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$5 Billion Returns for ConocoPhillips’ Shareholders as Prices Grow
09/20/2022
Shareholder’s payout target was increased by 50% after the largest U.S. independent oil producer surpass Wall Street’s earnings estimates on growing energy prices, said Houston-based ConocoPhillips Co. on Aug. 4.
Due to Western sanctions on major producer Russia throttling energy supply amid a rebound in demand from pandemic lows, oil and gas prices have soared. Crude has been trading more than 25% higher since the start of the year and results also benefited from high natural gas prices.
Meanwhile, shares were down a fraction, to $91.03, in early trading but are up about 26% year to date.
Its production outlook for the year was reduced by approximately 1% on disruptions to output in Libya, and ConocoPhillips said while inflation was growing its costs, the year’s capital budget would rest at around $7.8 billion.
ConocoPhillips stated, that the average price obtained for a barrel of oil and gas accelerated 77% from a year earlier to $88.57. The company acknowledges that it has not hedged any of its oil and gas sales to make the most of higher market prices.
The capacity of 1.69 million boe/d was in line with Wall Street estimates, however, the company expected the current quarter’s output would be between 1.71 million and 1.76 million boe/d.
ConocoPhillips anticipates returning $15 billion to shareholders this year by means of dividends and share buybacks, joining Chevron Corp. and others in rising payouts after years of pressure on producers to restrict spending and boost returns.
The company, which kept its spending forecast intact, insignificantly decreased its full-year capacity outlook on uncertainty in Libya. ConocoPhillips hoped that the production would be about 1.74 million boe/d for the year.
The company’s second-quarter adjusted earnings of $3.91 per share overcame Wall Street estimates of $3.80 per share, as Refintiv IBES data says.
ConocoPhillips safely transports oil and natural gas using pipelines, tankers, trucks and rail to connect energy supply to demand. The method the company chooses depends on the project, location, economics, accessibility and environmental considerations. All four methods are proven, efficient and economical ways of getting energy to market.
Working with a leading environmental, social and governance (ESG) consultancy firm the company is designing a Net-Zero Governance Framework, with the goal of identifying how to leverage and optimize our process, system, organizational and governance structure to align and drive the company along a net-zero pathway.
In its Gulf Coast business unit, a project is underway to remove the need for pneumatic-powered scavenger injection pumps at each well pad through the installation of scavenger towers at each central facility location. The project could reduce emissions by around 11,250 metric tons per year.
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A major U.S. shale oil producer is looking to start a land selloff in the lone star state
Pioneer Natural resources is looking to divest properties in the lone star state. According to Rextag, Pioneer’s Delaware assets on sale have a trailing 12 month production of just over 22 MBOE against a total Permian Basin production of almost 212 MBOE. (The sale, if it happens, will effectively lead to a 10% decrease of Pioneer’s asset base in terms of the previous year's production.)
Staying on Top of Drilling Activity Trends in the Permian Basin
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Oil output in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. Additionally, gas productivity in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Given that this growth has been expected, recent global market changes make forecasting the output even more challenging. Learning how production will change is easier with early activity tracking, a new service recently launched by Rextag – Pad Activity Monitor. With the help of PAM, you are able to monitor well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days. Additionally, it cuts down activity reporting lag times by at least 98%, from 120-180 days down to just 5-8 days. In order to access reports, charts, tables, and mapping visualizations via Rextag’s Energy DataLink use a web-based application allowing users to filter, download and identify activity on a map or data table. Moreover, customers will be able to set up daily, weekly, and monthly email report notifications.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/184Blog_Rangeland Energy Divests Canadian Pipeline to Kingston Midstream.png)
Rangeland Energy has agreed to sell Rangeland Midstream Canada to Kingston Midstream Alberta and remains committed to future Canadian midstream investments. Texas-based Rangeland Energy, supported by financial partner EnCap Flatrock Midstream, has inked a deal to sell its Canadian subsidiary, Rangeland Midstream Canada Ltd., to Calgary's Kingston Midstream Alberta Ltd. for cash.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/187Blog_ONEOK Completes Acquisition of Magellan Midstream.png)
The merger between ONEOK and Magellan received approval from Magellan shareholders, securing just 55% of the total votes at Magellan’s meeting on Sept. 21. ONEOK Inc. has successfully concluded the acquisition of Magellan Midstream Partners LP on Sept. 25. The deal will bring together their respective assets and expertise, resulting in a powerful entity boasting an extensive network of approximately 25,000 miles of pipelines primarily focused on transporting liquids.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/186Blog_Viper Energy Secures $1 Billion in Permian.png)
Viper Energy's deal, comprised of cash and equity, secures an additional 2,800 net royalty acres in the Midland Basin and 1,800 in the Delaware Basin. Viper Energy Partners LP, a Diamondback Energy Inc. subsidiary, has inked a deal to acquire mineral and royalty interests in the Permian Basin. The deal, valued at around $1 billion, is with Warwick Capital Partners and GRP Energy Capital. Viper was established by Diamondback with the purpose of owning, purchasing, and capitalizing on oil and natural gas assets in North America, specifically targeting mineral and royalty interests.