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Alaska Analyst & Investor Update (7.16.2018)

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Alaska Analyst & Investor Update (7.16.2018)

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ConocoPhillips (COP) today provided an update on its operating plan for Alaska, focusing on the company’s long history of creating value in the state and an ongoing commitment to invest in low cost of supply opportunities. Over the past few years, the company’s Alaska business has undergone a significant transformation, driven by a more competitive fiscal framework, cost reductions, technological advancements and an exploration renaissance.

ConocoPhillips (COP) today provided an update on its operating plan for Alaska, focusing on the company’s long history of creating value in the state and an ongoing commitment to invest in low cost of supply opportunities. Over the past few years, the company’s Alaska business has undergone a significant transformation, driven by a more competitive fiscal framework, cost reductions, technological advancements and an exploration renaissance.

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Alaska Analyst & Investor Update (7.16.2018)

  1. 1. Alaska Analyst & Investor Update J U L Y 1 6 , 2 0 1 8
  2. 2. Cautionary Statement The following presentation includes forward-looking statements. These statements relate to future events, such as anticipated revenues, earnings, business strategies, competitive position or other aspects of our operations, operating results or the industries or markets in which we operate or participate in general. Actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that may prove to be incorrect and are difficult to predict such as operational hazards and drilling risks; potential failure to achieve, and potential delays in achieving expected reserves or production levels from existing and future oil and gas development projects; unsuccessful exploratory activities; difficulties in developing new products and manufacturing processes; unexpected cost increases or technical difficulties in constructing, maintaining or modifying company facilities; international monetary conditions and exchange rate fluctuations; our ability to complete the sale of our announced dispositions on the timeline currently anticipated, if at all; the possibility that regulatory approvals for our announced dispositions will not be received on a timely basis, if at all, or that such approvals may require modification to the terms of our announced dispositions or our remaining business; business disruptions during or following our announced dispositions, including the diversion of management time and attention; our ability to liquidate the common stock issued to us by Cenovus Energy at prices we deem acceptable, or at all; the ability to deploy net proceeds from our announced dispositions in the manner and timeframe we currently anticipate, if at all; potential liability for remedial actions under existing or future environmental regulations or from pending or future litigation; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets; general domestic and international economic and political conditions, and changes in tax, environmental and other laws applicable to ConocoPhillips’ business; the stability and competitiveness of our fiscal framework; and other economic, business, competitive and/or regulatory factors affecting ConocoPhillips’ business generally as set forth in ConocoPhillips’ filings with the Securities and Exchange Commission (SEC). We caution you not to place undue reliance on our forward-looking statements, which are only as of the date of this presentation or as otherwise indicated, and we expressly disclaim any responsibility for updating such information. Use of non-GAAP financial information – This presentation may include non-GAAP financial measures, which help facilitate comparison of company operating performance across periods and with peer companies. Any non-GAAP measures included herein will be accompanied by a reconciliation to the nearest corresponding GAAP measure either within the presentation or on our website at www.conocophillips.com/nongaap. Cautionary Note to U.S. Investors – The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves. We use the term "resource" in this presentation that the SEC’s guidelines prohibit us from including in filings with the SEC. U.S. investors are urged to consider closely the oil and gas disclosures in our Form 10-K and other reports and filings with the SEC. Copies are available from the SEC and from the ConocoPhillips website.
