How Much Capital Will ConocoPhillips Spend Geographically In 2016?

-2.22%
Downside
127
Market
124
Trefis
COP: ConocoPhillips logo
COP
ConocoPhillips

Much like its peers, ConocoPhillips (NYSE:COP), an independent exploration and production company, has been struggling to weather the commodity downturn that began in mid-2014. The company’s price realizations dropped significantly in 1Q’16 as crude oil prices hit multi-year lows of under $30 per barrel in February. This forced the Houston-based oil and gas company to reduce its capital spending budget for 2016 from $6.4 billion to $5.7 billion, post its first quarter results. This represents a drop of almost 50% in the company’s capital spending compared to last year.

Below, we present our estimates of the company’s capital allocation for 2016 based on its geographies. We figure that ConocoPhillips will continue to spend a major portion of its capital expenditure on the Lower 48 and Alaska region, even though these areas have a relatively higher break-even price compared to other tight oil plays in the US.

COP-Q&A-Capex

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Have more questions about ConocoPhillips (NYSE:COP)? See the links below:

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for ConocoPhillips

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