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$5 Billion Returns for ConocoPhillips’ Shareholders as Prices Grow
09/20/2022
Shareholder’s payout target was increased by 50% after the largest U.S. independent oil producer surpass Wall Street’s earnings estimates on growing energy prices, said Houston-based ConocoPhillips Co. on Aug. 4.
Due to Western sanctions on major producer Russia throttling energy supply amid a rebound in demand from pandemic lows, oil and gas prices have soared. Crude has been trading more than 25% higher since the start of the year and results also benefited from high natural gas prices.
Meanwhile, shares were down a fraction, to $91.03, in early trading but are up about 26% year to date.
Its production outlook for the year was reduced by approximately 1% on disruptions to output in Libya, and ConocoPhillips said while inflation was growing its costs, the year’s capital budget would rest at around $7.8 billion.
ConocoPhillips stated, that the average price obtained for a barrel of oil and gas accelerated 77% from a year earlier to $88.57. The company acknowledges that it has not hedged any of its oil and gas sales to make the most of higher market prices.
The capacity of 1.69 million boe/d was in line with Wall Street estimates, however, the company expected the current quarter’s output would be between 1.71 million and 1.76 million boe/d.
ConocoPhillips anticipates returning $15 billion to shareholders this year by means of dividends and share buybacks, joining Chevron Corp. and others in rising payouts after years of pressure on producers to restrict spending and boost returns.
The company, which kept its spending forecast intact, insignificantly decreased its full-year capacity outlook on uncertainty in Libya. ConocoPhillips hoped that the production would be about 1.74 million boe/d for the year.
The company’s second-quarter adjusted earnings of $3.91 per share overcame Wall Street estimates of $3.80 per share, as Refintiv IBES data says.
ConocoPhillips safely transports oil and natural gas using pipelines, tankers, trucks and rail to connect energy supply to demand. The method the company chooses depends on the project, location, economics, accessibility and environmental considerations. All four methods are proven, efficient and economical ways of getting energy to market.
Working with a leading environmental, social and governance (ESG) consultancy firm the company is designing a Net-Zero Governance Framework, with the goal of identifying how to leverage and optimize our process, system, organizational and governance structure to align and drive the company along a net-zero pathway.
In its Gulf Coast business unit, a project is underway to remove the need for pneumatic-powered scavenger injection pumps at each well pad through the installation of scavenger towers at each central facility location. The project could reduce emissions by around 11,250 metric tons per year.
To get deeper into the upstream and midstream energy infrastructure and current trends, please, contact our Houston sales office or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business.
Tyler Reitmeier Tel. +1 713-203-3128 Email: treitmeier@hartenergy.com
Staying on Top of Drilling Activity Trends in the Permian Basin
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Oil output in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. Additionally, gas productivity in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Given that this growth has been expected, recent global market changes make forecasting the output even more challenging. Learning how production will change is easier with early activity tracking, a new service recently launched by Rextag – Pad Activity Monitor. With the help of PAM, you are able to monitor well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days. Additionally, it cuts down activity reporting lag times by at least 98%, from 120-180 days down to just 5-8 days. In order to access reports, charts, tables, and mapping visualizations via Rextag’s Energy DataLink use a web-based application allowing users to filter, download and identify activity on a map or data table. Moreover, customers will be able to set up daily, weekly, and monthly email report notifications.
A major U.S. shale oil producer is looking to start a land selloff in the lone star state
Pioneer Natural resources is looking to divest properties in the lone star state. According to Rextag, Pioneer’s Delaware assets on sale have a trailing 12 month production of just over 22 MBOE against a total Permian Basin production of almost 212 MBOE. (The sale, if it happens, will effectively lead to a 10% decrease of Pioneer’s asset base in terms of the previous year's production.)
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On January 6, Phillips 66 announced that it plans to acquire more than 43% of DCP Midstream LP for $3.8 billion, expanding the business in the oil & gas business.
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On January 5 Northern Oil & Gas (NOG) concluded a deal to acquire working interests in Midland-Petro D.C. Partners LLC (MPDC)'s Mascot Project in the Midland Basin, according to a January 9 press release. Firstly estimated at $330 million in cash, the deal was signed with an additional 3.25% working interest added to the 36.7% agreed upon when the transaction was announced on October 19. NOG paid $29 million more for the additional interests, which now totalled 39.958%. Finally, the deal closed for $320 million in cash and $43 million in debt at signing in October with the finance of Minnetonka, Minn.-based NOG with cash on hand, operating free cash flow, and assistance from its revolving credit facility.
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Talos Energy Inc. is closing its $1.1 billion purchase of private operator EnVen Energy. A special meeting for Talos’ stockholders to vote on the deal and other matters is set on February 8, according to a prospectus filed on January 11 with the Securities and Exchange Commission. Shareholders are being asked to approve the EnVen merger, which as the company considered in September would raise its Gulf of Mexico production up to 40%. According to a January 11 press release, Talos asserted that it anticipates closing the transaction soon after the meeting. Talos Energy Inc. supposes that adding EnVen would double its operated deepwater facility footprint, extending key infrastructure in existing Talos operating areas. More than 80% of the combined assets will be deepwater, with the company operating more than 75% of the acreage it holds interests in. Talos is one of the largest independent operators in the U.S. Gulf of Mexico, with production operations, prospects, leases, and seismic databases spanning the basin in both Deep Water and Shallow Water. The company aims to actively grow through a balanced focus on asset optimization, development, and exploration while also seeking to add to its portfolio through acquisitions and business development.