Production and Financial Performance - In Q1 2025, ConocoPhillips reported production of 2,389 MBOED, an increase of 487 MBOED or 26% compared to Q1 2024[154]. - The company generated $6.1 billion in cash provided by operating activities in Q1 2025, returning $2.5 billion to shareholders through share repurchases and dividends[138]. - Total revenues for the first three months of 2025 were $10.238 billion, with a net income of $2.849 billion[221]. - Net income for the first quarter of 2025 was $2,849 million, an increase of 11.7% from $2,551 million in the first quarter of 2024[163]. - Cash provided by operating activities increased to $6.1 billion in Q1 2025 from $5.0 billion in Q1 2024, primarily due to higher sales volumes from the acquisition of Marathon Oil assets[198]. Capital Expenditures and Investments - Full-year capital expenditure guidance was lowered to $12.3 to $12.6 billion from approximately $12.9 billion[149]. - Capital expenditures and investments for Q1 2025 totaled $3.378 billion, with full-year guidance set between $12.3 billion and $12.6 billion[217][218]. - Capital expenditures in Alaska were $1.046 billion in Q1 2025, up from $720 million in Q1 2024[217]. Asset Sales and Acquisitions - ConocoPhillips completed $1.3 billion in noncore asset sales in the Lower 48 segment, contributing to a target of $2 billion in disposition proceeds[134]. - The company recognized proceeds from asset dispositions of $0.6 billion in Q1 2025, with total proceeds from subsequent dispositions reaching approximately $1.3 billion[204]. - The company expects to capture over $1 billion in synergies from the acquisition of Marathon Oil within the first full year post-transaction[133]. Segment Performance - The Lower 48 segment reported net income of $1,790 million, up 29.7% from $1,381 million in the same period last year[171]. - Alaska's net income decreased to $327 million in Q1 2025 from $346 million in Q1 2024, reflecting lower realized prices[166]. - Canada segment's net income increased to $256 million in Q1 2025, compared to $180 million in Q1 2024, driven by higher volumes[177]. - Europe, Middle East and North Africa reported net income of $419 million, up from $304 million in Q1 2024, attributed to higher volumes and prices[181]. - Asia Pacific's net income fell to $311 million in Q1 2025 from $512 million in Q1 2024, impacted by lower realized prices and exploration expenses[185]. Pricing and Market Conditions - Average realized prices for crude oil decreased to $71.65 per barrel in Q1 2025, down 9% from $78.64 per barrel in Q1 2024[152]. - Brent crude oil prices averaged $75.66 per barrel in Q1 2025, a decrease of 9% compared to $83.24 per barrel in Q1 2024[144]. - U.S. Henry Hub natural gas prices averaged $3.65 per MMBTU in Q1 2025, an increase of 62% from $2.25 per MMBTU in Q1 2024[145]. - Total average realized price for the company was $53.34 per BOE in Q1 2025, down from $56.60 per BOE in Q1 2024[147]. Shareholder Returns - The company declared a second-quarter ordinary dividend of $0.78 per share[135]. - The company paid ordinary dividends of $0.78 per share in Q1 2025, compared to $0.58 per share in Q1 2024[214]. - The company repurchased 15.1 million shares for $1.5 billion in Q1 2025, bringing total repurchases since the program's inception to $35.8 billion[215]. Debt and Liquidity - Total liquidity as of March 31, 2025, was $12.7 billion, including cash and cash equivalents of $6.3 billion and available borrowing capacity of $5.5 billion[197]. - The total debt decreased to $23.784 billion as of March 31, 2025, from $24.324 billion at the end of 2024[208]. Environmental and Climate Strategy - As of March 31, 2025, the company has accrued environmental costs totaling $210 million, an increase from $206 million at December 31, 2024[227]. - The company is identified as a potentially responsible party under CERCLA at 16 sites across the U.S.[227]. - The company expects to incur substantial environmental expenditures over the next 30 years[227]. - The Climate Risk Strategy aims to manage climate-related risks and optimize opportunities, focusing on emissions reduction and technology development[230]. - The company is progressing towards its Scope 1 and Scope 2 emissions intensity targets as part of its accountability measures[231]. Risks and Challenges - The company faces risks from volatile commodity prices, which could adversely affect operating results and strategy execution[233]. - Potential disruptions to operations may arise from extraordinary weather events, supply chain issues, and geopolitical factors[234]. - Market risks for the three months ended March 31, 2025, remain consistent with previous disclosures in the 2024 Annual Report[235].

