ConocoPhillips touts Marathon Oil deal, stock dividends
Expecting to close its acquisition of Marathon Oil by year-end, ConocoPhillips stayed on track in the third quarter to distribute at least $9 billion to its shareholders in 2024.
“We have officially incorporated our variable return of cash into the ordinary dividend and consistent with our long-term track record we are confident we can grow our ordinary dividend at a top quartile rate relative to the S&P 500,” said Chairman-Chief Executive Officer Ryan M. Lance from Houston. “On buybacks our planned fourth-quarter share repurchases will approach $2 billion and we have increased our existing share repurchase authorization by up to $20 billion.”
Lance said integration planning is progressing well in light of the Marathon Oil acquisition.
“The team (has) now fully mapped out how we plan to achieve the initial guidance of at least $500 million of synergies, primarily from the overhead and operating cost reduction categories,” he said. “And we now expect at least to double the initial $500 million target driven by capital optimization.
“While we are still finalizing our 2025 budget and will provide formal guidance in February, we are confident that the combined company can grow at a low single-digit rate again in 2025 with pro-form capital expenditures of less than $13 billion.”
Executive Vice President-Chief Financial Officer William L. Bullock Jr. said ConocoPhillips generated $1.78 per share in adjusted earnings during the third quarter.
“We produced 1,917,000 barrels of oil equivalent per day, representing 3 percent underlying growth year over year,” Bullock said. “That’s despite having an estimated impact of 85,000 barrels per day of turnarounds during the quarter including approximately 55,000 barrels for Surmont’s once every five-year turnaround.”
The Surmont field is in northeastern Alberta, Canada.
Bullock said the company’s production in the lower 48 states was a record of 1,147,000 barrels of oil equivalent per day, which represents 6 percent underlying growth year over year.
“Now by basin we produced 781,000 in the Permian, 246,000 in the Eagle Ford and 107,000 in the Bakken,” he said. “Operating working capital was a $1 billion tailwind in the quarter, capital expenditures were $2.9 billion and we returned $2.1 billion to shareholders including $1.2 billion in buybacks and $900 million in ordinary dividends and VROC payments.
“We ended the quarter with cash and short-term investments of $7.1 billion and $101 billion in long-term liquid investments. For the fourth quarter we expect production to be in a range of 1.99 million to 2.03 million barrels per day and for the full year we now expect production to be 1.94 million to 1.95 million barrels per day, up 10,000 barrels per day from prior guidance.”