  3. 3. Opening Comments R YA N L A N C E Chairman & CEO
  4. 4. Strategy Hitting on All Cylinders Value Proposition Principles Disciplined Priorities Invest capital to sustain production and pay existing dividend 1st PRIORITY 2nd PRIORITY RETURNS Strong Balance Sheet Diverse, Low CoS Portfolio Capital Flexibility Low Sustaining Price Financial Strength Growing Distributions Disciplined Per- Share CFO Expansion 1By year-end 2018. Our Unique Characteristics 5 Clear, measurable plan to deliver superior returns to shareholders Annual dividend growth 3rd PRIORITY Reduce debt to $15B1; target ‘A’ credit rating 4th PRIORITY 20-30% of CFO total shareholder payout annually 5th PRIORITY Disciplined investment for CFO expansion
  5. 5. ConocoPhillips’ Peer-Leading Position in Alaska 6 0 50 100 150 200 250 300 MBOED 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 MMBOE 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 ThousandNetAcres Largest Producer1 Most Reserves2 Largest Acreage Holder3 Peers include: BP, Caelus, ENI, Hilcorp and XOM. 1Source: Wood Mackenzie, 2018 FY estimate, adjusted to reflect impact of 2018 ConocoPhillips acquisitions. 2Source: Wood Mackenzie, adjusted to approximate oil reserves as of 01/01/18 and reflect impact of 2018 ConocoPhillips acquisitions. 3Source: Reports from Bureau of Land Management & Alaska Department of Natural Resources dated 05/17/18 and 06/04/18, respectively. Only includes acreage position for federal and state lands. Incorporates ConocoPhillips internal data to reflect impact of Kuparuk acquisition.
  6. 6. • Uncompetitive tax structure • Declining production profile • High cost of supply • Limited investment • Focus on Lower 48 unconventionals 2013 Outlook for Asset 2013 Alaska Outlook: Facing Headwinds 7 ConocoPhillips’ Alaska Outlook 2013 2013 Outlook 0 100 200 300 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Production(MBOED)
  7. 7. Current Outlook: Strong Future Spurred by Tax Changes & CoS Focus 8 0 100 200 300 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 1Assumes a stable and competitive fiscal framework, excludes 2018 acquisitions, assumes no change to current working interest and excludes Alaska North Slope gas sales. Current Outlook2013 Outlook • Senate Bill 21 improved fiscal framework • Technological advancements and innovations target new and bypassed resources • Comprehensive effort to capture value from legacy fields and infrastructure • Renewed focus on exploration yields early success • Company-wide focus on lowering cost of supply and shift to liquids has made Alaska competitive within the portfolio Drivers of Transformation ConocoPhillips’ Alaska Outlook1 2013 vs. Current (excluding 2018 acquisitions) 0 100 200 300 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 ConocoPhillips’ Alaska Outlook1 2013 vs. Current (including 2018 acquisitions) 1Assumes a stable and competitive fiscal framework, includes impact of 2018 acquisitions at working interests of: Western North Slope = 100% / Kuparuk = ~95%, and excludes Alaska North Slope gas sales. Production(MBOED) supported by recent strategic transactions STRENGTHENED OUTLOOK
  8. 8. Our Alaska Plan is Good for All Stakeholders 9 ► Drives peer-leading low sustaining price ► ConocoPhillips provided 35% of State of Alaska’s petroleum revenue ‛13-‛17 ► Realized price similar to Brent ► Generates profitable growth from diversified investments ► Provides low cost of supply investment opportunities ► Delivers competitive cash and earnings margins ► Integrated value chain provides access to multiple markets ► Offers significant exploration running room ► >20,0001 jobs created by our activity ► Impactful community investment & volunteerism ► Priority on environmental, social and governance stewardship 1Source: The Role of the Oil and Gas Industry in Alaska’s Economy; The McDowell Group; May 2017. ► Leverages ownership in existing infrastructure Aligns with ConocoPhillips’ Strategy Supports Alaska’s Economy Creates Value for Shareholders
  9. 9. Today’s Agenda 10 Our Future in Alaska Our Legacy in Alaska Al Hirshberg • Low cost of supply, low-decline base production • Robust inventory of future projects to drive growth • Future upside from applied technology and innovation • ~$1B/yr capital delivers 225+ MBOED for a decade Matt Fox • 0.5-1.1 BBOE1 of discovered resource2 in Alaska since 2016 • Willow confirmed as stand-alone hub • Willow: $2-3B of capital over 4-5 years required to achieve 1st oil • Significant remaining undrilled resource potential 1Gross discovered resource. 2Discovered resources are known accumulations of quantities of oil and gas estimated to exist in naturally occurring accumulations.
