ConocoPhillips(COP) - 2023 Q4 - Annual Report

Financial Overview - Total assets of ConocoPhillips as of December 31, 2023, were approximately $96 billion[7]. - Total company production for the year was 1,826 MBOED[7]. - ConocoPhillips employed approximately 9,900 people worldwide as of December 31, 2023[7]. - The company has $16.2 billion remaining in its $45 billion share repurchase program as of December 31, 2023[133]. Production and Reserves - Proved crude oil reserves increased to 3,032 million barrels in 2023, up from 2,975 million barrels in 2022[12]. - Proved natural gas reserves decreased to 1,408 million cubic feet in 2023, down from 1,461 million cubic feet in 2022[12]. - Total proved reserves across all categories reached 6,758 million barrels of oil equivalent in 2023[12]. - In 2023, the Lower 48 segment contributed 64% of consolidated liquids production and 76% of consolidated natural gas production[20]. - Average daily net production in the Lower 48 was 569 MBD, with the Delaware Basin contributing 274 MBD[21]. - The Asia Pacific segment contributed 5% of the company's consolidated liquids production and 3% of consolidated natural gas production in 2023, with 844 MMCFD of natural gas production from the Australia Pacific LNG[46]. Operational Highlights - Alaska operations contributed 15% of consolidated liquids production and 2% of consolidated natural gas production[13]. - Average daily net production in Alaska was 195 MBOED, with 173 MBD of crude oil and 38 MMCFD of natural gas[14]. - The company operates in 13 countries, with a diverse portfolio including unconventional plays in North America and conventional assets globally[7]. - The Surmont oil sands development in Canada achieved first production on Pad 267 in December 2023, with expectations for Pad 104 in 2025[29]. - The Greater Ekofisk Area in Norway achieved first production from the Tommeliten A development in 2023, with Eldfisk North expected to start production in 2024[33]. Environmental and Regulatory Considerations - The company aims for a 50-60% reduction in GHG emissions intensity by 2030 from a 2016 baseline, with a near-zero methane intensity target of less than 1.5 kg CO2 equivalent per BOE by 2030[67]. - The company anticipates that increasing attention to climate change may lead to higher costs of capital and potential litigation risks[118]. - Compliance with environmental regulations is expected to incur substantial capital and operating costs, affecting financial performance[110]. - New regulations, such as those from the EPA regarding methane emissions, may lead to increased capital expenditures and operational costs[114]. Workforce and Diversity - The company has a global workforce composition of 73% male and 27% female, with 68% of U.S. employees identifying as White and 32% as people of color (POC)[79]. - In 2023, the total voluntary attrition rate for ConocoPhillips was 4%[82]. - ConocoPhillips is focused on enhancing its diversity, equity, and inclusion (DEI) efforts, with 41% of diversity hiring targeting U.S. POC[82]. Cybersecurity Measures - The company has implemented a multilayered approach to cybersecurity risk management, integrating administrative, technical, and physical controls to protect its IT and operational technology (OT) systems[142]. - The Chief Information Security Officer (CISO) leads the cybersecurity strategy and has over 20 years of experience, with 15 years specifically in cybersecurity[150]. - A Cybersecurity Operation Center (CSOC) is in place to monitor threats and coordinate incident response, ensuring timely management of cybersecurity incidents[144]. - The company conducts annual risk assessments to evaluate cybersecurity risks, which are discussed with the Executive Leadership Team and the Board of Directors[143]. Market and Economic Factors - In 2023, WTI crude oil prices fluctuated between a low of $67 per barrel in March and a high of $94 per barrel in August, indicating significant volatility in commodity prices[93]. - Prolonged periods of low commodity prices could adversely affect revenues, operating income, cash flows, and liquidity, potentially impacting dividend declarations and share repurchase programs[94]. - The exploration and production sector is highly competitive, with challenges from both traditional and alternative energy sources[97]. - The company faces risks associated with geopolitical conditions and regulatory changes in international markets, which could adversely affect profitability and cash flows[124].