Group 1: ConocoPhillips and Kebabangan Gas Field - ConocoPhillips has taken full operatorship of the Kebabangan gas field in East Malaysia, previously operated jointly with Petronas and Shell [1] - The Kebabangan gas field has an export capacity of up to 750 million standard cubic feet per day and is estimated to hold nearly 2.2 trillion cubic feet of gas [2] - New commercial agreements have been secured to ensure the gas field's developments remain economically viable until 2050, supporting regional energy requirements in Sabah [2] Group 2: Industry Comparisons and Rankings - ConocoPhillips currently holds a Zacks Rank 3 (Hold), indicating a neutral outlook [3] - Other energy sector stocks with better rankings include Sunoco LP and Equinor ASA, both with Zacks Rank 1 (Strong Buy), and Cheniere Energy, which has a Zacks Rank 2 (Buy) [3] Group 3: Competitor Insights - Sunoco LP is a major distributor of motor fuel in the U.S., providing consistent returns to unitholders with a distribution yield greater than the industry average [4] - Equinor ASA is a leading integrated energy company and the second-largest natural gas supplier in Europe, focusing on renewable energy for long-term growth [5] - Cheniere Energy is expanding its LNG production capacity with the Corpus Christi Stage 3 Liquefaction Project, enhancing its position in the global LNG market [6]

Company Performance - ConocoPhillips (COP) closed at $104.28, reflecting a -1.48% change from the previous day, underperforming the S&P 500 which gained 0.88% [1] - The stock has increased by 9.83% over the past month, while the Oils-Energy sector experienced a loss of 0.38% and the S&P 500 gained 1.17% [1] Upcoming Earnings Report - ConocoPhillips is set to release its earnings report on February 6, 2025, with analysts expecting earnings of $1.86 per share, indicating a year-over-year decline of 22.5% [2] - Revenue is anticipated to be $14.65 billion, reflecting a 4.27% decrease compared to the same quarter last year [2] Analyst Estimates - Recent changes to analyst estimates for ConocoPhillips suggest a favorable outlook on the company's business health and profitability [3] - The Zacks Consensus EPS estimate has decreased by 4.33% in the past month, and ConocoPhillips currently holds a Zacks Rank of 3 (Hold) [5] Valuation Metrics - ConocoPhillips has a Forward P/E ratio of 13.84, which is lower than the industry average Forward P/E of 16.57 [6] - The company has a PEG ratio of 0.88, significantly below the average PEG ratio of 3.24 for the Oil and Gas - Integrated - United States industry [7] Industry Context - The Oil and Gas - Integrated - United States industry is part of the Oils-Energy sector, holding a Zacks Industry Rank of 26, placing it in the top 11% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Company History - ConocoPhillips has evolved into one of the largest oil and gas producers globally, with its public history beginning in 1998 when it separated from DuPont in a historic IPO valued at nearly $4.4 billion [1] - The merger of Conoco and Phillips Petroleum in 2001 created ConocoPhillips, which became the sixth largest oil company at that time [2] Stock Performance - The company's share price has increased significantly since its IPO, leading to a 2-for-1 stock split in June 2005, meaning investors who bought one share at the IPO would own two shares post-split [2] - The only stock split in ConocoPhillips' history occurred in 2005, but a stock spinoff in May 2012 resulted in shareholders receiving one share of Phillips 66 for every two shares of ConocoPhillips owned [3] Investment Growth - An initial investment of one share at the IPO would now be worth over $325, comprising two shares of ConocoPhillips valued at $105 each and one share of Phillips 66 valued at $117 [4] - Investors have also benefited from dividend payments, currently amounting to $10.52 per share annually from the initial investment [4]