  10. 10. Our Legacy in Alaska A L H I R S H B E R G EVP, Production, Drilling & Projects
  11. 11. Conventional Assets Play Important & Unique Role in Our Portfolio <$50/BBL Cost of Supply2 Resource (as of Nov. 2017) 12 1Excludes exploration resources. 2Cost of supply is the WTI equivalent price that generates a 10 percent after-tax return on a point-forward and fully burdened basis. Fully burdened includes capital infrastructure, foreign exchange, price-related inflation and G&A. Resource based on Petroleum Resources Management System, developed by industry to classify recoverable hydrocarbons as commercial or sub-commercial to reflect their status at the time of reporting. 3The realized price at which revenues from commodity sales equal costs (operating costs, taxes, general & administrative costs and tariffs) plus capital (base, development, projects and exploration) expenditures. 0 10 20 30 40 50 0 CostofSupply($/BBL) 155 100 Net Resources (BBOE) 34 29 21 13 2015 2018E Costs Capital 55 42 2018E vs. 2015 25% UNDERLYING IMPROVEMENT ANS Cash-Balanced Price3 ($/BBL) ConventionalUnconventional LNG & Oil Sands 1.6 BBOE Conventional Resource in AK 0.4 BBOE Added Through 2018 Acquisitions 2.0 BBOE1 Total Net Captured Resource <$40/BBL CoS
  12. 12. 0 5 10 15 Miles N AT I O N A L P E T R O L E U M R E S E R V E – A L A S K A Prudhoe Bay Non-Operated (WI=36%) Projects Central Processing Facility (CPF) ConocoPhillips Acreage Trans Alaska Pipeline System (TAPS) Kuparuk (WI=~95%) CPF3 CPF2 Prudhoe Bay Non-Operated (WI=36%) Projects Central Processing Facility (CPF) ConocoPhillips Acreage Trans Alaska Pipeline System (TAPS) CPF1 N AT I O N A L P E T R O L E U M R E S E R V E – A L A S K A Western North Slope (WI=100%) CPF3 CPF1 CPF2 N AT I O N A L P E T R O L E U M R E S E R V E – A L A S K A GMT-2 GMT-1 Alpine Willow Area Kuparuk (WI=~95%) Prudhoe Bay Non-Operated (WI=36%) Projects Central Processing Facility (CPF) ConocoPhillips Acreage Trans Alaska Pipeline System (TAPS) CD5 Legacy Position Sets Foundation for Future Growth 131Estimated pro-forma annualized production including impacts from recent acquisitions. • ConocoPhillips operates Kuparuk and Western North Slope (WNS) • Operated assets: 4 central processing facilities and 54 drill sites • Years of identified inventory in Kuparuk and Western North Slope • Exploration renaissance driving westward expansion • Estimated 2018 production of ~225 MBOED1; ~40% of State of Alaska’s production North Slope A L A S K A Valdez Anchorage NPR-A
  13. 13. 1Assumes a stable and competitive fiscal framework, includes impact of 2018 acquisitions, at working interests of: Western North Slope = 100% / Kuparuk = ~95%, and excludes Alaska North Slope gas sales. 1Assumes a stable and competitive fiscal framework , includes impact of 2018 acquisitions at working interests of: Western North Slope = 100% / Kuparuk = ~95%, and excludes Alaska North Slope gas sales. 2ConocoPhillips net production associated with Alaska North Slope gas sales based on the State of Alaska’s timeline, not included in ConocoPhillips production plots. Compelling Plan Creates Significant Value for 10+ Years 14 BASE • Low-risk, predictable production • Significant improvement in lowering base decline • Identified opportunities to sustain cost of supply reductionsBase 0 100 200 300 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 DEVELOPMENT PROGRAMS • Multi-year drilling campaigns • Numerous drilling technology advancements underway • Pioneering extended-reach drilling (ERD) Development 0 100 200 300 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 PROJECT INVENTORY • CD5 led westward expansion to new sites • Near-term contribution from GMT & NEWS • GMT-1 first oil 2018; GMT-2 first oil 2021 • Eastern NEWS first oil estimated 2023 • Additional upside from technology and innovation Projects 0 100 200 300 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 EXPLORATION Exploration 0 100 200 300 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 14 ConocoPhillips' Alaska Outlook1 Production(MBOED) 0 40 80 120 2025 2029 2033 ANS Gas Sales2 (MBOED)
  14. 14. 0 100 200 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 • Extensive enhanced oil recovery expertise with waterflood and miscible water alternating gas (MWAG) recovery • Ongoing gas lift optimization throughout operations • Leveraging data analytics to drive MWAG sweep efficiency, improve gas handling and increase recovery Base Production: Significant Progress on Lowering Decline Rate 15 Primary Recovery Water Flood MWAG Average Reservoir Recovery by Method ~15% ~45% ~60% MWAG INJECTOR PRODUCER MISCIBLE GAS = SOLVENT RESIDUAL OIL BEHIND WATERFLOOD FRONT OIL BANK Alaska Base Decline Rate Improved to 6% (Old decline rate ~8%) Production1(MBOED) 1Assumes a stable and competitive fiscal framework, includes impact of 2018 acquisitions at working interests of: Western North Slope = 100% / Kuparuk = ~95%, and excludes Alaska North Slope gas sales.
