Financial Performance & Strategic Acquisitions - Kico Phillips achieved strong financial results, reaching the top end of production guidance with lower capital expenditure [2] - The company completed the acquisition of Marathon Oil, resulting in 25% more resources and $1 billion in one-time synergies, along with $1 billion of run-rate synergies [2][3] - Kico Phillips has exceeded its promise to the market by delivering over $2 billion in asset dispositions following the Marathon integration and is not yet finished [3][4] - The company anticipates $7 billion of free cash flow growth over the next four years, effectively doubling its current free cash flow [10] Production Strategy & Cost Management - Kico Phillips is experiencing some deflationary forces offset by tariff impacts, but overall, cost of goods increases have not been significant [5] - The company is operating efficiently in the $60s range and remains constructive on long-term demand growth despite near-term market choppiness [5] - Kico Phillips is already delivering modest 2-3% production growth from a base of 24 million barrels a day [13] M&A & Organic Growth Focus - After a period of active inorganic growth, including mergers with Catch, acquisition of Shell assets, and the Marathon acquisition, Kico Phillips is now focused on organic investments [7][8] - The company possesses significant asset quality and tier-one acreage, providing decades of inventory and economic organic opportunities [8][9] LNG & Infrastructure Development - Kico Phillips is involved in a major project in Port Arthur, anticipating 10 to 15 BCF (billion cubic feet) a day of incremental liquefaction capacity in the US for export [15][16] - Infrastructure permitting reform is crucial to transport gas from production basins to the coast, supporting AI, electrification, and overall power needs [16][17] Market Dynamics & External Factors - Tariffs, sanctions on Iran and Russia, and OPEC+ decisions are creating choppiness in the market [18][19] - Gasoline demand has been softer this summer, potentially due to macro activity, but electrification is still a small factor in the overall oil supply-demand market [22][23][24] - Sustainable prices in the $70s are likely needed to incentivize a broader signal for US rig count to flatten or incline [12]

Production and Financial Performance - Company produced 2,391,000 barrels of oil equivalent per day in Q2 2025, exceeding guidance [2][22] - Adjusted earnings were $1.42 per share, with a $1.5 billion working capital headwind impacting results [3][22] - Returned $2.2 billion to shareholders in Q2, including $1.2 billion in share repurchases and $1 billion in dividends, totaling $4.7 billion in the first half of 2025 [3][23] Capital Expenditures and Asset Sales - Capital expenditures were $3.3 billion, slightly down quarter on quarter [3][22] - Announced divestiture agreement for Anadarko Basin for $1.3 billion, raising total asset sale target from $2 billion to $5 billion by the end of next year [4][29] - Integration of Marathon Oil completed, with over $1 billion in run-rate cost and synergy realization expected by year-end 2025, exceeding the original estimate of $500 million [4][10] Cost Reduction and Operational Efficiency - Identified over $1 billion in additional cost reduction and margin enhancement opportunities, expected to be realized by 2026 [5][28] - Company is delivering more production with 30% fewer rigs and frac crews compared to pre-Marathon Oil levels [7][27] - Effective corporate tax rate projected in the mid- to high-30% range for full year 2025, with a $500 million deferred tax benefit anticipated [7][24] Resource Upgrades and LNG Portfolio - Estimated low-cost supply resource increased by 25% since the Marathon Oil transaction, with Permian Basin estimates approximately doubled [8][25] - Secured an additional 1.5 MTPA of regasification capacity at Dunkirk, France, with all 5 MTPA from Port Arthur placed with buyers [8][53] - Ongoing commercial activities in Europe and Asia for LNG projects, establishing multiyear cash flow growth visibility [8][12] Future Outlook and Free Cash Flow - Company targets a $7 billion free cash flow inflection by 2029 at a $70/bbl WTI price environment [9][21] - Management reiterated full-year 2025 production guidance midpoint, factoring in the impact from the Anadarko sale [6][10] - Anticipates meaningful cash flow enhancement in the second half of 2025 from lower capital spending and higher APLNG distributions [13][24]

Financial Data and Key Metrics Changes - The company produced 2,391,000 barrels of oil equivalent per day, exceeding the high end of production guidance [13] - Adjusted earnings per share were $1.42, with cash flow from operations (CFO) of $4.7 billion [14] - Capital expenditures were $3.3 billion, slightly down quarter on quarter [14] - The company returned $2.2 billion to shareholders, including $1.2 billion in buybacks and $1 billion in ordinary dividends [14] - Cash and short-term investments at the end of the quarter totaled $5.7 billion, plus $1.1 billion in long-term liquid investments [15] Business Line Data and Key Metrics Changes - In the Lower 48, production averaged 1,508,000 barrels of oil equivalent per day [13] - Alaska and International production averaged 883,000 barrels of oil equivalent per day, following successful turnarounds in Norway and Qatar [13] Market Data and Key Metrics Changes - The company reiterated the midpoint of its full-year production guidance despite the sale of its Anadarko Basin asset, which is expected to close at the beginning of the fourth quarter [15] - The effective corporate tax rate is expected to be in the mid to high 30% range, lower than previously guided due to geographical mix [15] Company Strategy and Development Direction - The company aims to distribute about 45% of its full-year CFO to shareholders, consistent with prior guidance and long-term track record [7] - The integration of the Marathon Oil acquisition has been completed, with significant outperformance against the acquisition case [8] - The company has identified over $1 billion in additional cost reduction and margin enhancement opportunities, on top of the previously expected $1 billion in synergies from the Marathon acquisition [9] - The total disposition target has been raised to $5 billion, reflecting a proactive approach to high-grading the portfolio [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate strong returns and enhance long-term value proposition, particularly in the context of the U.S. shale industry's maturation [11] - The company expects a $7 billion free cash flow inflection by 2029, assuming a $70 per barrel WTI price environment [12] - Management noted that the current macro environment is characterized by choppy oil prices, but they remain constructive on long-term demand growth [69] Other Important Information - The company has completed the integration of Marathon assets and is realizing comprehensive outperformance against initial synergy guidance [17] - The company is focused on further cost and margin improvements across the organization, leveraging its scale and recent ERP system implementation [20] Q&A Session Summary Question: Clarification on free cash flow projections - Management confirmed that the math regarding free cash flow projections is accurate and highlighted that some cash flow will come from LNG channels starting next year [25][26] Question: Details on the $1 billion cost reduction plan - Management explained that the cost reduction plan will touch all parts of the company, focusing on G&A, lease operating expenses, and transportation costs [31][32] Question: Insights on the acquisition market - Management indicated that they are rigorously assessing their portfolio and are confident in the market for selling non-core assets, having already surpassed their initial $2 billion target [38][39] Question: Outlook on LNG and regasification sales - Management reported successful placement of LNG capacity and ongoing discussions for future off-take agreements, indicating a strong market outlook [48][49] Question: Long-term outlook for Eagle Ford - Management expressed confidence in the Eagle Ford assets, noting strong well performance and a significant inventory position [81][86]

Financial Data and Key Metrics Changes - The company produced 2,391,000 barrels of oil equivalent per day, exceeding the high end of production guidance [11] - Adjusted earnings per share were $1.42, with cash flow from operations (CFO) of $4.7 billion [12] - Capital expenditures were $3.3 billion, slightly down quarter on quarter [12] - The company returned $2.2 billion to shareholders, including $1.2 billion in buybacks and $1 billion in ordinary dividends [12] - Cash and short-term investments at the end of the quarter totaled $5.7 billion, plus $1.1 billion in long-term liquid investments [13] Business Line Data and Key Metrics Changes - In the Lower 48, production averaged 1,508,000 barrels of oil equivalent per day [11] - Alaska and International production averaged 883,000 barrels of oil equivalent per day, following successful turnarounds in Norway and Qatar [11] - The company has upgraded its low-cost supply resource estimate by 25%, particularly in the Permian Basin [15] Market Data and Key Metrics Changes - The company expects a $70 per barrel WTI price environment to drive a $7 billion free cash flow inflection by 2029 [10] - The effective corporate tax rate for the full year is expected to be in the mid to high 30% range, lower than previously guided due to geographical mix [13] Company Strategy and Development Direction - The company is focused on enhancing its asset base and has identified over $1 billion in additional cost reduction and margin enhancement opportunities [7] - The total disposition target has been raised to $5 billion, reflecting confidence in the asset sales market [19] - The company is investing in longer cycle projects in LNG and Alaska to deliver strong returns and a compelling multi-year free cash flow growth profile [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate strong returns and enhance long-term value proposition [7] - The company is well-positioned for the second half of the year with clear free cash flow tailwinds and continues to find ways to enhance its differentiated long-term investment thesis [20] - Management noted the choppy macro environment for oil prices but remains constructive on long-term demand growth [66][70] Other Important Information - The integration of the Marathon Oil acquisition has been completed, with significant outperformance against initial expectations [6] - The company has identified over $1 billion of one-time benefits, largely cash tax-related, in addition to previously expected synergies [16] Q&A Session Summary Question: Clarification on Free Cash Flow Projections - The math regarding free cash flow projections was confirmed, with expectations of generating about $7 billion of free cash flow between now and 2029 [24][28] Question: Details on Cost Reduction and Margin Optimization - The $1 billion cost reduction plan will impact all areas of the company, focusing on G&A, lease operating expenses, and transportation costs [30][31] Question: Insights on Asset Sales and Market Conditions - The company is confident in the asset sales market and has already surpassed its $2 billion target with $2.5 billion sold [37][93] Question: Deferred Tax Visibility - The effective tax rate was lowered due to a favorable geographical mix, and a deferred tax benefit is expected to continue into 2026 [41][43] Question: LNG Strategy and Future Expectations - The company has successfully placed its entire LNG capacity from Port Arthur and is optimistic about future opportunities in the LNG market [47][48] Question: Outlook for Eagle Ford - The company sees strong performance in Eagle Ford, with significant inventory and production potential, and is sharing best practices across its assets [85][86]

