UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):   October 25, 2018
ConocoPhillips
(Exact name of registrant as specified in its charter)
Delaware
001-32395
01-0562944
(State or other jurisdiction of
(Commission
(I.R.S. Employer
incorporation)
File Number)
Identification No.)
600 North Dairy Ashford
Houston, Texas 77079
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:  (281) 293-1000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02 Results of Operations and Financial Condition.
On October 25, 2018, ConocoPhillips issued a press release announcing the company's financial and operating results for the quarter ended September 30, 2018.  A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.  Additional financial and operating information about the quarter is furnished as Exhibit 99.2 hereto and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.
(d) Exhibits     
Exhibit No.     Description 
       
99.1    Press release issued by ConocoPhillips on October 25, 2018.
99.2    Supplemental financial information.


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
CONOCOPHILLIPS
   
   
   
 
/s/ Glenda M. Schwarz
 
Glenda M. Schwarz
Vice President and Controller
   
October 25, 2018
 
 

Exhibit 99.1

ConocoPhillips Reports Third-Quarter 2018 Results; Disciplined, Returns-Focused Plan On Track

HOUSTON--(BUSINESS WIRE)--October 25, 2018--ConocoPhillips (NYSE: COP) today reported third-quarter 2018 earnings of $1.9 billion, or $1.59 per share, compared with third-quarter 2017 earnings of $0.4 billion, or $0.34 per share. Excluding special items, third-quarter 2018 adjusted earnings were $1.6 billion, or $1.36 per share, compared with third-quarter 2017 adjusted earnings of $0.2 billion, or $0.16 per share. Special items for the current quarter were primarily for amounts recognized from the PDVSA arbitration settlement, partially offset by unrealized losses on Cenovus Energy equity.

Third-Quarter Highlights and Recent Announcements

  • Cash provided by operating activities was $3.4 billion. Excluding working capital, cash from operations of $3.5 billion exceeded capital expenditures, dividends and share repurchases by $0.6 billion.
  • Third-quarter production excluding Libya of 1,224 MBOED; year-over-year underlying production excluding the impact of closed dispositions grew 6 percent overall and 28 percent on a production per debt-adjusted share basis.
  • Year-over-year production from the Lower 48 Big 3 unconventionals grew by 48 percent.
  • During the quarter, achieved first production from Bohai Phase 3 and from the final phase of drilling at Bayu-Undan. GMT-1 achieved first production in October.
  • Ended the quarter with cash, cash equivalents and restricted cash totaling $3.9 billion and short-term investments of $0.9 billion, equating to $4.8 billion of ending cash and short-term investments.
  • Repurchased $0.9 billion of common shares outstanding, bringing year-to-date repurchases to $2.1 billion.
  • Reached a settlement agreement with PDVSA to fully recover an arbitration award of approximately $2 billion; recognized cash and commodities totaling $345 million in the quarter, with the remainder of the approximately $500 million in initial payments due in the fourth quarter.
  • Announced Barnett and Greater Sunrise dispositions for $580 million before customary adjustments.
  • Received credit rating upgrades from Fitch and Moody’s.
  • Announced quarterly dividend increase of 7 percent to 30.5 cents per share.

“We’re delivering another year of strong performance by successfully executing our disciplined, returns-focused plan,” said Ryan Lance, chairman and chief executive officer. “We’ve accomplished many strategic, financial and operational milestones this year, ahead of our original schedule. Our strategy is designed to generate superior returns through cycles by maintaining discipline, focusing on free cash flow and allocating this cash according to clear, shareholder-friendly priorities. This is what the market can expect from us again in 2019.”


Third-Quarter Review

Production excluding Libya for the third quarter of 2018 was 1,224 thousand barrels of oil equivalent per day (MBOED), an increase of 22 MBOED compared with the same period a year ago. The third-quarter volume impact from closed dispositions was approximately 50 MBOED in 2017. Excluding this impact, underlying production increased 6 percent. The increase was primarily due to growth from the Big 3 unconventionals, development programs in Europe and Alaska, and ramp-up of major projects in Asia Pacific. These more than offset normal field decline. Production from Libya was 37 MBOED.

In the Lower 48, production from the company’s high-margin Big 3 unconventionals grew to 313 MBOED, reflecting a 48 percent increase year-over-year. Production from the Big 3 unconventionals in the third quarter of 2017 was impacted by 15 MBOED from Hurricane Harvey. Excluding this impact, growth was 38 percent year-over-year. Production from the Big 3 unconventionals is expected to grow more than 35 percent for the full year.

