The FINANCIAL — ConocoPhillips announced its 2019 capital expenditure budget and operating plan. The operating plan reflects the company’s ongoing commitment to free cash flow generation, differentiated payout to shareholders and superior financial returns through business cycles.
The 2019 operating plan is expected to continue driving underlying improvement in return on capital employed. Key highlights are:
Planned 2019 capital expenditures of $6.1 billion result in free cash flow at prices above $40 per barrel WTI;
Increased target payout to shareholders to greater than 30 percent of cash from operations from 20-30 percent;
Expected share repurchases of $3 billion in 2019, representing a payout to shareholders, including dividends, of approximately 50 percent of cash from operations at $50 WTI;
Expected 2019 production of 1,300 MBOED to 1,350 MBOED, excluding Libya and assuming the previously announced Clair and Kuparuk transactions will close by year-end 2018;
At midpoint, this represents year-over-year growth of 8 percent per debt-adjusted share;
Cash flow sensitivities increased by about $30 million per dollar change in oil price;
The 2019 operating plan includes activity targeting several high-impact opportunities, notably:
Appraisal drilling of the Willow discovery in Alaska;
Continued multi-well pad appraisal drilling in the emerging liquids-rich Montney in Canada;
Multi-well pilot tests of new completion designs in Eagle Ford and Delaware;
Exploration drilling in the Louisiana Austin Chalk;
New major projects in Alaska, Europe and Asia Pacific; and
Expected year-end 2018 resource base of 16 billion BOE at less than $40 per barrel WTI cost of supply.
