ConocoPhillips: Oil prices to remain volatile for the foreseeable future
ConocoPhillips today announced its 2015 to 2017 capital budget and growth outlook, in which its says the oil prices will remain unstable. The company will thus reduce its three year spending plan from $16 billion per year to $11.5 billion.
“For the past three years, ConocoPhillips has consistently delivered our stated objectives against a backdrop of relatively high, stable commodity prices,” said Ryan Lance, chairman and chief executive officer.
“As commodity prices declined in late 2014, we took decisive action to adjust our 2015 spending. We now believe it is prudent to position the company for lower, more volatile prices for the foreseeable future. Our new plan will continue to focus on delivering a compelling dividend, while also achieving sustainable, modest volume growth and competitive returns. We strongly believe this is an attractive formula for shareholders and we look forward to sharing the details of our plans.”
Details of the 2015 to 2017 plan will be reviewed at the company’s upcoming Analyst and Investor Meeting on April 8, 2015. Key highlights at the meeting will include:
- Reaffirmation of the company’s priorities of a compelling dividend and cash flow neutrality in 2017 and beyond.
- Details on a three-year investment plan that reduces annual capital expenditures to approximately $11.5 billion, versus the company’s previous plan of approximately $16 billion of annual capital expenditures. Under this revised plan the company expects development drilling program spending to increase as major project spending continues to decline.
- Plans for volume growth, which is expected to be 2 to 3 percent in 2015 and increase to 1.7 MMBOED in 2017. The company’s growth outlook excludes production from Libya.
- Additional meeting topics will include an overview of the company’s financial priorities, regional investment programs and projects, details on technology and cost initiatives, and a review of the company’s significant resource base as a source of profitable growth beyond 2017.
“We’re taking this period of commodity price weakness to position ConocoPhillips for long-term success in any price environment,” said Lance. “Our updated plan is more resilient to lower prices, yet allows us to benefit from periods of higher commodity prices. The flexibility of our investment portfolio, our technical capability and our financial strength give us an advantage that we are seizing. We’ve delivered for the past three years and we are committed to continuing our track record of success under this disciplined plan.”