During the quarter, the company achieved first production at Bohai Phase 3 and from the final phase of drilling at Bayu-Undan. In Alaska, first production was achieved from GMT-1 in October. The company also sanctioned GMT-2, which leverages existing infrastructure to lower its cost of supply and minimize the environmental footprint. Significant turnarounds were safely and successfully completed in the Western North Slope and Prudhoe Bay in Alaska, as well as in China and Malaysia. In Europe, production was impacted by an unplanned outage at a third-party plant that processes gas from the East Irish Sea in the United Kingdom. Production from the East Irish Sea is expected to resume in the fourth quarter.

Earnings increased versus the third quarter of 2017 primarily as a result of higher realized prices across all commodities, amounts recognized from the PDVSA arbitration settlement, and higher sales volumes. Sales volumes for the quarter exceeded production, resulting in a favorable impact to earnings of approximately $80 million. Adjusted earnings were improved compared with third-quarter 2017 primarily due to higher realized prices and sales volumes. The company’s total realized price was $57.71 per barrel of oil equivalent (BOE), a 46 percent improvement compared with $39.49 per BOE in the third quarter of 2017, reflecting stronger marker prices and a more liquids-weighted portfolio.

For the quarter, cash provided by operating activities was $3.41 billion. Excluding a ($0.05) billion change in working capital, ConocoPhillips generated $3.46 billion in cash from operations. This exceeded $1.6 billion in capital expenditures and investments, $0.93 billion of repurchased shares and $0.33 billion of dividends by $0.6 billion.

Nine-Month Review

ConocoPhillips’ nine-month 2018 earnings were $4.4 billion, or $3.72 per share, compared with a nine-month 2017 loss of $2.4 billion, or ($1.98) per share. Nine-month 2018 adjusted earnings were $4.0 billion, or $3.41 per share, compared with nine-month 2017 adjusted earnings of $0.2 billion, or $0.16 per share.

Production excluding Libya for the first nine months of 2018 was 1,221 MBOED, compared with 1,403 MBOED for the same period in 2017. The nine-month volume impact from closed dispositions was approximately 240 MBOED in 2017. Excluding the impact from closed dispositions, underlying production increased 5 percent. The increase was primarily due to growth from the Big 3 unconventionals, development programs in Europe and Alaska, and ramp-up of major projects in Asia Pacific. These more than offset normal field decline.

The company’s total realized price during this period was $54.20 per BOE, compared with $37.10 per BOE in the first nine months of 2017. This reflected stronger marker prices and a more liquids-weighted portfolio.

For the nine months ended Sept. 30, 2018, cash provided by operating activities was $9.15 billion. Excluding a $0.04 billion change in working capital, ConocoPhillips generated $9.11 billion in cash from operations. This exceeded $5.1 billion in capital expenditures and investments, $2.1 billion of repurchased shares and $1.0 billion of dividends by $0.9 billion. In addition, the company paid $5.0 billion to reduce debt and sold $1.0 billion of short-term investments. The $5.1 billion in capital expenditures and investments included $0.4 billion for the Alaska Western North Slope bolt-on acquisition and $0.1 billion to acquire additional acreage in the Montney in Canada.


Outlook

Fourth-quarter 2018 production is expected to be 1,275 to 1,315 MBOED, reflecting the completion of seasonal turnarounds, growth from several conventional project startups and ongoing development in the unconventionals. This guidance includes impacts expected from the previously announced Barnett disposition and excludes Libya.

The company adjusted its 2018 capital guidance to $6.1 billion versus the prior guidance of $6 billion, reflecting higher partner-operated spend. This guidance excludes the previously announced $0.4 billion bolt-on acquisition in the Alaska Western North Slope and $0.1 billion to acquire additional acreage in the Montney in Canada. Full-year guidance for depreciation, depletion and amortization expense was updated to $6.0 billion from $5.9 billion. The company’s other guidance items are unchanged.

ConocoPhillips will host a conference call today at 12:00 p.m. EDT to discuss this announcement. To listen to the call, as well as view related presentation materials and supplemental information, go to www.conocophillips.com/investor.

--- # # # ---

About ConocoPhillips

ConocoPhillips is the world’s largest independent E&P company based on production and proved reserves. Headquartered in Houston, Texas, ConocoPhillips had operations and activities in 17 countries, $71 billion of total assets, and approximately 11,100 employees as of Sept. 30, 2018. Production excluding Libya averaged 1,221 MBOED for the nine months ended Sept. 30, 2018, and proved reserves were 5.0 billion BOE as of Dec. 31, 2017. For more information, go to www.conocophillips.com.


CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This news release contains forward-looking statements. Forward-looking statements relate to future events and anticipated results of operations, business strategies, and other aspects of our operations or operating results. In many cases you can identify forward-looking statements by terminology such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," "objective," "projection," "forecast," "goal," "guidance," "outlook," "effort," “on track,” "target" and other similar words. However, the absence of these words does not mean that the statements are not forward-looking. Where, in any forward-looking statement, the company expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, there can be no assurance that such expectation or belief will result or be achieved. The actual results of operations can and will be affected by a variety of risks and other matters including, but not limited to changes in commodity prices; changes in expected levels of oil and gas reserves or production; operating hazards, drilling risks, 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; changes in international trade relationships, including the imposition of trade restrictions or tariffs relating to crude oil, bitumen, natural gas, LNG, natural gas liquids and any materials or products (such as aluminum and steel) used in the operation of our business; our ability to collect payments when due under our settlement agreement with PDVSA; our ability to liquidate the common stock issued to us by Cenovus Energy Inc. at prices we deem acceptable, or at all; our ability to complete the sale of our announced dispositions or acquisitions on the timeline currently anticipated, if at all; the possibility that regulatory approvals for our announced dispositions or acquisitions 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, acquisitions, or our remaining business; business disruptions during or following our announced dispositions or acquisitions, including the diversion of management time and attention; 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; potential liability resulting 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; and general domestic and international economic and political conditions; as well as changes in tax, environmental and other laws applicable to our business. Other factors that could cause actual results to differ materially from those described in the forward-looking statements include other economic, business, competitive and/or regulatory factors affecting our business generally as set forth in our filings with the Securities and Exchange Commission (SEC). Unless legally required, ConocoPhillips undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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 may use the term "resource" in this news release 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.

Use of Non-GAAP Financial Information – To supplement the presentation of the company’s financial results prepared in accordance with U.S. generally accepted accounting principles (GAAP), this news release and the accompanying supplemental financial information contain certain financial measures that are not prepared in accordance with GAAP, including adjusted earnings (calculated on a consolidated and on a segment-level basis), adjusted earnings per share and cash from operations.


The company believes that the non-GAAP measure adjusted earnings (both on an aggregate and a per share basis) is useful to investors to help facilitate comparisons of the company’s operating performance and controllable costs associated with the company’s core business operations across periods on a consistent basis and with the performance and cost structures of peer companies in a manner that, when viewed in combination with the company’s results prepared in accordance with GAAP, provide a more complete understanding of the factors and trends affecting the company’s business and performance. The company further believes that the non-GAAP measure cash from operations is useful to investors to help understand changes in cash provided by operating activities excluding the impact of working capital changes across periods on a consistent basis and with the performance of peer companies in a manner that, when viewed in combination with the company’s results prepared in accordance with GAAP, provides a more complete understanding of the factors and trends affecting the company’s business and performance. The company’s Board of Directors and management also use these non-GAAP measures to analyze the company’s operating performance across periods when overseeing and managing the company’s business.

Each of the non-GAAP measures included in this news release and the accompanying supplemental financial information has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of the company’s results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, the company’s presentation of non-GAAP measures in this news release and the accompanying supplemental financial information may not be comparable to similarly titled measures disclosed by other companies, including companies in our industry. The company may also change the calculation of any of the non-GAAP measures included in this news release and the accompanying supplemental financial information from time to time in light of its then existing operations to include other adjustments that may impact its operations.

The release also contains the non-GAAP term free cash flow. Free cash flow is cash provided by operating activities excluding operating working capital in excess of capital expenditures and investments. The company believes that free cash flow is useful to investors as it provides measures to compare cash provided by operating activities excluding operating working capital after deduction of capital expenditures and investments across periods on a consistent basis.

Reconciliations of each non-GAAP measure presented in this news release to the most directly comparable financial measure calculated in accordance with GAAP are included in the release.

Other Terms – The release also contains the terms underlying production and production per debt-adjusted share. Underlying production excludes Libya and closed dispositions. Production per debt-adjusted share is calculated on an underlying production basis using ending period debt divided by ending share price plus ending shares outstanding. The company believes that underlying production is useful to investors to compare production excluding Libya and the full impact of closed dispositions on a consistent go-forward basis with peer companies. The company believes that production per debt-adjusted share is useful to investors as it provides a consistent view of production on a total equity basis by converting debt to equity and allows for comparisons across peer companies.

References in the release to earnings refer to net income/(loss) attributable to ConocoPhillips.