Financial Data and Key Metrics Changes - The company generated $2.9 per share in adjusted earnings for the first quarter of 2025, with cash flow from operations (CFO) amounting to $5.5 billion, including $200 million from APLNG distributions [16][20] - Capital expenditures were reported at $3.4 billion, with a return of capital totaling $2.5 billion to shareholders, which represents 45% of CFO for the quarter [16][17] - The company ended the quarter with $7.5 billion in cash and short-term investments, plus $1 billion in long-term liquid investments [17] Business Line Data and Key Metrics Changes - Total production for the first quarter was 2,389,000 barrels of oil equivalent per day, exceeding production guidance [15] - In the Lower 48, production averaged 1,462,000 barrels of oil equivalent per day, with specific contributions from the Permian (816,000), Eagle Ford (370,000), and Bakken (212,000) [15] Market Data and Key Metrics Changes - The macro environment is characterized by uncertainty and volatility, with revised outlooks for global economic growth and oil demand [8] - Oil prices have softened compared to the first quarter, influenced by OPEC plus unwinding voluntary cuts quicker than expected [9] Company Strategy and Development Direction - The company is focused on maintaining a disciplined capital allocation framework and is executing well on the integration of Marathon Oil, which is ahead of schedule [10][11] - The company aims to deliver low single-digit production growth while reducing capital spending by approximately $500 million for the full year [19][20] - The long-term value proposition is centered on a deep, durable, and diverse portfolio with decades of low-cost supply inventory [12][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current macro uncertainties but emphasizes a long-term focus on free cash flow growth, particularly from high-quality investments in Alaska and LNG [12][13] - The company is prepared to manage through challenging environments, with flexibility in its capital program if conditions warrant [11][12] Other Important Information - Bill Bullock announced his retirement after 39 years with the company, with Andy O'Brien set to take over as CFO [13][14] - The company has identified $1 billion in synergy captures from the Marathon integration, with ongoing efficiency improvements [72][73] Q&A Session Summary Question: Return of capital and cash flow outlook - Analyst inquired about the $10 billion capital return target amidst a softer commodity macro environment and the potential for debt to support share buybacks [24] - Management reiterated the commitment to a 45% return of capital based on cash flow from operations, with flexibility to use cash on the balance sheet if necessary [26][27] Question: Capital budget reduction details - Analyst asked for details on the drivers behind the capital budget reduction and the flexibility in the program [29] - Management explained that the reduction is due to capital efficiency improvements and plan optimization, with no material changes to production guidance [31][32] Question: Cost structure and improvement opportunities - Analyst sought insights on the current cost structure and opportunities for further improvement [36] - Management emphasized a continuous focus on cost efficiency and benchmarking against peers to maintain competitive advantage [37] Question: Balancing low-cost supply with macro conditions - Analyst questioned how the company balances low-cost supply with macro conditions while preserving inventory [40] - Management highlighted the importance of low-cost supply and the focus on maximizing returns on capital investments [41][42] Question: Breakeven clarification - Analyst asked about the impact of the capital reduction on breakeven costs [48] - Management clarified that the free cash flow breakeven is in the mid-40s, with expectations for it to decrease as capital is reduced [51][52] Question: Long cycle projects and capital allocation - Analyst inquired about the trend of capital allocation to long cycle projects [93] - Management indicated that capital is expected to ramp down as projects come online, with continued investment in base businesses [94] Question: Cash taxes and outlook - Analyst asked about the higher cash taxes in the first quarter and the outlook for the remainder of the year [97] - Management explained that the increase was due to a shift in income mix and discrete deferred tax items, with expectations for the effective tax rate to be in the high thirties [100][101]

