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May 9, 2019
Don Wallette, Jr.
Executive Vice President and Chief Financial Officer
ConocoPhillips
925 N. Eldridge Parkway
Houston, TX 77079
Re: ConocoPhillips
Form 10-K for the Fiscal Year Ended December 31, 2018
Filed February 19, 2019
File No. 001-32395
Dear Mr. Wallette:
We have limited our review of your filing to the financial statements
and related
disclosures and have the following comments. In some of our comments, we may
ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by providing
the requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response to these comments, we may have additional
comments.
Form 10-K for the Fiscal Year Ended December 31, 2018
Financial Statements and Supplementary Data
Oil and Gas Operations (Unaudited)
Reserves Governance, page 153
1. Expand the disclosure of the internal controls used in the preparation of
the Company's
reserves estimates to include the qualifications of the technical person
within DeGolyer
and MacNaughton primarily responsible for overseeing the report included
as Exhibit 99
to the Form 10-K for the fiscal year ended December 31, 2018. Refer to
Item 1202(a)(7)
of Regulation S-K.
Proved Reserves
Natural Gas, page 159
2. The disclosure on page 160 indicates the natural gas production figures
used in the
reconciliation of the changes in total proved reserves includes gas
consumed in production
Don Wallette, Jr.
FirstName LastNameDon Wallette, Jr.
ConocoPhillips
Comapany NameConocoPhillips
May 9, 2019
May 9, 2019 Page 2
Page 2
FirstName LastName
operations. If the amount of natural gas production consumed in
operations is material,
expand your discussion to separately disclose the net quantities of
such production so that
the inconsistency with the gas production figures provided elsewhere
in your filing is
reconciled.
3. If the proved reserves disclosed in your filing include material
amounts of natural gas
consumed in operations, expand your disclosure to clarify the net
amounts of such
reserves. Refer to FASC ASC 932-235-50-10.
Proved Undeveloped Reserves, page 164
4. Your discussion of the changes that occurred due to revisions appears
to indicate that the
downward revisions due to changes in development timing were partially
offset by
positive changes due to higher prices. To the extent that two or more
unrelated factors are
combined to arrive at a change in the net quantities, your disclosure
should separately
identify and quantify each individual factor so that the change in net
quantities of reserves
between periods is fully explained. In particular, disclosure relating
to revisions in
previous estimates should identify such underlying factors as changes
caused by
commodity prices, well performance, improved recovery, uneconomic
proved
undeveloped locations or changes resulting from the removal of proved
undeveloped
locations due to changes in a previously adopted development plan.
Refer to Item 1203(b)
of Regulation S-K. This comment also applies to the comparable
discussion, presented
elsewhere in your filing, of the changes in net quantities of total
proved reserves for each
of the annual periods presented. Refer to FASB ASC 932-235-50-5.
5. Your disclosure indicates that you transferred a material amount of
proved undeveloped
reserves to developed reserves during the year. Expand your disclosure
to include a
discussion of the progress made during the year to convert proved
undeveloped reserves to
proved developed reserves. Refer to Item 1203(c) of Regulation S-K.
Acreage at December 31, 2018, page 173
6. Expand your disclosure to provide the expiration dates relating to
material concentrations
of your undeveloped acreage. Refer to Item 1208(b) of Regulation S-K.
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil
and Gas
Reserve Quantities, page 176
7. Expand your disclosure to explain the circumstances supporting the
disclosure of negative
undiscounted future net cash flows for Alaska and Canada in the
presentation of the
standardized measure of discounted future net cash flows for the
fiscal year ending
December 31, 2016. Refer to the disclosure requirements under FASB ASC
932-235-50-
36 and the definition for proved reserves under Rule 4-10(a)(22) of
Regulation S-X,
respectively.
Don Wallette, Jr.
ConocoPhillips
May 9, 2019
Page 3
8. If the proved reserves disclosed in your filing include material
amounts of natural gas
consumed in operations, expand your disclosure to explain how these
reserves were
accounted for in the calculation of the standardized measure of
discounted future net cash
flows. Refer to FASB ASC 932-235-36.
Index to Exhibits
Exhibit Number 99, page 199
9. The report prepared by the third party petroleum engineering firm does
not appear to
address all of the requirements pursuant to Item 1202(a)(8) of
Regulation S-K. Please
obtain and file revised reserves reports to address the following
points.
The reserves report should state the purpose for which the report
was prepared, e.g. for
inclusion as an exhibit in a filing made with the U.S. Securities
and Exchange
Commission (Item 1202(a)(8)(i)).
The reserves report should include the date on which the report
was completed (Item
1202(a)(8)(ii)).
The reserves report should include statement that the third party
has used all methods
and procedures as it considered necessary under the circumstances
to prepare the
report (Item 1202(a)(8)(viii)).
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact John Hodgin, Petroleum Engineer, at (202) 551-3699 or me
at (202)
551-3489 with any questions.
FirstName LastNameDon Wallette, Jr. Sincerely,
Comapany NameConocoPhillips
Division of
Corporation Finance
May 9, 2019 Page 3 Office of
Natural Resources
FirstName LastName