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ConocoPhillips(COP) - 2024 Q4 - Annual Report
COPConocoPhillips(COP)2025-02-18 19:48
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Production and Reserves - Total company production for 2024 was 1,987 MBOED, with total assets of approximately 123billion[10].−NetprovedreservesatDecember31,2024,totaled7,812millionbarrelsofoilequivalent,anincreasefrom6,758millionin2023[17].−Totalcrudeoilreservesincreasedto3,514millionbarrelsin2024,upfrom3,121millionin2023[17].−Totalnaturalgasreservesroseto2,606millionbarrelsofoilequivalentin2024,comparedto2,287millionin2023[17].−Thetotalconsolidatedoperationsprovedreservesincreasedby16123 billion[10]. - Net proved reserves at December 31, 2024, totaled 7,812 million barrels of oil equivalent, an increase from 6,758 million in 2023[17]. - Total crude oil reserves increased to 3,514 million barrels in 2024, up from 3,121 million in 2023[17]. - Total natural gas reserves rose to 2,606 million barrels of oil equivalent in 2024, compared to 2,287 million in 2023[17]. - The total consolidated operations proved reserves increased by 16% from 2023 to 2024, reflecting successful exploration and acquisition strategies[17]. Acquisitions and Operational Footprint - The acquisition of Marathon Oil Corporation was completed on November 22, 2024, enhancing the company's operational footprint in the Lower 48[12]. - The acquisition of Marathon Oil on November 22, 2024, enhanced the company's position in the Delaware, Eagle Ford, and Bakken basins, adding low-cost supply and complementary acreage[32]. - The acquisition of Marathon Oil may present integration challenges that could delay or prevent the realization of expected benefits and synergies[152]. Regional Production Contributions - The Lower 48 segment contributed 63% of consolidated liquids production and 74% of consolidated natural gas production in 2024[31]. - Alaska operations accounted for 14% of consolidated liquids production and 2% of consolidated natural gas production[20]. - Canadian operations contributed 10% of consolidated liquids production and 5% of consolidated natural gas production in 2024[39]. - In Norway, average daily net production was 128 MBOED, with crude oil at 69 MBD and natural gas at 329 MMCFD[45]. - The Asia Pacific segment contributed 4% of consolidated liquids production and 2% of consolidated natural gas production[66]. Project Developments - The Greater Kuparuk Area's Nuna project achieved first oil in Q4 2024, with further development planned for the Coyote reservoir[24]. - First oil from the Willow project is anticipated in 2029, with construction activities ongoing in 2024[27]. - The Gumusut Phase 4 development completed drilling in 2024, with first oil anticipated in early 2025[77]. - The Surmont asset focuses on lowering costs, reducing GHG intensity, and optimizing performance[41]. Production Statistics - Average daily net production in the Lower 48 regions totaled 1,152 MBOED, with crude oil at 602 MBD, NGL at 279 MBD, and natural gas at 1,625 MMCFD[32]. - Total average daily net production in Canada for 2024 was 164 MBOED, consisting of 17 MBD of crude oil, 6 MBD of NGL, 115 MMCFD of natural gas, and 122 MBD of bitumen[40]. - The company holds approximately 792,000 net acres in the Delaware Basin, 484,000 net acres in the Eagle Ford, and 265,000 net acres in the Midland Basin[33][34][35]. Financial Performance and Capital Management - As of December 31, 2024, the company had 30.7 billion of share repurchase authority remaining, with a total authorization of up to 65billion[161].−ThecompanypaidaquarterlyVariableReturnofCapital(VROC)toshareholdersinthefirstthreequartersof2024,withanordinarydividenddeclaredinthefourthquarter[160].−Thecompanymayfacedifficultiesinobtainingadditionalcapitalinthefuture,whichcouldadverselyaffectoperations[157].EnvironmentalandRegulatoryChallenges−ThecompanyaimstoreduceoperationalGHGemissionsintensitybutfacesrisksrelatedtogovernmentpolicies,marketdevelopment,andtechnologyeffectiveness[127].−TheEPA′snewregulationsonmethaneemissionscouldleadtoincreasedcapitalexpendituresandcompliancecostsforthecompany[141].−NewlegislationinNewYorkandVermontmayholdenergycompaniesfinanciallyresponsibleforclimatechangemitigation,potentiallyexposingthecompanytosignificantliabilities[140].−TheinternationalcommitmenttotheParisAgreementmayimposeadditionalcostsandoperationalchallengesrelatedtoGHGemissionsandclimatechange[142].WorkforceandEmployment−Atyear−end2024,ConocoPhillipshadapproximately11,800employeesacross14countries,with6765 billion[161]. - The company paid a quarterly Variable Return of Capital (VROC) to shareholders in the first three quarters of 2024, with an ordinary dividend declared in the fourth quarter[160]. - The company may face difficulties in obtaining additional capital in the future, which could adversely affect operations[157]. Environmental and Regulatory Challenges - The company aims to reduce operational GHG emissions intensity but faces risks related to government policies, market development, and technology effectiveness[127]. - The EPA's new regulations on methane emissions could lead to increased capital expenditures and compliance costs for the company[141]. - New legislation in New York and Vermont may hold energy companies financially responsible for climate change mitigation, potentially exposing the company to significant liabilities[140]. - The international commitment to the Paris Agreement may impose additional costs and operational challenges related to GHG emissions and climate change[142]. Workforce and Employment - At year-end 2024, ConocoPhillips had approximately 11,800 employees across 14 countries, with 67% based in the U.S.[103]. - The company's global workforce demographics show 73% male and 27% female representation, with 33% identifying as people of color in the U.S.[104]. - The total voluntary attrition rate for ConocoPhillips was 4% in 2024, with a U.S. university hire acceptance rate of 75%[110]. Market and Economic Conditions - WTI crude oil prices fluctuated between a high of 87 per barrel in April and a low of $66 per barrel in September 2024, indicating significant price volatility[121]. - Prolonged periods of low commodity prices could adversely affect revenues, operating income, cash flows, and liquidity, impacting dividend declarations and share repurchase programs[122]. - Cybersecurity threats pose significant risks to the company's operations, potentially leading to financial impacts and reputational damage[164]. Strategic Initiatives - ConocoPhillips established a Low Carbon Technologies organization in early 2021 to support emissions reduction objectives and evaluate investment opportunities in alternative energy[129]. - The Low Carbon Technologies organization focuses on emissions reduction initiatives and has conducted CCS and electrification studies since 2021[96]. - ConocoPhillips evaluated carbon dioxide storage sites along the U.S. Gulf Coast and drilled two appraisal wells as part of its carbon management strategy[100].