Financial Data and Key Metrics Changes - The company generated $2.9 per share in adjusted earnings for the first quarter of 2025, with cash flow from operations (CFO) amounting to $5.5 billion, including $200 million from APLNG distributions [14][15] - Capital expenditures were reported at $3.4 billion, with a return of capital to shareholders totaling $2.5 billion, which represents 45% of CFO for the quarter [14][15] - The company ended the quarter with $7.5 billion in cash and short-term investments, plus $1 billion in long-term liquid investments [15] Business Line Data and Key Metrics Changes - Total production for the first quarter was 2,389,000 barrels of oil equivalent per day, exceeding production guidance [13] - In the Lower 48, production averaged 1,462,000 barrels of oil equivalent per day, with specific contributions from the Permian (816,000), Eagle Ford (370,000), and Bakken (212,000) [13] Market Data and Key Metrics Changes - The company noted a softer oil price environment compared to the first quarter, with OPEC plus unwinding voluntary cuts quicker than expected [5][6] - The outlook for global economic growth and oil demand has been revised lower, contributing to the current volatility in the market [5] Company Strategy and Development Direction - The company is focused on maintaining a disciplined capital allocation framework and has reduced capital spending by $500 million while keeping production guidance unchanged [8][11] - The integration of Marathon Oil is progressing ahead of schedule, with the company finding additional opportunities to enhance capital efficiency and reduce costs [8][11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current macro uncertainties but emphasized the company's strong long-term value proposition and competitive advantages [6][10] - The company is committed to returning a significant portion of cash flow to shareholders, maintaining a long-term track record of distributing 45% of annual CFO [9][10] Other Important Information - Bill Bullock, the CFO, announced his retirement after 39 years, with Andy O'Brien set to take over the role [11][12] - The company expects to see a modest use of cash on a full-year basis, with an operating working capital outflow of $800 million anticipated in the second quarter [18] Q&A Session Summary Question: Return of capital and cash flow outlook - The company is tracking towards a $10 billion return of capital for the year, despite a softer commodity macro environment [21] - Management indicated a willingness to use cash on the balance sheet if necessary to support share buybacks [22][24] Question: Capital budget reduction details - The capital budget reduction is largely driven by efficiency improvements and does not impact production guidance [27][30] - Management emphasized a measured approach to capital allocation, focusing on maximizing returns [31] Question: Cost structure and improvement opportunities - The company is continuously benchmarking operations and seeking efficiencies to maintain competitive advantage [35][36] Question: Balancing low-cost supply with macro conditions - The company remains focused on low-cost supply and is not looking to time the market with capital investments [42][45] Question: Breakeven clarification - The capital reduction will lower the breakeven point, with the current free cash flow breakeven in the mid-40s [51][52] Question: Long cycle projects and capital allocation - The company is committed to its long cycle projects and will not slow down investments in key areas like Willow and LNG [80] Question: Non-core asset sales and portfolio optimization - The company is always optimizing its portfolio and may consider non-core asset sales if cost of supply rises [105][106]

