📊 ConocoPhillips: The King of Margin

In this edition, we return to more traditional energy operators and look at ConocoPhillips. As usual, we have plenty of graphs to distil and extract the critical information for the 24Q1 earning report.

Income Statement

Similar to its peers, ConocoPhillips has seen a slump in its Q1 income statement. However, as you will see in the next section, it’s not because of a lack of trying. On average, it seems the average realisation price has dropped, resulting in lower margins for products.

An overall profit margin of 17.6% was achieved; however, this is down from this period last year at 18.8%.

Production

These charts show the plot of the production per day and the average realised price for each product. The graphs have contour lines to identify the sale price (production x realised price = sale price). As we can see, production is high (far to the right) for most of the products this quarter, and the realised prices aren’t as impressive as they could be.

Cashflow Statement

Despite the substantial margin, ConocoPhillips dipped into their cash reserves and reduced it by U$54M. However, ConocoPhillips issued a considerable buyback for stocks and a healthy dividend payment. A significant amount of their cash flow was consumed as capital expenditure.

Capital Expenditure

ConocoPhillips has had a consistent total capital expenditure investment rate over the last year. Alaska has almost doubled its investment, whereas corporate has halved its spending. The Alaskan spent looks to be associated with the Willow project and the Nuna project. The Willow project, estimated to produce 180MBD at peak, is reportedly on track for its first oil in 2029. This would double the production of the Alaskan segment. If the production were to come online today, it would contribute 16% of the total output for ConocoPhillips.

Profit Comparison

Comparing the Q1 Profit and Revenue to BP and ExxonMobil, we can see ConocoPhillips has a considerably lower Net Revenue. However, they converted that into a net profit similar to BP’s. This demonstrates that out of the three, ConocoPhillips has the most substantial overall profit margin for this quarter at 17.6%.

Balance Sheet

There were several changes in the current assets and liabilities. However, they have minimal impact on the overall asset balance.

Cheers,

Connor

All data can be found at the ConocoPhillips Investors website