Financial Highlights - ConocoPhillips reported adjusted earnings of $1.793 billion in 2Q25, compared to $2.329 billion in 2Q24[25] - The adjusted EPS was $1.42 in 2Q25[6] - Cash from operations (CFO) was $4.7 billion in 2Q25[6] - Free cash flow (FCF) was $1.4 billion in 2Q25[6] - The company had an ending cash balance of $5.7 billion in 2Q25[6] - The company remains on track to distribute about 45% of full-year CFO to shareholders[6] Production and Sales - 2Q25 production averaged 2,391 MBOED, exceeding the high end of the guidance range (2,340 – 2,380 MBOED)[6] - An agreement to sell Anadarko Basin assets for $1.3 billion in proceeds was announced[6] - Full-year production midpoint remains unchanged, even with the announced Anadarko sale[6] - The company expects APLNG full-year distributions of $0.8 billion, with $0.5 billion in 3Q and $0.1 billion in 4Q[43] Marathon Oil Integration and Synergies - Marathon Oil integration is complete, with >25% increase in low cost of supply resource[8] - >$1 billion of synergies are on track, plus >$1 billion one-time benefits[8] - ~30% fewer rigs and frac crews are delivering more combined production[8] - >$2.5 billion of announced asset sales ahead of schedule, with $5 billion of total asset sales now expected[8] - >$7 billion of incremental FCF is expected by 2029[8]

Core Insights - ConocoPhillips (COP) reported second-quarter 2025 adjusted earnings per share of $1.42, exceeding the Zacks Consensus Estimate of $1.36, but down from $1.98 in the prior-year quarter [1][9] - Quarterly revenues reached $14.7 billion, an increase from $14.1 billion year-over-year, but fell short of the Zacks Consensus Estimate of $14.9 billion [1] Production - Total production averaged 2,391 thousand barrels of oil equivalent per day (MBoe/d), up from 1,945 MBoe/d in the same quarter last year, and surpassed the estimate of 2,353 MBoe/d [3] - Crude oil production rose to 1,155 thousand barrels per day (MBbls/d) from 955 MBbls/d year-over-year, also exceeding the estimate of 1,137 MBbls/d [4] - Natural gas production increased to 4,005 million cubic feet per day (MMcf/d) from 3,370 MMcf/d in the prior year [4] Realized Prices - The average realized oil equivalent price decreased to $45.77 per barrel from $56.56 a year ago [5] - The average realized crude oil price was $64.23 per barrel, down from $81.30 year-over-year [5] - The average realized natural gas price was $4.16 per thousand cubic feet, slightly down from $4.22 in the previous year [6] Total Expenses - Total expenses increased to $11.7 billion from $10.5 billion in the corresponding period of 2024, which was below the projected $12.2 billion [7] - The cost of purchased commodities rose to $5.1 billion from $4.9 billion year-over-year [7] Balance Sheet & Capital Spending - As of June 30, 2025, ConocoPhillips had $4.9 billion in cash and cash equivalents, with total long-term debt of $23.1 billion and short-term debt of $414 million [8] - Capital expenditure and investments totaled $3.29 billion, while net cash provided by operating activities was $3.5 billion [10] Guidance - For the third quarter of 2025, production is expected to be in the range of 2.33 to 2.37 MBoe/d, with full-year production anticipated to be between 2.35-2.37 MBoe/d [11]

Core Insights - ConocoPhillips reported revenue of $14.74 billion for the quarter ended June 2025, reflecting a 4.3% increase year-over-year, but fell short of the Zacks Consensus Estimate by 1.25% [1] - The company's EPS was $1.42, down from $1.98 in the same quarter last year, but exceeded the consensus estimate of $1.36 by 4.41% [1] Financial Performance - Total production per day was 2,391 million barrels of oil equivalent, surpassing the eight-analyst average estimate of 2,362.71 million barrels [4] - Natural gas production was 4,005 million cubic feet per day, exceeding the seven-analyst average estimate of 3,985.42 million cubic feet [4] - Crude oil production was 1,155 million barrels per day, slightly above the six-analyst average estimate of 1,153.05 million barrels [4] - Sales and other operating revenues were reported at $14 billion, lower than the five-analyst average estimate of $14.68 billion, but showed a year-over-year increase of 2.8% [4] - Equity in earnings of affiliates was $315 million, exceeding the four-analyst average estimate of $259.2 million, but represented a year-over-year decline of 21.8% [4] Market Performance - ConocoPhillips shares returned -1.5% over the past month, while the Zacks S&P 500 composite increased by 1.2% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Core Viewpoint - ConocoPhillips reported quarterly earnings of $1.42 per share, exceeding the Zacks Consensus Estimate of $1.36 per share, but down from $1.98 per share a year ago, indicating a mixed performance in earnings despite a positive surprise [1][2]. Financial Performance - The company achieved revenues of $14.74 billion for the quarter ended June 2025, which was 1.25% below the Zacks Consensus Estimate, but an increase from $14.14 billion year-over-year [2]. - Over the last four quarters, ConocoPhillips has surpassed consensus EPS estimates four times and topped revenue estimates twice [2]. Stock Performance - ConocoPhillips shares have declined approximately 6.1% since the beginning of the year, contrasting with the S&P 500's gain of 7.9% [3]. - The current Zacks Rank for ConocoPhillips is 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [6]. Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $1.52, with projected revenues of $15.36 billion, and for the current fiscal year, the EPS estimate is $6.45 on revenues of $62.29 billion [7]. - The trend of estimate revisions for ConocoPhillips was mixed prior to the earnings release, indicating potential volatility in future earnings expectations [6]. Industry Context - The Oil and Gas - Integrated - United States industry, to which ConocoPhillips belongs, is currently ranked in the bottom 14% of over 250 Zacks industries, which may negatively impact stock performance [8].