Group 1: Company Performance - ConocoPhillips (COP) stock closed at $105.48, reflecting a +0.57% change from the previous trading day, trailing the S&P 500's gain of 1.83% [1] - The stock has increased by 6.74% over the past month, outperforming the Oils-Energy sector's loss of 7.35% and the S&P 500's loss of 3.31% [1] Group 2: Upcoming Earnings - ConocoPhillips is set to release its earnings report on February 6, 2025, with an expected EPS of $1.91, indicating a 20.42% decline from the same quarter last year [2] - The consensus estimate for revenue is $14.65 billion, down 4.27% from the prior-year quarter [2] Group 3: Analyst Estimates and Rankings - Recent changes to analyst estimates for ConocoPhillips suggest a shifting business landscape, with positive revisions indicating optimism about the company's outlook [3] - The Zacks Rank system, which incorporates estimate changes, currently ranks ConocoPhillips at 3 (Hold), with a Zacks Consensus EPS estimate moving 6.08% lower over the past month [5] Group 4: Valuation Metrics - ConocoPhillips has a Forward P/E ratio of 13.54, which is below the industry average of 15.97 [5] - The company boasts a PEG ratio of 0.86, significantly lower than the average PEG ratio of 5.18 for the Oil and Gas - Integrated - United States industry [6] Group 5: Industry Context - The Oil and Gas - Integrated - United States industry holds a Zacks Industry Rank of 144, placing it in the bottom 43% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Market Overview - The S&P 500 is near a record high with expensive valuations, but energy stocks offer inexpensive valuations and high yields, making them attractive for value and passive-income investors [1] - ConocoPhillips, Kinder Morgan, and Phillips 66 have compelling valuations and yields over 3%, with a $1,000 investment in each expected to generate about $112 in passive income by 2025 [2] ConocoPhillips (COP) - ConocoPhillips has a highly efficient production portfolio, allowing it to break even at low oil and gas prices, with a free cash flow (FCF) breakeven in the low $40s per barrel of oil equivalent (boe) including dividends, and low $30s without dividends [3] - Despite mediocre oil prices in 2023, ConocoPhillips continued to generate strong earnings and FCF, with a P/E ratio of 12.1 and a price-to-FCF ratio of 12.9, making it a great value for investors [4] - ConocoPhillips is the largest U.S.-based independent exploration and production company by market cap, with production significantly increased due to organic investments and acquisitions of Concho Resources and Marathon Oil [12] - The company has a solid yield of 3.1% and expects its dividend growth rate to be in the top 25% of S&P 500 companies [13] Kinder Morgan (KMI) - Kinder Morgan's valuation is attractive despite concerns about the role of oil and gas in a cleaner energy future, with a P/E ratio of 24.4, a forward P/E of 22, and a price-to-FCF ratio of 15.7 [7] - The company is expected to benefit from rising industrial gas demand, onshore liquefied natural gas exports to Mexico, and demand from AI data centers, with several large projects coming online in the next few years [6] - Kinder Morgan operates in the midstream sector, connecting hydrocarbon production areas to processing, distribution, and consumption through pipelines, storage, and terminals [15] - The stock surged over 50% in 2024 due to years of underperformance, growing earnings, and a change in sentiment toward its long-term growth projects [14] Phillips 66 (PSX) - Phillips 66 operates in the downstream sector, refining crude oil into gasoline, petroleum products, and aviation fuel, with a focus on operational efficiency and cost management [16] - Despite a downturn in the refining industry, Phillips 66 remains profitable with a dividend of $4.60 per share and trailing-12-month earnings of $7.83 per share, with consensus estimates for $9.33 earnings per share in 2025 [10] - The company has a P/E ratio of 14.8, a forward P/E of 12.4, and a price-to-FCF of 16.9, with a 4% yield, making its dividend affordable [10] - A $1,000 investment in Phillips 66 is expected to generate $40 in passive income in 2025 [11]

Industry Overview - Crude oil prices remained stable in 2023, with Brent oil closing at approximately $77 per barrel, down 3%, and WTI ending at around $71 per barrel, unchanged from the start of the year [1] - Analysts predict that crude prices will continue to hover in the $70s range in 2025, indicating that oil stocks will need additional catalysts beyond oil price increases to drive share price growth [2] ConocoPhillips - ConocoPhillips completed a significant acquisition of Marathon Oil for $22.5 billion, which included assuming $5.4 billion in debt, enhancing its resource portfolio with over 2 billion barrels at an average supply cost below $30 per barrel [3] - The company initially projected $500 million in cost and capital synergies from the acquisition but has since revised this estimate to over $1 billion within the first year, which is expected to significantly boost free cash flow [4] - ConocoPhillips has increased its dividend by 34% and plans to return a substantial portion of its growing cash flow to shareholders, aiming for dividend growth in the top 25% of S&P 500 companies [5] - The company has raised its share repurchase program from $5 billion to $7 billion annually, with plans to retire all equity issued for the Marathon Oil acquisition within two to three years [6] Chevron - Chevron is in the process of acquiring Hess for $60 billion, a deal that would enhance its production and free cash flow growth outlook into the 2030s, potentially doubling its free cash flow by 2027 under a $70 oil scenario [7] - There is an ongoing arbitration regarding a change of control clause related to a joint development agreement with Exxon and CNOOC in Guyana, which could impact the acquisition [8] - If Chevron successfully navigates the arbitration, the acquisition will significantly strengthen its long-term growth profile, adding valuable resources in Bakken, Gulf of Mexico, and Southeast Asia [9][10] - Even in the event of a loss in arbitration, Chevron expects to grow its free cash flow by over 10% annually through 2027, supported by high-return capital investments [11] - Chevron has a long-standing history of increasing dividends annually for over three decades and plans to continue share repurchases within a $10 billion to $20 billion target range [12] Conclusion - Both ConocoPhillips and Chevron are positioned for significant growth in 2025 due to their recent acquisitions, making them standout investment opportunities in the oil sector [13]