  15. 15. Base Production: Sustainable Reductions in Cost of Supply 16 Lowered Maintenance Cost & Increased Facility Uptime • Harnessing organizational efficiency to improve productivity • Goal to level-load activity and rapidly apply learnings • Infrastructure program phased with development to minimize peaks and valleys Lower Intervention Costs & Increased Efficiency 1Person = ConocoPhillips employees and contingent workers; BOPD = gross operated barrels. 2Uptime excludes turnarounds. Achieving Personnel-Driven Productivity Improvements1 2 0 1 5 96 O p e r a t e d B O P D p e r p e r s o n 2 0 1 8 139 O p e r a t e d B O P D p e r p e r s o n 45%IMPROVEMENT 80% 84% 88% 92% 96% 100% 0 50 100 150 200 250 2014 2015 2016 2017 FacilityUptime2 OperatedMaintenanceCapital($MM) 80% 84% 88% 92% 96% 100% 0 50 100 150 200 2014 2015 2016 2017 WellUptime2 WellInterventionCost($MM) 50% REDUCTION IN COST HISTORIC HIGH WELL UPTIME >50% REDUCTION IN COST HIGH OVERALL UPTIME
  16. 16. Coiled Tubing Drilling: Targets Extensive Inventory of Bypassed Oil • Driven by 4D seismic and high-resolution simulation • Attractive 10-year portfolio with average cost of supply of ~$30/BBL • Safe and predictable operations with continuous efficiency improvements 17 2014 1Q 2018 Average Rate of Penetration (ft/day) ~2XFASTER Example: Kuparuk Octa-Lateral 6350 6375 6400 6375 Example: Kuparuk Octa-Lateral Well Path ~20% OF CONOCOPHILLIPS ALASKA PRODUCTION developed with coiled tubing drilling
  17. 17. Old Technology New Technology Drilling Technology Advancements: Higher Recovery, Lower CoS 18 14K ft 30K ft 30K ft 5 ft sands New TechnologyOld Technology Achieving Cost & Time Savings Old Technology New Technology ~5XINCREASE More Footage of Reservoir Drilled ~30%DECREASE Extending Our Reach with Managed Pressure Drilling Threading the Needle with Geo-Steering Drill & Case in One Run with Steerable Drilling Liners Accessing More Reservoir with Multi-Laterals
  18. 18. Successful CD5 Execution: Leading the Way to NPR-A 19 CD5 Expansion Drives Higher Production (BOPD) • Completed on budget, ahead of schedule and achieved higher initial and overall production rates • Accessed reservoir extending beyond seismic resolution • North American record-setting well lengths and multi-laterals 55% Reduction in CD5 Cost of Supply ($/BBL) 66 36 30 10 14 6 6 FID Sanction Development Optimization Improved Well Performance Cost Efficencies FID Scope Expansion Efficiencies Expansion CD5 Achieves Peak Rates1 for Alaska (BOPD) 1Monthly average gross oil volumes derived from public AOGCC information. 0 2,000 4,000 6,000 8,000 10,000 12,000 2015 2016 2017 2018 CD5 wells FID Scope ExpansionFID Sanction 0 10,000 20,000 30,000 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
  19. 19. 44 31 5 5 3 FID Facility Cost Production Optimization Operating Cost ERD Program Outlook resource to be developed with ERD >100 MMBOE Extended-Reach Drilling: Maximize Recovery, Minimize Footprint • Unique solution for minimizing footprint in arctic environment • Allows utilization of existing gravel pads to reach new resource • Taking delivery of new-build ERD rig in 2020 • Largest mobile land rig in North America • Capable of drilling more than 7 miles away from the pad • Compatible with DEEP1 drilling automation technology 65-Acre Gravel Pad (1970)** 12-Acre Gravel Pad (2016)** 12-Acre Gravel Pad (Future ERD)** Drilling Area Accessible from Pads ~3 sq. miles ~55 sq. miles ~154 sq. miles Alaska North Slope Reduced Footprint* *Assumes similar reservoir depth **1970 drilling radius ~ 5,000 ft vs. 2016 drilling radius ~ 22,000 ft vs. future ERD radius ~ 37,000 ft 30% Reduction in Cost of Supply ($/BBL) 20 Future ERD ~37,000’ 2016 ~22,000’ 1970 ~5,000’ Manhattan Bronx Brooklyn Queens 1DEEP (Drilling Execution Efficiency Platform) is proprietary ConocoPhillips drilling technology.