Economic Indicators - Initial Jobless Claims were reported at 228K, slightly below the estimated 230K, marking a decrease of 13K from the previous week's revised figure of 241K, indicating stability in the labor market [2] - Continuing Claims reached 1.879 million, consistent with trends over the past six months, although the previous week reported 1.916 million, the first print above 1.9 million since November 2021 [3][4] - Q1 U.S. Productivity showed a negative growth of -0.8%, which was 10 basis points lower than expected, following a +1.5% in Q4 2024, marking the first negative print since Q2 2022 [5] - Unit Labor Costs increased by 5.7%, exceeding the expected 5.1%, the highest level since Q3 2020, indicating potential economic challenges [6] Company Earnings - Shopify (SHOP) reported Q1 earnings of 25 cents per share, missing consensus by a penny, while revenues of $2.36 billion exceeded expectations by 1.32%, but shares fell by 7% [7] - ConocoPhillips (COP) surpassed earnings estimates with $2.09 per share, exceeding consensus by 3 cents, and reported revenues of $17.1 billion, outperforming by 3.37% compared to the previous year [8] - Crocs (CROX) reported earnings of $3.00 per share, beating expectations by 19.5%, and revenues of $937.3 million, slightly below year-ago levels, with shares up 4.7% in pre-market trading [9]

Market Overview - Pre-market futures indicate a positive market sentiment with the Dow up 300 points, S&P 500 up 50 points, Nasdaq up 250 points, and Russell 2000 up 25 points, despite less favorable economic reports [1] Employment Data - Initial Jobless Claims were reported at 228K, slightly below the estimated 230K, marking a decrease of 13K from the previous week's revised figure of 241K, indicating stability in the labor market [2] - Continuing Claims reached 1.879 million, consistent with trends over the past six months, although the previous week reported 1.916 million, the first print above 1.9 million since November 2021 [3][4] Productivity and Labor Costs - Q1 U.S. Productivity showed a negative growth of -0.8%, which is 10 basis points lower than expectations, following a +1.5% growth in Q4 2024, marking the first negative print since Q2 2022 [5] - Unit Labor Costs increased by 5.7%, exceeding the expected 5.1%, the highest level since Q3 2020, indicating potential challenges for economic growth [6] Company Earnings Reports - Shopify (SHOP) reported Q1 earnings of $0.25 per share, missing consensus by a penny, while revenues of $2.36 billion exceeded expectations by 1.32%, but shares fell by 7% [7] - ConocoPhillips (COP) surpassed earnings estimates with $2.09 per share and revenues of $17.1 billion, outperforming the previous year's $14.48 billion, leading to a 1.6% increase in shares [8] - Crocs (CROX) reported earnings of $3.00 per share, exceeding expectations by 19.5%, with revenues of $937.3 million slightly below year-ago levels, resulting in a 4.7% increase in shares [9]

Group 1: Financial Performance - ConocoPhillips reported $17.1 billion in revenue for the quarter ended March 2025, an 18.1% year-over-year increase [1] - The EPS for the same period was $2.09, compared to $2.03 a year ago, indicating a positive trend [1] - The reported revenue exceeded the Zacks Consensus Estimate of $16.54 billion by 3.37% [1] Group 2: Key Metrics - Natural gas liquids produced per day totaled 402 million barrels, surpassing the average estimate of 394.51 million barrels [4] - Total production per day was 2,389 million barrels of oil equivalent, compared to the average estimate of 2,363.2 million barrels [4] - Average sales price for natural gas was $5.62, higher than the estimated $5.28 [4] Group 3: Market Performance - Shares of ConocoPhillips returned -4.2% over the past month, while the Zacks S&P 500 composite increased by 11.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Insights - ConocoPhillips reported first-quarter 2025 adjusted earnings per share of $2.09, exceeding the Zacks Consensus Estimate of $2.06 and up from $2.03 in the prior year [1] - Quarterly revenues reached $17.1 billion, an increase from $14.48 billion year-over-year, and also surpassed the Zacks Consensus Estimate of $16.54 billion [1] Production - Total production averaged 2,389 thousand barrels of oil equivalent per day (MBoe/d), up from 1,902 MBoe/d in the same quarter last year, and exceeded the estimate of 2,340 MBoe/d [3] - Crude oil production rose to 1,166 thousand barrels per day (MBbls/d) from 944 MBbls/d year-over-year, also above the estimate of 1,119 MBbls/d [4] - Natural