Energy stocks delivered an underwhelming performance in 2024. For example, the Energy Select Sector SPDR Fund -- which holds the energy stocks listed in the S&P 500 -- delivered a meager 2% return last year, significantly underperforming the broader market index's 23% return. Oil prices, which initially rallied but ended the year right about where they started, kept a lid on oil stocks last year.While oil stocks performed poorly last year, they could bounce back in 2025. Devon Energy (DVN -0.53%), ConocoPhi ...

The latest trading session saw ConocoPhillips (COP) ending at $101.09, denoting a +1.01% adjustment from its last day's close. The stock's change was less than the S&P 500's daily gain of 1.26%. Elsewhere, the Dow gained 0.8%, while the tech-heavy Nasdaq added 1.77%.Heading into today, shares of the energy company had lost 4.17% over the past month, outpacing the Oils-Energy sector's loss of 5.1% and lagging the S&P 500's loss of 2.82% in that time.The investment community will be paying close attention to ...

Oil Market Overview - Crude oil prices in 2024 were volatile, with WTI closing at around $71 per barrel, nearly 20% below its April peak due to weakened demand from China and a global oversupply [1] - The oil market in 2025 is expected to remain volatile, balancing rising supply with tempered demand growth, with potential price stabilization from geopolitical developments and economic recovery [2] Supply Dynamics - US oil production reached a record 13.46 million barrels per day (bpd) in 2024, a 259,000 bpd increase from the previous year, with further growth projected to 13.52 million bpd in 2025 [3] - The growth rate of US production is moderating compared to the nearly 1 million bpd increase seen in 2023, with infrastructure constraints limiting further expansion [3] - The US remains a key driver of global supply growth alongside Brazil, Canada, and Norway [3] Demand Trends - China's oil demand is faltering due to economic slowdown and accelerated adoption of electric vehicles, with consumption expected to peak at 3.66 million bpd by 2025 [4] - Global oil demand growth is projected at a modest 1.1 million bpd in 2025, with emerging Asian economies partially offsetting China's decline [4] Geopolitical Risks - Geopolitical risks, including conflicts in Ukraine and the Middle East, have had limited impact on oil prices due to minimal supply disruptions [5] - OPEC+ extended production cuts through March 2025, and potential sanctions on Iran could tighten supply, but rising non-OPEC+ production may lead to a surplus of up to 1.4 million bpd by the end of 2025 [5] 2025 Market Outlook - Analysts forecast WTI crude to average just over $70 in 2025, with supply growth and Chinese demand uncertainties weighing on the market [6] - Economic recovery in the US and stimulus measures in China could create pockets of optimism, with the petrochemical sector driving future demand growth [6] Investment Strategy - Investors are advised to focus on resilient oil and energy companies like ExxonMobil, Diamondback Energy, and ConocoPhillips to navigate market volatility and capitalize on recovery opportunities [2][7] - These companies are well-positioned due to efficient operations and diversified portfolios, offering a hedge against fluctuating oil prices [7] Company Profiles - **ExxonMobil**: A fully integrated global oil and gas company with operations spanning production, refining, and marketing [8] - **Diamondback Energy**: An independent oil and gas exploration and production company focused on the Permian Basin, with over 490,000 net acres in key formations [9] - **ConocoPhillips**: A major global explorer and producer of oil and natural gas, headquartered in Houston, TX [10]

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...