  20. 20. 2018 2020 2022 2024 2026 2028 GMT- 2 ENEW S GMT- 1 1H NEWS Identified Future Inventory: Low-Risk, Multi-Year Opportunities 21 • Extensive inventory driven by fiscal framework improvement, cost of supply reductions, technology and innovation • Large portfolio of development programs and projects • Significant reduction in minimum economic size due to • Infrastructure access and spare capacity • Applied learnings across operations Alaska Operated Resource Opportunity Pipeline (Excluding Exploration) Western North Slope 1Assumes a stable and competitive fiscal framework, includes impact of 2018 acquisitions at working interests of: Western North Slope = 100% / Kuparuk = ~95%, and excludes Alaska North Slope gas sales. over the next decade ~0.8 BBOE1 RESOURCE DEVELOPED Development Drilling 1-2 Rotary Rigs & Coiled Tubing Drilling 1H NEWSKuparuk Eastern NEWS Development ERD Rig Rotary Rig & Coiled Tubing Drilling Extended-Reach Drilling Development DrillingDev DrillingGMT-1 GMT-2 Development Development Drilling Project 1st oil Dev Drilling
  21. 21. 0 100 200 300 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Upside Potential: Technology & Innovation is Still in Early Innings Longer Laterals Enhanced Recovery Thin-Bed Reservoirs Multi-Laterals Ongoing Efficiency Improvements Reservoirs Within Reach 4D Seismic Production Technologies ConocoPhillips’ Alaska Outlook1 Numerous Technology & Innovation Applications Can Drive Additional Upside Above Outlook Production(MBOED) Development ProjectsBase to deliver 225+ MBOED ~$1B/YEAR CAPITAL 1Assumes a stable and competitive fiscal framework, includes impact of 2018 acquisitions at working interests of: Western North Slope = 100% / Kuparuk = ~95%, and excludes Alaska North Slope gas sales. 22
  22. 22. 0 100 200 300 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Upside Potential: Exploration is a Whole New Ballgame Development Projects ExplorationBase 1Assumes a stable and competitive fiscal framework, includes impact of 2018 acquisitions at working interests of: Western North Slope = 100% / Kuparuk = ~95%, and excludes Alaska North Slope gas sales. 2Gross discovered resource in Alaska since 2016. Production(MBOED) discovered resource 500 MMBOE – 1.1 BBOE2 Longer Laterals Enhanced Recovery Thin-Bed Reservoirs Multi-Laterals Ongoing Efficiency Improvements Reservoirs Within Reach 4D Seismic Production Technologies Numerous Technology & Innovation Applications Can Drive Additional Upside Above Outlook ConocoPhillips’ Alaska Outlook1 23
  23. 23. Our Future in Alaska M AT T F O X EVP, Strategy, Exploration & Technology