gas production increased to 4,070 million cubic feet per day (MMcf/d) from 3,302 MMcf/d in the prior year [4] Realized Prices - The average realized oil equivalent price decreased to $53.34 per barrel from $56.60 a year ago [5] - The average realized crude oil price was $71.65 per barrel, down from $78.64 year-over-year [5] - The average realized natural gas price increased to $5.62 per thousand cubic feet from $5.02 in the prior year [6] Expenses - Total expenses rose to $12.6 billion from $10.7 billion in the same period of 2024, but were below the projection of $12.8 billion [7] - The cost of purchased commodities increased to $6.2 billion from $5.3 billion year-over-year [7] Balance Sheet & Capital Spending - As of March 31, 2025, ConocoPhillips had $6.3 billion in cash and cash equivalents, with total long-term debt of $23.2 billion and short-term debt of $608 million [8] - Capital expenditure and investments totaled $3.38 billion, with net cash provided by operating activities at $6.1 billion [8] Guidance - For Q2 2025, production is expected to be in the range of 2.34-2.38 MBoe/d, with full-year production guidance unchanged at 2.34-2.38 MBoe/d [10] - Full-year capital expenditure guidance has been lowered to $12.3-$12.6 billion from approximately $12.9 billion [10]

Core Viewpoint - ConocoPhillips has reduced its spending forecast by 3.5% to $12.45 billion due to falling oil prices, which have dropped below $60 per barrel, while maintaining its production outlook [1] Group 1: Company Actions - ConocoPhillips announced a 3.5% reduction in its spending forecast, bringing it down to $12.45 billion based on the midpoint of its guidance range [1] - The company has kept its production expectations unchanged despite the spending cuts [1] Group 2: Market Context - WTI crude oil prices have decreased by approximately 18% this year and are currently below $60 per barrel [1] - A survey conducted by the Dallas Federal Reserve indicated that U.S. oil executives believe an average oil price of $65 is necessary for profitability [1] Group 3: Management Commentary - CEO Ryan Lance expressed confidence in the company's differentiated portfolio, strong balance sheet, and disciplined capital allocation framework, which prioritize shareholder returns [1]

Core Viewpoint - ConocoPhillips reported quarterly earnings of $2.09 per share, exceeding the Zacks Consensus Estimate of $2.06 per share, and showing an increase from $2.03 per share a year ago, indicating a positive earnings surprise of 1.46% [1] Financial Performance - The company achieved revenues of $17.1 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.37%, and reflecting a year-over-year increase from $14.48 billion [2] - Over the last four quarters, ConocoPhillips has exceeded consensus EPS estimates three times and topped revenue estimates twice [2] Stock Performance and Outlook - ConocoPhillips shares have declined approximately 11.6% since the beginning of the year, compared to a 4.3% decline in the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $1.57 on revenues of $15.23 billion, and for the current fiscal year, it is $6.63 on revenues of $62.73 billion [7] Industry Context - The Oil and Gas - Integrated - United States industry is currently ranked in the top 34% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Financial Performance - ConocoPhillips reported adjusted earnings of $2.7 billion, or $2.09 adjusted EPS for 1Q25[6, 10] - The company generated $5.5 billion in CFO and $2.1 billion in FCF, with an ending cash balance of $7.5 billion[6] - $2.5 billion was distributed to shareholders through $1.5 billion in share repurchases and $1.0 billion in ordinary dividends[6] Operational Highlights - Total company production was 2,389 MBOED, with Lower 48 production at 1,462 MBOED[8] - Completed $1.3 billion in noncore Lower 48 asset sales[6] Segment Performance - Lower 48 adjusted earnings were $1.697 billion in 1Q25[12] - Alaska adjusted earnings were $269 million in 1Q25[12] - Canada adjusted earnings were $256 million in 1Q25[12] Guidance - Full-year production guidance remains unchanged at 2.34 – 2.38 MMBOED[6, 24] - Full-year adjusted operating costs are guided to be $10.7B - $10.9B[24] - Full-year capital expenditures are expected to be $12.3B - $12.6B[24]