basis			Fair Value
	March 31 2024		December 31 2023	March 31 2024	December 31 2023
Major Security Type
Corporate Bonds	$	852	806	851	807
Commercial Paper	106		131	106	131
U.S. Government Obligations	249		278	247	278
U.S. Government Agency Obligations	7		12	7	12
Foreign Government Obligations	11		11	11	11
Asset-Backed Securities	215		184	215	185
	$	1,440	1,422	1,437	1,424


	Millions of Dollars
	March 31, 2024					December 31, 2023
	Level 1		Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Assets
Investments in debt securities	$	248	1,189	—	1,437	278	1,146	—	1,424
Commodity derivatives	338		314	73	725	308	301	115	724
Total assets	$	586	1,503	73	2,162	586	1,447	115	2,148

Liabilities
Commodity derivatives	$	371	280	22	673	350	283	14	647
Contingent consideration	—		—	305	305	—	—	312	312
Total liabilities	$	371	280	327	978	350	283	326	959


	Millions of Dollars
				Amounts Subject to Right of Setoff
	Gross Amounts Recognized		Amounts Not Subject to Right of Setoff	Gross Amounts	Gross Amounts Offset	Net Amounts Presented	Cash Collateral	Net Amounts
March 31, 2024
Assets	$	725	41	684	411	273	2	271
Liabilities	673		37	636	411	225	39	186

December 31, 2023
Assets	$	724	39	685	375	310	4	306
Liabilities	647		34	613	375	238	47	191


	Millions of Dollars
	Defined Benefit Plans		Unrealized Holding Gain/(Loss) on Securities	Foreign Currency Translation	Unrealized Gain/(Loss) on Hedging Activities	Accumulated Other Comprehensive Income/(Loss)
December 31, 2023	$	(393)	2	(5,344)	62	(5,673)
Other comprehensive income (loss)	5		(3)	(230)	(16)	(244)
March 31, 2024	$	(388)	(1)	(5,574)	46	(5,917)


	Millions of Dollars
	Pension Benefits					Other Benefits
	2024			2023		2024	2023
	U.S.		Int'l.	U.S.	Int'l.
Components of Net Periodic Benefit Cost
Three Months Ended March 31
Service cost	$	12	10	13	10	—	—
Interest cost	19		29	19	28	1	1
Expected return on plan assets	(16)		(41)	(15)	(37)
Amortization of prior service credit	—		—	—	—	(9)	(9)
Recognized net actuarial loss (gain)	2		14	3	17	—	(1)
Settlements	—		—	4	—
Net periodic benefit cost	$	17	12	24	18	(8)	(9)


	Millions of Dollars (except per share amounts)
	Three Months Ended March 31
	2024		2023
Basic earnings per share

Net Income (Loss)	$	2,551	2,920
Less: Dividends and undistributed earnings
allocated to participating securities	9		11
Net Income (Loss) available to common shareholders	$	2,542	2,909
Weighted-average common shares outstanding (in millions)	1,178		1,220

Net Income (Loss) Per Share of Common Stock	$	2.16	2.38

Diluted earnings per share

Net Income (Loss) available to common shareholders	$	2,542	2,909
Weighted-average common shares outstanding (in millions)	1,178		1,220
Add: Dilutive impact of options and unvested
non-participating RSU/PSUs (in millions)	2		3
Weighted-average diluted shares outstanding (in millions)	1,180		1,223

Net Income (Loss) Per Share of Common Stock	$	2.15	2.38


	Dollars Per Unit
Average Sales Prices
Crude oil (per bbl)
Consolidated operations	$	78.67	77.60
Equity affiliates	76.94		80.97
Total crude oil	78.64		77.65

Natural gas liquids (per bbl)
Consolidated operations	23.35		24.97
Equity affiliates	52.09		57.71
Total natural gas liquids	24.25		25.84

Bitumen (per bbl)	44.30		29.49

Natural gas (per MCF)
Consolidated operations	2.91		5.65
Equity affiliates	8.26		9.95
Total natural gas	5.02		7.30


	Millions of Dollars
Exploration Expenses
General administrative, geological and geophysical, lease rental and other	$	93	70
Leasehold impairment	—		19
Dry holes	19		49
	$	112	138


	Millions of Dollars
	Three Months Ended March 31, 2024
Revenues and Other Income	$	9,190
Income (loss) before income taxes*	2,462

Net Income (Loss)	2,551


	Millions of Dollars
	March 31, 2024		December 31, 2023
Current assets	$	6,236	8,008
Amounts due from Non-Obligated Subsidiaries, current	1,443		1,565
Noncurrent assets	94,794		91,155
Amounts due from Non-Obligated Subsidiaries, noncurrent	9,550		8,936
Current liabilities	7,938		7,337
Amounts due to Non-Obligated Subsidiaries, current	4,643		3,990
Noncurrent liabilities	50,232		49,105
Amounts due to Non-Obligated Subsidiaries, noncurrent	32,859		31,241


					Millions of Dollars
Period	Total Number of Shares Purchased*	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
January 1 - 31, 2024	1,732,172	$	111.55	1,732,172	$	15,997
February 1 - 29, 2024	3,841,551	111.51		3,841,551	15,569
March 1 - 31, 2024	5,998,801	117.25		5,998,801	14,866
	11,572,524			11,572,524


10.1*			Form of Performance Share Unit Award Terms and Conditions for Performance Period 24, a s part of the ConocoPhillips Performance Share Program granted under the 2023 Omnibus Stock and Performance Incentive Plan of ConocoPhillips, dated February 13, 2024.

10.2*			Form of Executive Restricted Stock Unit Award Terms and Conditions, as part of the ConocoPhillips Executive Restricted Stock Unit Program, granted under the 2023 Omnibus Stock and Performance Incentive Plan of ConocoPhillips, dated February 13, 2024.

10.3*			Form of 2024 Retention Award Terms and Conditions, granted under the 2023 Omnibus Stock and Performance Incentive Plan of ConocoPhillips.

10.4*			Form of 2024 Inducement Award Terms and Conditions, granted under the 2023 Omnibus Stock and Performance Incentive Plan of ConocoPhillips.

31.1*			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.2*			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

32**			Certifications pursuant to 18 U.S.C. Section 1350.

101.INS*			Inline XBRL Instance Document.

101.SCH*			Inline XBRL Schema Document.

101.CAL*			Inline XBRL Calculation Linkbase Document.

101.LAB*			Inline XBRL Labels Linkbase Document.

101.PRE*			Inline XBRL Presentation Linkbase Document.

101.DEF*			Inline XBRL Definition Linkbase Document.

104*			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


			CONOCOPHILLIPS

			/s/ Christopher P. Delk
			Christopher P. Delk
			Vice President, Controller
			and General Tax Counsel
May 2, 2024


			/s/ Ryan M. Lance
			Ryan M. Lance
			Chairman and
			Chief Executive Officer


			/s/ William L. Bullock, Jr.
			William L. Bullock, Jr.
			Executive Vice President and
			Chief Financial Officer