[Commonly Used Abbreviations](index=3&type=section&id=Commonly%20Used%20Abbreviations) [Part I—Financial Information](index=4&type=section&id=Part%20I%E2%80%94Financial%20Information) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) ConocoPhillips' unaudited consolidated financial statements for Q2 2025 and FY2024, covering income, comprehensive income, balance sheet, and cash flow, are presented for review [Consolidated Income Statement](index=4&type=section&id=Consolidated%20Income%20Statement) Net income decreased for Q2 and H1 2025 due to lower realized prices, despite higher sales volumes Consolidated Income Statement Data | Metric | Three Months Ended June 30, 2025 (Millions of Dollars) | Three Months Ended June 30, 2024 (Millions of Dollars) | Six Months Ended June 30, 2025 (Millions of Dollars) | Six Months Ended June 30, 2024 (Millions of Dollars) | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Sales and other operating revenues | $14,004 | $13,620 | $30,521 | $27,468 | | Total Revenues and Other Income | $14,740 | $14,136 | $31,841 | $28,612 | | Total Costs and Expenses | $11,723 | $10,477 | $24,358 | $21,145 | | Income (loss) before income taxes | $3,017 | $3,659 | $7,483 | $7,467 | | Income tax provision (benefit) | $1,046 | $1,330 | $2,663 | $2,587 | | Net Income (Loss) | $1,971 | $2,329 | $4,820 | $4,880 | | Basic EPS ($) | $1.56 | $1.99 | $3.80 | $4.15 | | Diluted EPS ($) | $1.56 | $1.98 | $3.79 | $4.14 | [Consolidated Statement of Comprehensive Income](index=5&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) Comprehensive income increased for Q2 and H1 2025, primarily due to positive foreign currency translation adjustments, despite lower net income Consolidated Statement of Comprehensive Income Data | Metric | Three Months Ended June 30, 2025 (Millions of Dollars) | Three Months Ended June 30, 2024 (Millions of Dollars) | Six Months Ended June 30, 2025 (Millions of Dollars) | Six Months Ended June 30, 2024 (Millions of Dollars) | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net Income (Loss) | $1,971 | $2,329 | $4,820 | $4,880 | | Other Comprehensive Income (Loss), Net of Tax | $492 | $(44) | $571 | $(288) | | Comprehensive Income (Loss) | $2,463 | $2,285 | $5,391 | $4,592 | - Foreign currency translation adjustments significantly impacted Other Comprehensive Income (Loss), shifting from a **$(303) million loss in H1 2024** to a **$554 million gain in H1 2025**[14](index=14&type=chunk) [Consolidated Balance Sheet](index=6&type=section&id=Consolidated%20Balance%20Sheet) Total assets and liabilities slightly decreased from December 31, 2024, to June 30, 2025, while total equity increased Consolidated Balance Sheet Data | Metric | June 30, 2025 (Millions of Dollars) | December 31, 2024 (Millions of Dollars) | | :------------------------------------------------------------------------------------------------ | :-------------- | :---------------- | | Total Current Assets | $13,939 | $15,647 | | Investments and long-term receivables | $10,361 | $9,869 | | Net properties, plants and equipment (net of accumulated DD&A) | $95,242 | $94,356 | | Other assets | $3,057 | $2,908 | | Total Assets | $122,599 | $122,780 | | Total Current Liabilities | $10,986 | $12,124 | | Long-term debt | $23,115 | $23,289 | | Total Liabilities | $57,027 | $57,984 | | Total Equity | $65,572 | $64,796 | | Total Liabilities and Equity | $122,599 | $122,780 | [Consolidated Statement of Cash Flows](index=7&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) Net cash from operating activities slightly decreased in H1 2025, while investing activities used less cash and financing activities used more Consolidated Statement of Cash Flows Data | Metric | Six Months Ended June 30, 2025 (Millions of Dollars) | Six Months Ended June 30, 2024 (Millions of Dollars) | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Net Cash Provided by Operating Activities | $9,600 | $9,904 | | Net Cash Used in Investing Activities | $(4,807) | $(6,292) | | Net Cash Used in Financing Activities | $(5,620) | $(4,868) | | Net Change in Cash, Cash Equivalents and Restricted Cash | $(679) | $(1,325) | | Cash, Cash Equivalents and Restricted Cash at End of Period | $5,226 | $4,574 | - Net cash provided by operating activities decreased by **$304 million in H1 2025**, primarily due to changes in operational working capital driven by tax payment timing, partly offset by lower accounts receivable[19](index=19&type=chunk)[216](index=216&type=chunk) - Net cash used in investing activities decreased by **$1,485 million**, largely due to higher proceeds from asset dispositions (**$1,341 million in H1 2025** vs. **$178 million in H1 2024**) and working capital changes[19](index=19&type=chunk) - Net cash used in financing activities increased by **$752 million**, mainly due to higher share repurchases (**$2,722 million in H1 2025** vs. **$2,346 million in H1 2024**) and dividends paid (**$1,982 million in H1 2025** vs. **$1,839 million in H1 2024**)[19](index=19&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [Note 1—Basis of Presentation](index=9&type=section&id=Note%201%E2%80%94Basis%20of%20Presentation) Interim financial statements are unaudited, include all necessary adjustments, and should be read with the 2024 Annual Report on Form 10-K - The interim financial information is **unaudited** and includes all known accruals and adjustments necessary for a fair presentation[21](index=21&type=chunk) - These financial statements should be read in conjunction with the consolidated financial statements and notes included in the **2024 Annual Report on Form 10-K**[21](index=21&type=chunk) [Note 2—Inventories](index=9&type=section&id=Note%202%E2%80%94Inventories) Total inventories slightly increased from December 31, 2024, to June 30, 2025, with crude oil and natural gas as the largest component Inventories Data | Category | June 30, 2025 (Millions of Dollars) | December 31, 2024 (Millions of Dollars) | | :------------------------ | :-------------- | :---------------- | | Crude oil and natural gas | $1,013 | $907 | | Materials and supplies | $884 | $902 | | Total inventories | $1,897 | $1,809 | | Inventories valued on the LIFO basis | $588 | $578 | [Note 3—Acquisitions and Dispositions](index=9&type=section&id=Note%203%E2%80%94Acquisitions%20and%20Dispositions) ConocoPhillips acquired Marathon Oil for $16.5 billion in November 2024 and completed asset dispositions generating $1.3 billion in proceeds - Acquisition of Marathon Oil Corporation completed in **November 2024**, valued at **$16.5 billion**, primarily through the exchange of **0.255 shares** of ConocoPhillips common stock for each Marathon Oil share[23](index=23&type=chunk) - Acquired proved properties of approximately **$13 billion** (**$12 billion in Lower 48**, **$1 billion in Equatorial Guinea**) and