ConocoPhillips(COP) - 2022 Q4 - Annual Report

Production and Reserves - Total company production for 2022 was 1,738 MBOED[5] - Net proved reserves at December 31, 2022, totaled 6,599 million barrels of oil equivalent (BOE)[10] - Crude oil production in Alaska averaged 177 MBD, contributing 16% of consolidated liquids production[11] - Natural gas production in Alaska averaged 34 MMCFD, contributing 2% of consolidated natural gas production[11] - Total natural gas reserves amounted to 2,420 million cubic feet (MCF) from consolidated operations[10] - Total natural gas liquids reserves were 895 million barrels from consolidated operations[10] - The Lower 48 segment contributed 64% of the company's consolidated liquids production and 72% of consolidated natural gas production in 2022[18] - Average production in the Delaware Basin increased to 498 MBOED in 2022 from 286 MBOED in 2021, with 186 operated wells drilled[19] - In the Eagle Ford, average production rose to 220 MBOED in 2022 compared to 211 MBOED in 2021, with 125 operated wells drilled[19] - The Midland Basin saw an increase in average production to 155 MBOED in 2022 from 136 MBOED in 2021, with 99 operated wells drilled[19] - The Bakken's average production increased to 95 MBOED in 2022 from 94 MBOED in 2021, with 33 operated wells drilled[19] - In Canada, operations contributed 6% of consolidated liquids production and 3% of consolidated natural gas production in 2022[20] - The company’s operations are subject to extensive governmental regulations, which may impose price controls and limitations on production[98] Financial Performance and Assets - Total assets as of December 31, 2022, were approximately $94 billion[5] - The company employed approximately 9,500 people worldwide as of December 31, 2022[5] - The company initiated a three-tier capital return program in December 2021, consisting of ordinary dividends, share repurchases, and variable return of cash (VROC)[128] - As of December 31, 2022, the company had $21.6 billion remaining of the $45 billion share repurchase program authorized by the Board of Directors[131] - The company expects to incur substantial capital expenditures and operating costs due to compliance with existing and future environmental laws and regulations[107] - The company relies on cash generated from operations and access to capital markets, with uncertainty regarding future financing availability[124] Environmental and Regulatory Commitments - The company aims to reduce GHG emissions intensity by 40-50% from a 2016 baseline by 2030, applying this target on both a gross operated and net equity basis[56] - The company is contractually committed to deliver approximately 578 billion cubic feet of natural gas, 345 million barrels of crude oil, and 12.9 million megawatt hours of electricity through various contracts expiring by 2030[58] - The company is the second-largest LNG liquefaction technology provider globally, with its technology licensed for use in 28 LNG trains[55] - The company has established a Low-Carbon Technologies organization to support its net-zero ambition and prioritize future competitive investments[55] - The company aims to achieve net-zero operational emissions by 2050 and published its Plan for the Net-Zero Energy Transition in 2022, setting ambitious targets around emissions and flaring[94] - The U.S. enacted the Inflation Reduction Act of 2022, which includes a charge on methane emissions, potentially leading to increased capital expenditures and compliance costs[114] - Legal and regulatory risks associated with environmental laws are expected to continue to increase in complexity and number, impacting operations[108] Exploration and Development Projects - The company plans to drill the Bear-1 exploration well in early 2023 to test the Brookian topset play, located 30 miles south of the Kuparuk River Unit[15] - The Greater Ekofisk Area in Norway is expected to see first production from two development projects in 2024, following a 20-year extension on production licenses until 2048[26] - The QG3 project in Qatar produced an average daily net production of 13 MBD of crude oil, 8 MBD of NGL, and 374 MMCFD of natural gas, contributing a total of 83 MBOED in 2022[31] - In 2022, the Waha Concession in Libya had an average daily net production of 36 MBD of crude oil and 22 MMCFD of natural gas, totaling 40 MBOED[33] - The company holds a 30% working interest in the Kebabangan Cluster, which has faced production reductions since January 2020 due to a third-party pipeline rupture[45] - The company has a 29.5% working interest in the Gumusut Field, with Phase 3 first oil achieved in 2022 and Phase 4 development drilling planned to commence in early 2024[43] Workforce and Diversity - The company’s workforce demographics show 73% male and 27% female globally, with 30% of U.S. employees identifying as people of color (POC)[71] - In 2022, the company achieved a total voluntary attrition rate of 6% and a diversity hiring rate of 41% for U.S. POC[76] Market Risks and Economic Factors - Low commodity prices could adversely affect revenues, operating income, cash flows, and liquidity, potentially impacting dividends and share repurchase programs[89] - The exploration and production of oil and gas is highly competitive, with the company facing competition from various entities in securing new sources of supply[92] - The COVID-19 pandemic has negatively impacted the global economy, disrupting supply chains and reducing demand for oil and gas, leading to market volatility[104] - The business was adversely impacted by the COVID-19 pandemic, with potential future impacts including reduced demand and supply chain disruptions[105] - Approximately 32% of hydrocarbon production and proved reserves were derived from outside the U.S. in 2022, exposing the company to international market risks[122] Cybersecurity and Operational Risks - Cybersecurity threats are a significant concern for the company, potentially affecting operations and data security, with ongoing investments in protective measures[134][137] - The company acknowledges that any cybersecurity incidents could lead to operational disruptions, reputational damage, and increased compliance costs[138] - The company has business continuity plans in place, but there is no assurance they will completely avoid disruptions[139] - Significant hazards and risks, including operational hazards and environmental risks, require continuous oversight to mitigate potential impacts on operations[102]