  24. 24. NPR-A Discoveries Open New Westward Frontier 25 Pre-2015 2015 2016 2017 2018 2019+Pre-2015 2015 2016 2017 2018 2019+Pre-2015 2015 2016 2017 2018 2019+ • Industry chases deeper Jurassic targets • ConocoPhillipsevaluates NPR-ABrookianpotential Kuparuk GMT-2 GMT-1 CPF1 CPF2 N AT I O N A L P E T R O L E U M R E S E R V E – A L A S K A Western North Slope Alpine CPF3 Prudhoe Bay Trans Alaska Pipeline System (TAPS) Projects Central Processing Facility (CPF) ConocoPhillips Acreage CD5 Willow Discoveries • Willow discovery with identified upside • Acquired new 3D CSIseismic Kuparuk GMT-2 GMT-1 CPF1 CPF2 N AT I O N A L P E T R O L E U M R E S E R V E – A L A S K A Western North Slope Alpine CPF3 Willow Prudhoe Bay Trans Alaska Pipeline System (TAPS) Projects Discoveries Central Processing Facility (CPF) ConocoPhillips Acreage CD5 • Acquired additional ~600M net acres for ~$30/acre • ConocoPhillips increases working interest in Western North Slope to 100% West Willow Kuparuk GMT-2 GMT-1 CPF1 CPF2 N AT I O N A L P E T R O L E U M R E S E R V E – A L A S K A Western North Slope Alpine CPF3 Willow Trans Alaska Pipeline System (TAPS) Prudhoe Bay Projects Discoveries Central Processing Facility (CPF) ConocoPhillips Acreage CD5 • Executed largest E&A program since 2002 • Appraised Willow; explored for upside Kuparuk Prudhoe Bay N AT I O N A L P E T R O L E U M R E S E R V E – A L A S K A Western North Slope Undrilled Prospects Trans Alaska Pipeline System (TAPS) Projects Discoveries Central Processing Facility (CPF) ConocoPhillips Acreage GMT-2 GMT-1 CPF1 CPF2 West Willow Alpine CPF3 Willow North Slope A L A S K A Valdez Anchorage NPR-A CD5 • 0.5– 1.1 BBOEgrossdiscoveredresource • 75%ofthe play remainsto be explored 0 5 10 15 Miles
  25. 25. Testing the Brookian Topset Play 26 Sandy Basin Floor Turbidite Fan Beach Sands Delta Sands River Sands North Exploration TargetBrookian Discovery Existing Jurassic Fields WillowWest Willow GMT-2 AlpineGMT-1 3,000 VerticalDepth(feet) 5,000 7,000 9,000 ConocoPhillips Proprietary Seismic Data Narwhal
  26. 26. Arctic Expertise Enabled Efficient, Successful ‘18 Exploration Program • Unique arctic expertise enabled successful program completion in winter operations window • Shallow targets (~4,000 ft) allowed multi- well program • Achieved efficient de-risking of Willow resource potential • Initial Narwhal trend exploration identified resource upside • Activities supported by 3 drilling rigs, 3 well test units, 2 ice road teams and seismic crew • 370,000 total hours worked with no injuries Central Processing Facility ProjectsExploration and Appraisal wells Alpine GMT-2 GMT-1 Putu Stony Hill Ice Roads Ice Roads • 58 miles total, 35 ft. wide • No lasting impact CSI Seismic • 250 sq. miles of 3D CSI seismic Greater Willow Exploration & Appraisal • 4 wells, 3 well tests • 16,100 ft. drilled & 148 ft. cored <$1/BBL finding costs 27 0 5 10 15 Miles CD5 Narwhal Exploration • 2 wells, 2 well tests • 22,600 ft. drilled, 152 ft. cored • Multiple targets
  27. 27. 2018 Exploration Program Confirms Stand-Alone Hub at Willow 28 Greater Willow Area • 2018 Willow appraisal activities and analysis: • Confirmed oil-filled reservoir with 3 new appraisal wells and 3 flow tests • API viscosity range: 41° to 44° • Facility-limited vertical test rate ~1,000 BOPD • Appraisal results combined with CSI data indicate more potential on-trend resource to north and south • Additional oil discovery at West Willow creates possibility for tie-back to Willow hub • 2019 Greater Willow Area appraisal season needed to optimize development plan current discovered resource 400 – 750 MMBOE1 2018 Well 2018 Well Test Preliminary Discovered Resource Range Increased West Willow 1 T7 T2 T6 T9 T8 0 5 10 15 Miles Willow Discovery Well 1Gross discovered resource in Alaska since 2016.