unproved properties of approximately **$11 billion in Lower 48**[28](index=28&type=chunk) - Recognized approximately **$585 million pre-tax** in transaction-related costs to date, including **$17 million** and **$40 million** in the three- and six-month periods of 2025, respectively[29](index=29&type=chunk) - Sold noncore assets in the Lower 48 segment for **$581 million in Q1 2025**, recognizing a **$64 million pre-tax gain**[33](index=33&type=chunk) - Sold interests in the Ursa and Europa fields and Ursa Oil Pipeline Company LLC for **$718 million in Q2 2025**, recognizing a **$274 million pre-tax gain**[34](index=34&type=chunk) - Signed an agreement in **July 2025** to divest Lower 48 assets in the Anadarko Basin for approximately **$1.3 billion**, expected to close in **Q4 2025**[35](index=35&type=chunk) [Note 4—Investments and Long-Term Receivables](index=12&type=section&id=Note%204%E2%80%94Investments%20and%20Long-Term%20Receivables) Significant equity method investments in LNG projects, including APLNG, PALNG, and Qatar LNG, totaled approximately $8.3 billion at June 30, 2025 - Carrying value of equity method investment in Australia Pacific LNG (APLNG) was approximately **$5.2 billion** at **June 30, 2025**[36](index=36&type=chunk) - Carrying value of equity method investment in Port Arthur LNG (PALNG) was approximately **$1.6 billion** at **June 30, 2025**[37](index=37&type=chunk) - Carrying value of equity method investments in Qatar LNG (N3, NFE4, NFS3 joint ventures) was approximately **$1.5 billion** at **June 30, 2025**[38](index=38&type=chunk)[43](index=43&type=chunk) [Note 5—Debt](index=12&type=section&id=Note%205%E2%80%94Debt) Total debt decreased to $23.5 billion at June 30, 2025, due to $0.7 billion in principal retirement, and the $5.5 billion credit facility was refinanced - Total debt balance at **June 30, 2025**, was **$23.5 billion**, down from **$24.3 billion** at **December 31, 2024**[39](index=39&type=chunk) - Retired **$0.2 billion** principal amount of **3.35% Notes in May 2025** and **$0.5 billion** of other debt in **Q1 2025**[39](index=39&type=chunk) - Refinanced revolving credit facility in **February 2025**, maintaining **$5.5 billion** aggregate principal amount and extending expiration to **February 2030**[40](index=40&type=chunk) - Had access to **$5.5 billion** in available borrowing capacity under the revolving credit facility at **June 30, 2025**, with no commercial paper outstanding[42](index=42&type=chunk) - Current long-term debt credit ratings are **Fitch: \"A\" (stable)**, **S&P: \"A-\" (stable)**, **Moody's: \"A2\" (stable)**[230](index=230&type=chunk) [Note 6—Suspended Wells and Exploration Expenses](index=13&type=section&id=Note%206%E2%80%94Suspended%20Wells%20and%20Exploration%20Expenses) Capitalized costs for suspended wells increased by $13 million to $209 million, primarily due to a successful Norwegian Sea appraisal well - Capitalized cost of suspended wells increased by **$13 million** to **$209 million** at **June 30, 2025**, from **December 31, 2024**[46](index=46&type=chunk) - A **$77 million increase** in suspended wells costs resulted from the second Slagugle appraisal well in the Norwegian Sea confirming hydrocarbons[46](index=46&type=chunk) - Recognized dry hole expenses of **$36 million in Q1 2025** related to previously suspended wells in the Asia Pacific segment[47](index=47&type=chunk) [Note 7—Changes in Equity](index=14&type=section&id=Note%207%E2%80%94Changes%20in%20Equity) Total equity increased to $65.572 billion at June 30, 2025, driven by net income and other comprehensive income, offset by dividends and share repurchases Changes in Equity Data | Metric | December 31, 2024 (Millions of Dollars) | Six Months Ended June 30, 2025 (Millions of Dollars) | June 30, 2025 (Millions of Dollars) | | :-------------------------------- | :---------------- | :----------------------------- | :-------------- | | Balances at Beginning of Period | $64,796 | | | | Net income (loss) | | $4,820 | | | Other comprehensive income (loss) | | $571 | | | Dividends declared | | $(1,982) | | | Repurchase of company common stock | | $(2,722) | | | Excise tax on share repurchases | | $(25) | | | Distributed under benefit plans | | $114 | | | Balances at End of Period | | | $65,572 | [Note 8—Guarantees](index=15&type=section&id=Note%208%E2%80%94Guarantees) ConocoPhillips is liable for contingent obligations related to APLNG, QatarEnergy LNG, and Equatorial Guinea, totaling $1.5 billion in maximum potential payments - APLNG guarantees include a **$210 million maximum exposure** for a project finance reserve account (carrying value **$14 million**) and a **$620 million maximum potential liability** for natural gas delivery sales agreements[53](index=53&type=chunk) - Other APLNG performance guarantees have a maximum potential of **$570 million** (carrying value **$39 million**)[53](index=53&type=chunk) - QatarEnergy LNG guarantees have no maximum limit, with a carrying value of approximately **$14 million**[50](index=50&type=chunk) - Equatorial Guinea guarantees have a maximum potential of **$116 million**, with a carrying value of approximately **$4 million**[51](index=51&type=chunk) - Indemnification obligations recorded at **$40 million** at **June 30, 2025**, with generally indefinite terms and unlimited maximum amounts for environmental issues[54](index=54&type=chunk) [Note 9—Contingencies, Commitments and Accrued Environmental Costs](index=16&type=section&id=Note%209%E2%80%94Contingencies%2C%20Commitments%20and%20Accrued%20Environmental%20Costs) ConocoPhillips faces various lawsuits and claims, including environmental remediation, accruing liabilities when probable and estimable, with $206 million in environmental costs - Accrues liabilities for known contingencies when the loss is **probable** and **reasonably estimable**, using the low end of a range if no better estimate[55](index=55&type=chunk) - Total accrued environmental costs for remediation activities in the U.S. and Canada were **$206 million** at **June 30, 2025**, and **December 31, 2024**[60](index=60&type=chunk) - An ICSID tribunal upheld an **$8.5 billion award plus interest** against Venezuela for unlawful expropriation, and