Why This Texas-Based Company Could Be My Top Pick in the Energy Sector

Core Viewpoint - ConocoPhillips is positioned for significant growth in the energy sector, particularly due to its extensive operations in Texas and strategic acquisitions, making it a top pick among energy stocks [1]. Group 1: Company Operations - ConocoPhillips has developed a robust and diverse portfolio through acquisitions, including a $22.5 billion acquisition of Marathon, enhancing its resource base with supply costs below $40 per barrel [3]. - The company holds 792,000 net acres in the Delaware Basin, making it the largest Tier 1 inventory holder in that region, and ranks as the leading Tier 1 acreage holder in the Eagle Ford Shale with 484,000 net acres [4]. - In the Midland portion of the Permian, ConocoPhillips holds 265,000 net acres, ranking third among Tier 1 acreage holders, and has more top-tier inventory than any other producer in the lower 48 states, including Bakken acreage in North Dakota [4]. Group 2: Growth Drivers - The company anticipates capturing $1 billion in additional cost savings from the Marathon acquisition by the end of next year, which will support production and free cash flow growth [4]. - ConocoPhillips has a 30% interest in Phase 1 of the Port Arthur LNG project, a 13.5 million-ton-per-day liquefied natural gas export terminal expected to come online in 2027, allowing the company to access higher-priced global markets [5]. - The company is also investing in a new oil hub in Alaska, further diversifying its operations and growth potential [6].