  28. 28. Willow Development: Optimize Based on Cost of Supply • Entering pre-FEED to size development concept • Horizontal MWAG development from inception • $2-3B of capital over 4-5 years required to achieve 1st oil • Multiple years of development drilling post-1st oil • Cost of supply <$40/BBL 1st oil 2024-2025 PLANNING FOR FID IN 2021 Optimize Facility Sizing & Installation Facility & Drill Site Design Locating New Construction Materials Gravel Sourcing Appraisal Wells & Technical Evaluation Subsurface Characterization Utilizing Existing Pipeline Network Transportation Infrastructure Commencing Federal Permitting Process Permitting / EIS Process Leveraging Kuparuk for Willow EOR Source Water for Injection Innovative Approach to Lower Cost & Risk Large Module Offload Location 29 CostofSupply,$/BBL Throughput Capacity Sweet Spot Under- Capitalize Over- Capitalize
  29. 29. current discovered resource 100 – 350 MMBOE1 Narwhal Trend: Promising Discoveries with Access to Infrastructure 30 • Putu and Stony Hill wells were drilled, cored and flow tested on the Narwhal trend in 2018 • Prospects originally identified through seismic amplitude mapping • Additional appraisal required for both discoveries • Multiple development options possible • Ability to leverage legacy infrastructure makes these commercially attractive opportunities Putu 2A Putu Seismic Amplitude 2018 Exploration Bottom Hole Locations Central Processing FacilityProjects Discoveries 2018 Well Tests 1Gross discovered resource in Alaska since 2016. Alpine GMT-2 GMT-1 Stony Hill Putu 2/2A 0 5 10 15 Miles CD5 Narwhal Trend
  30. 30. exploration upside 75% PORTFOLIO UNDRILLED Significant Future Exploration & Appraisal Planned 31 Greater Willow Appraisal • Evaluate horizontal well performance • Determine lateral reservoir connectivity • Appraise West Willow Narwhal Appraisal • Verify recoverable volumes • Evaluate well performance 2019 Program Focused on Existing Discoveries Resolve Remaining Uncertainties to Sanction 2020+ Program Focused on Remaining Potential Test Full Prospect Inventory ProjectsDiscoveries Central Processing FacilityConocoPhillips AcreageUndrilled Prospects N A T I O N A L P E T R O L E U M R E S E R V E – A L A S K A Western North Slope 0 5 10 15 Miles GMT-2 GMT-1 West Willow Alpine Willow 1Gross discovered resource in Alaska since 2016. discovered resource 500 MMBOE – 1.1 BBOE1 CD5
  31. 31. 0 100 200 300 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Compelling Alaska Plan Creates Significant Value for 10+ Years 32 ConocoPhillips’ Alaska Outlook1 • High-quality, low cost of supply source of growth for ConocoPhillips • Realized price similar to Brent • Experienced operator with differential arctic capability • Existing infrastructure within a world-class hydrocarbon province • Transformation driven by competitive fiscal framework, technology and exploration renaissance • 2.0 BBOE net of <$40/BBL cost of supply resource in legacy Alaska assets • 0.5 – 1.1 BBOE gross of discovered resource since 2016 with 75% of play undrilled • Continue to unlock Alaska’s energy potential for years to come Aligns with ConocoPhillips’ Strategy – Supports Alaska’s Economy – Creates Value for Shareholders Production(MBOED) 1Assumes a stable and competitive fiscal framework, includes impact of 2018 acquisitions at working interests of: Western North Slope = 100% / Kuparuk = ~95%, and excludes Alaska North Slope gas sales.
  32. 32. Question & Answer Session

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