ICC arbitrations resulted in additional awards of approximately **$2 billion** and **$33 million plus interest** against PDVSA. The company has received approximately **$791 million** related to the first ICC award[64](index=64&type=chunk) - Vigorously defending against climate change lawsuits filed by governmental entities in several U.S. states/territories, believing them to be **factually and legally meritless**[66](index=66&type=chunk) [Note 10—Derivative and Financial Instruments](index=19&type=section&id=Note%2010%E2%80%94Derivative%20and%20Financial%20Instruments) ConocoPhillips uses commodity and interest rate derivatives to manage market risks and invests in financial instruments, primarily debt securities, managed by cash forecasts - Commodity derivative instruments are held at fair value; gross fair values (excluding collateral) at **June 30, 2025**, were **$583 million in assets** and **$558 million in liabilities**[74](index=74&type=chunk)[75](index=75&type=chunk) - PALNG dedesignated remaining interest rate swaps as cash flow hedges in **Q1 2025**, recognizing a gain of **$18 million (Q2 2025)** and **$33 million (H1 2025)** in "Equity in earnings of affiliates"[76](index=76&type=chunk)[77](index=77&type=chunk) - Investments in debt securities classified as available for sale totaled **$1,585 million** at fair value at **June 30, 2025**[80](index=80&type=chunk)[81](index=81&type=chunk) - Manages credit risk for OTC derivative contracts through predetermined credit limits and cash-call margins; trade receivables have a broad customer base and short payment terms[84](index=84&type=chunk)[85](index=85&type=chunk) - Aggregate fair value of derivative instruments with credit risk-related contingent features in a liability position was **$82 million** at **June 30, 2025**; a downgrade below investment grade would require **$43 million** in additional collateral[87](index=87&type=chunk) [Note 11—Fair Value Measurement](index=23&type=section&id=Note%2011%E2%80%94Fair%20Value%20Measurement) Certain assets and liabilities are measured at fair value using a hierarchy, including debt securities, commodity derivatives, and contingent consideration for the Surmont acquisition Fair Value Measurement Data | Category | Level 1 (Millions of Dollars) | Level 2 (Millions of Dollars) | Level 3 (Millions of Dollars) | Total (Millions of Dollars) | | :-------------------------- | :------ | :------ | :------ | :------ | | Investments in debt securities | $244 | $1,341 | $0 | $1,585 | | Commodity derivatives (Assets) | $301 | $251 | $31 | $583 | | Commodity derivatives (Liabilities) | $333 | $173 | $52 | $558 | | Contingent consideration | $0 | $0 | $99 | $99 | - The fair value of contingent consideration for the Surmont acquisition was **$99 million** at **June 30, 2025**, with **$56 million** in payments made during **H1 2025**[93](index=93&type=chunk)[94](index=94&type=chunk) [Note 12—Accumulated Other Comprehensive Income (Loss)](index=26&type=section&id=Note%2012%E2%80%94Accumulated%20Other%20Comprehensive%20Income%20%28Loss%29) Accumulated other comprehensive income (loss) improved to $(5,902) million at June 30, 2025, primarily due to positive foreign currency translation adjustments Accumulated Other Comprehensive Income (Loss) Data | Component | December 31, 2024 (Millions of Dollars) | Other Comprehensive Income (Loss) (H1 2025) (Millions of Dollars) | June 30, 2025 (Millions of Dollars) | | :-------------------------------- | :---------------- | :------------------------------------------ | :-------------- | | Defined Benefit Plans | $(390) | $13 | $(377) | | Unrealized Holding Gain/(Loss) on Securities | $3 | $4 | $7 | | Foreign Currency Translation | $(6,104) | $554 | $(5,550) | | Unrealized Gain/(Loss) on Hed

[Consolidated Financial Statements](index=1&type=section&id=Consolidated%20Financial%20Statements) This section provides a comprehensive overview of the company's financial performance and position, including income, balance sheet, and cash flow statements, along with detailed tax rates and segment earnings [Consolidated Income Statement](index=1&type=section&id=Consolidated%20Income%20Statement) The company reported total revenues and other income of $56,953 million for the full year 2024, decreasing to $31,841 million YTD 2025 (Q1+Q2) Net income for full year 2024 was $9,245 million, with basic EPS of $7.82 For 2025 YTD, net income was $4,820 million and basic EPS was $3.80 | Metric | Full Year 2024 ($ Millions) | YTD 2025 ($ Millions) | | :----------------------------- | :-------------------------- | :---------------------- | | Total Revenues and Other Income | 56,953 | 31,841 | | Total Costs and Expenses | 43,281 | 24,358 | | Income (loss) before income taxes | 13,672 | 7,483 | | Income tax provision (benefit) | 4,427 | 2,663 | | Net Income (loss) | 9,245 | 4,820 | | Basic EPS ($) | 7.82 | 3.80 | | Diluted EPS ($) | 7.81 | 3.79 | [Effective Income Tax Rates](index=2&type=section&id=Effective%20Income%20Tax%20Rates) The consolidated effective income tax rate for the full year 2024 was 32.4%, increasing to 35.6% for 2025 YTD Regional rates varied significantly, with Europe, Middle East and North Africa having the highest rates (70.6% in 2024, 69.8% in 2025 YTD) and Asia Pacific having lower rates (10.9% in 2024, 17.0% in 2025 YTD) | Segment | Full Year 2024 (%) | YTD 2025 (%) | | :---------------------------------- | :------------- | :--------- | | Alaska | 26.6 | 28.7 | | Lower 48 | 22.0 | 20.7 | | Canada | 24.2 | 24.5 | | Europe, Middle East and North Africa | 70.6 | 69.8 | | Asia Pacific | 10.9 | 17.0 | | Other International | 42.0 | 11.4 | | Corporate and Other | 47.9 | 19.5 | | Consolidated | 32.4 | 35.6 | [Earnings by Segment](index=3&type=section&id=Earnings%20by%20Segment) Consolidated net income for full year 2024 was $9,245 million, with Lower 48 being the largest contributor at $5,175 million For 2025 YTD, consolidated net income was $4,820 million, with Lower 48 contributing $3,189 million Special items had a net positive impact of $21 million in 2024 and $348 million in 2025 YTD | Segment | Net Income (Full Year 2024, $ Millions) | Net Income (YTD 2025, $ Millions) | Special Items (Full Year 2024, $ Millions) | Special Items (YTD 2025, $ Millions) | Adjusted Earnings (Full Year 2024, $ Millions) | Adjusted Earnings (YTD 2025, $ Millions) | | :---------------------------------- | :-------------------------------------- | :---------------------------------- | :--------------------------------------- | :----------------------------------- | :------------------------------------------- | :--------------------------------------- | | Alaska | 1,326 | 462 | — | 58 | 1,326 | 404 | | Lower 48 | 5,175 | 3,189 | (4) | 300 | 5,179 | 2,889 | | Canada | 712 | 405 | — | — | 712 | 405 | | Europe, Middle East and North Africa | 1,189 | 656 | — | — | 1,189 | 656 | | Asia Pacific | 1,724 | 641 | 76 | — | 1,648 | 641 | | Other International | (1) | 3 | — | — | (1) | 3 | | Corporate and Other | (880) | (536) | (51) | (10) | (829) | (526) | | Consolidated | 9,245 | 4,820 | 21 | 348 | 9,224 | 4,472 | [Adjusted Effective Income Tax Rates](index=4&type=section&id=Adjusted%20Effective%20Income%20Tax%20Rates) Presents effective income tax rates adjusted for special items across various segments and consolidated The consolidated adjusted effective income tax rate for the full year 2024 was 35.5%, increasing to 37.0% for 2025 YTD Regional variations persist, with Europe, Middle East and North Africa showing the highest adjusted rates | Segment | Full Year 2024 (%) | YTD 2025 (%) | | :---------------------------------- | :------------- | :--------- | | Alaska | 26.6 | 29.3 | | Lower 48 | 22.0 | 21.9 | | Canada | 24.2 | 24.5 | | Europe, Middle East and North Africa | 70.6 | 69.8 | | Asia Pacific | 14.8 | 17.0 | | Other International | 42.0 | 11.4 | | Corporate and Other | 22.3 | 19.5 | | Consolidated | 35.5 | 37.0 | [Detailed Special Items](index=5&type=section&id=Detailed%20Special%20Items) Provides a detailed reconciliation of special items affecting earnings, categorized by segment and type (e.g., claims, restructuring, asset sales, impairments) Special items for 2025 YTD totaled $348 million, primarily driven by gains on asset sales in Lower 48 ($338 million) and pending claims/settlements in Alaska ($77 million) | Segment | Item | Full Year 2024 ($ Millions) | YTD 2025 ($ Millions) | | :------------------ | :-------------------------------------- | :-------------------------- | :---------------------- | | Alaska | Pending claims and settlements | — | 77 | | Lower 48 | Gain (loss) on asset sales | 86 | 338 | | Lower 48 | Transaction, integration and restructuring expenses | (43) | (20) | | Corporate and Other | Transaction, integration and restructuring expenses | (499) | (91) | | Corporate and Other | Gain (loss) on interest rate hedge | 35 | 33 | | Total Company | Consolidated | 21 | 348 | - A tax adjustment in 1Q24 related to Malaysia deepwater investment tax incentive[5](index=5&type=chunk) - **Interest rate hedging gain (loss)** from PALNG Phase 1 Investment[5](index=5&type=chunk) - **Tax adjustment** related to the Marathon Oil acquisition and a deferred tax adjustment related to finalization of federal income tax regulations related to foreign currency in 4Q24[5](index=5&type=chunk) [Consolidated Balance Sheet](index=6&type=section&id=Consolidated%20Balance%20Sheet) Presents the company's financial position, including assets, liabilities, and equity, at various quarter-ends for 2024 and 2025 As of June 30, 2025 (2nd Qtr), total assets were $122,599 million, total liabilities were $57,027 million, and total equity was $65,572 million Compared to full year 2024, total assets decreased slightly from $122,780 million, while total equity increased from $64,796 million | Metric | Full Year 2024 ($ Millions) | 2nd Qtr 2025 ($ Millions) | | :---------------------------------- | :-------------------------- | :------------------------ | | Total Current Assets | 15,647 | 13,939 | | Total Assets | 122,780 | 122,599 | | Total Current Liabilities | 12,124 | 10,986 | | Long-term debt | 23,289 | 23,115 | | Total Liabilities | 57,984 | 57,027 | | Total Equity | 64,796 | 65,572 | [Cash Flow Information](index=7&type=section&id=Cash%20Flow%20Information) Details cash flows from operating, investing, and financing activities, along with the impact of exchange rate changes on cash and cash equivalents For the full year 2024, net cash provided by operating activities was $20,124 million, while net cash used in investing activities was $(11,150) million and net cash used in financing activities was $(8,835) million For 2025 YTD, operating cash flow was $9,600 million, investing cash flow was $(4,807) million, and financing cash flow was $(5,620) million | Metric | Full Year 2024 ($ Millions) | YTD 2025 ($ Millions) | | :---------------------------------- | :-------------------------- | :---------------------- | | Net Cash Provided by Operating Activities | 20,124 | 9,600 | | Net Cash Used in Investing Activities | (11,150) | (4,807) | | Net Cash Used in Financing Activities | (8,835) | (5,620) | | Net Change in Cash, Cash Equivalents and Restricted Cash | 6 | (679) | | Cash, Cash Equivalents and Restricted Cash at End of Period | 5,905 | 5,226 | [Capital Expenditures and Investments](index=7&type=section&id=Capital%20Expenditures%20and%20Investments) Breakdown of capital expenditures and investments by geographical segment for 2024 and 2025 YTD Total capital expenditures and investments for the full year 2024 amounted to $12,118 million, with Lower 48 ($6,510 million) and Alaska ($3,194 million) being the largest recipients For 2025 YTD, total capital expenditures were $6,664 million, with Lower 48 ($3,518 million) and Alaska ($2,032 million) continuing to dominate | Segment | Full Year 2024 ($ Millions) | YTD 2025 ($ Millions) | | :---------------------------------- | :-------------------------- | :---------------------- | | Alaska | 3,194 | 2,032 | | Lower 48 | 6,510 | 3,518 | | Canada | 551 | 309 | | Europe, Middle East and North Africa | 1,021 | 630 | | Asia Pacific | 370 | 118 | | Corporate and Other | 472 | 57 | | Total Capital Expenditures and Investments | 12,118 | 6,664 | [Operational Performance](index=8&type=section&id=Operational%20Performance) This section analyzes the company's production volumes, including crude oil and natural gas, alongside industry and realized prices, and details exploration and depreciation, depletion, and amortization expenses [Production Volumes](index=8&type=section&id=Production%20Volumes) Presents total production volumes in MBOED and detailed breakdowns by crude oil, NGL, bitumen, and natural gas, for both consolidated operations and equity affiliates, across various regions Total production for the full year 2024 was 1,987 MBOED, increasing to 2,391 MBOED for 2025 YTD Crude oil production from consolidated operations was 969 MBD in 2024, rising to 1,149 MBD in 2025 YTD | Metric | Full Year 2024 | YTD 2025 | | :---------------------------------- | :------------- | :--------- | | Total Production (MBOED) | 1,987 | 2,391 | | Crude Oil (MBD) - Consolidated operations | 969 | 1,149 | | Crude Oil (MBD) - Equity affiliates | 13 | 12 | | NGL (MBD) - Consolidated operations | 304 | 406 | | Bitumen (MBD) - Consolidated operations | 122 | 144 | | Natural Gas (MMCFD) - Consolidated operations | 2,200 | 2,848 | | Natural Gas (MMCFD) - Equity affiliates | 1,233 | 1,190 | - Lower 48 and Alaska are significant contributors to crude oil production, with Lower 48 consolidated operations producing **602 MBD** in 2024 and **757 MBD** in 2025 YTD, and Alaska producing **173 MBD** in 2024 and **183 MBD** in 2025 YTD[10](index=10&type=chunk) [Industry and Realized Prices](index=8&type=section&id=Industry%20and%20Realized%20Prices) Provides key industry benchmark prices for crude oil (WTI, Brent, JCC) and natural gas (Henry Hub), alongside the company's average realized prices for crude oil, NGL, bitumen, and natural gas, broken down by consolidated operations and equity affiliates Industry crude oil prices generally decreased from 2024 to 2025 YTD, while Henry Hub natural gas prices increased The company's average realized price for total production decreased from $54.83/BOE in 2024 to $49.54/BOE in 2025 YTD | Metric | Full Year 2024 | YTD 2025 | | :---------------------------------- | :------------- | :--------- | | WTI Crude Oil ($/BBL) | 75.72 | 67.58 | | Brent Dated Crude Oil ($/BBL) | 80.76 | 71.74 | | Henry Hub Natural Gas ($/MMBTU) | 2.27 | 3.55 | | Average Realized Price Total ($/BOE) | 54.83 | 49.54 | | Average Realized Crude Oil ($/BBL) - Consolidated | 76.74 | 67.92 | | Average Realized Natural Gas ($/MCF) - Consolidated | 2.61 | 3.88 | - Average realized natural gas prices for consolidated operations significantly increased from **$2.61/MCF** in 2024 to **$3.88/MCF** in 2025 YTD[8](index=8&type=chunk)[11](index=11&type=chunk) [Exploration and DD&A Expenses](index=9&type=section&id=Exploration%20and%20DD%26A%20Expenses) Details exploration expenses, including dry hole costs and leasehold impairments, and depreciation, depletion, and amortization (DD&A) expenses by segment Total exploration expenses for the full year 2024 were $355 million, increasing to $198 million for 2025 YTD Total DD&A expenses were $9,599 million in 2024, with Lower 48 accounting for the largest portion ($6,442 million) | Metric | Full Year 2024 ($ Millions) | YTD 2025 ($ Millions) | | :---------------------------------- | :-------------------------- | :---------------------- | | Total Exploration Expenses | 355 | 198 | | Dry holes (noncash) | 40 | 49 | | Leasehold impairment (noncash) | 6 | 36 | | Total DD&A | 9,599 | 5,584 | | DD&A - Lower 48 | 6,442 | 3,907 | | DD&A - Alaska | 1,299 | 716 | [Corporate and Other Financials](index=13&type=section&id=Corporate%20and%20Other%20Financials) This section outlines the financial performance of corporate and other segments, including net interest expense and G&A, along with key debt and equity metrics [Corporate and Other Earnings/Loss](index=13&type=section&id=Corporate%20and%20Other%20Earnings%2FLoss) Provides a detailed breakdown of earnings and losses attributable to corporate and other segments, including net interest expense, G&A, and technology investments The Corporate and Other segment reported a net loss of $(880) million for the full year 2024, and $(536) million for 2025 YTD, primarily driven by net interest expense and corporate G&A expenses | Metric | Full Year 2024 ($ Millions) | YTD 2025 ($ Millions) | | :---------------------------------- | :-------------------------- | :---------------------- | | Corporate and Other Earnings (Loss) | (880) | (536) | | Net interest expense (net of tax) | (379) | (250) | | Corporate G&A expenses (net of tax) | (716) | (257) | | Technology* (net of tax) | (137) | (40) | - Technology investments include new technologies or businesses outside the normal scope of operations and licensing revenues[12](index=12&type=chunk) [Debt and Equity](index=13&type=section&id=Debt%20and%20Equity) Presents key debt and equity metrics, including total debt, debt-to-capital ratio, and total equity Total debt increased from $18,417 million in Q1 2024 to $24,324 million for the full year 2024, then slightly decreased to $23,529 million by Q2 2025 The debt-to-capital ratio remained stable at 27% for 2024 and 26% for 2025 YTD Total equity increased from $49,325 million in Q1 2024 to $64,796 million for the full year 2024, and further to $65,572 million by Q2 2025 | Metric | Full Year 2024 ($ Millions) | 2nd Qtr 2025 ($ Millions) | | :---------------------------------- | :-------------------------- | :------------------------ | | Total debt | 24,324 | 23,529 | | Debt-to-capital ratio | 27 % | 26 % | | Total Equity | 64,796 | 65,572 | [Reference Information](index=13&type=section&id=Reference%20Information) This section provides a comprehensive list of commonly used abbreviations and definitions for units of measurement within the report [Commonly Used Abbreviations](index=13&type=section&id=Commonly%20Used%20Abbreviations) This section provides a list of abbreviations used in the financial report, such as DD&A for Depreciation, Depletion and Amortization, G&A for General and Administrative, and WTI for West Texas Intermediate [Units of Measurement](index=13&type=section&id=Units%20of%20Measurement) This section defines the units of measurement used for various operational metrics in the report, including BBL for Barrel, MBOED for Thousand of Barrels of Oil Equivalent per Day, and MMCFD for Million Cubic Feet per Day