                                                                 
                               
ConocoPhillips
Table 1: Reconciliation of earnings to adjusted earnings
$ Millions, Except as Indicated
                                                       
3Q18 3Q17 2018 YTD 2017 YTD
Pre-tax

Income
tax

After-tax

Per share of
common
stock
(dollars)

Pre-tax

Income
tax

After-tax

Per share of
common
stock
(dollars)

Pre-tax

Income
tax

After-tax

Per share of
common
stock
(dollars)

Pre-tax

Income
tax

After-tax

Per share of
common
stock
(dollars)

Earnings $ 1,861 1.59 420 0.34 4,389 3.72 (2,434 ) (1.98 )
Adjustments:
Premiums on early debt retirement - - - - 51 (11 ) 40 0.03 208 (13 ) 195 0.17 285 (60 ) 225 0.18
Unrealized (gain) loss on CVE equity 76 (16 ) 60 0.05 - - - - (195 ) 28 (167 ) (0.14 ) - - - -
Pending claims and settlements (286 ) 7 (279 ) (0.24 ) 9 (21 ) (12 ) (0.01 ) (421 ) 72 (349 ) (0.30 ) 7 (90 ) (83 ) (0.07 )
Impairments 43 (10 ) 33 0.03 2 (1 ) 1 0.00 - 9 9 0.01 6,511 (1,481 ) 5,030 4.09
Pension settlement expense 14 (3 ) 11 0.01 20 (6 ) 14 0.01 161 (29 ) 132 0.11 116 (34 ) 82 0.07
Restructuring 37 (8 ) 29

0.02

3 (1 ) 2 0.00 37 (8 ) 29

0.02

44 (15 ) 29 0.02
Net (gain) loss on asset sales (101 ) 25 (76 ) (0.06 ) (231 ) 78 (153 ) (0.12 ) (151 ) 39 (112 ) (0.09 ) (2,086 ) (441 ) (2,527 ) (2.05 )
Recognition of deferred licensing revenue (44 ) - (44 )

(0.04

) - - - - (104 ) - (104 )

(0.09

) - - - -
Deferred tax adjustment - - - - - - - - - - - - - (37 ) (37 ) (0.03 )
Nova Scotia deepwater exploration exit - - - - - (114 ) (114 ) (0.09 ) - - - - - (114 ) (114 ) (0.09 )
Rig termination   -     -       -     -   -     -     -     -   -     -     -     -   43     (15 )   28     0.02  
Adjusted earnings / (loss)           $ 1,595     1.36           198     0.16           4,022     3.41           199     0.16  
 
The income tax effects of the special items are primarily calculated based on the statutory rate of the jurisdiction in which the discrete item resides.

CONTACT:
ConocoPhillips
Daren Beaudo, 281-293-2073 (media)
daren.beaudo@conocophillips.com
or
Mark Keener, 281-293-5000 (investors)
mark.a.keener@conocophillips.com

Exhibit 99.2
 
    Third-Quarter 2018 Detailed Supplemental Information  
   
2017
   
2018
 
   
1st Qtr
   
2nd Qtr
   
3rd Qtr
   
4th Qtr
   
Full Year
   
1st Qtr
   
2nd Qtr
   
3rd Qtr
 
4th Qtr
 
YTD
 
$ Millions, Except as Indicated
                                                       
CONSOLIDATED INCOME STATEMENT
                                                       
                                                         
Revenues and Other Income
                                                       
  Sales and other operating revenues
   
7,518
     
6,781
     
6,688
     
8,119
     
29,106
     
8,798
     
8,504
     
9,449
       
26,751
 
  Equity in earnings of affiliates
   
200
     
178
     
196
     
198
     
772
     
208
     
265
     
294
       
767
 
  Gain on dispositions
   
22
     
1,876
     
246
     
33
     
2,177
     
7
     
55
     
113
       
175
 
  Other income (loss)
   
31
     
47
     
65
     
386
     
529
     
(52
)
   
416
     
309
       
673
 
    Total Revenues and Other Income
   
7,771
     
8,882
     
7,195
     
8,736
     
32,584
     
8,961
     
9,240
     
10,165
       
28,366
 
                                                                           
Costs and Expenses
                                                                         
  Purchased commodities
   
3,192
     
2,922
     
2,926
     
3,435
     
12,475
     
3,714
     
3,064
     
3,530
       
10,308
 
  Production and operating expenses*
   
1,291
     
1,325
     
1,222
     
1,324
     
5,162
     
1,171
     
1,313
     
1,367
       
3,851
 
  Selling, general and administrative expenses*
   
97
     
95
     
110
     
125
     
427
     
99
     
118
     
119
       
336
 
  Exploration expenses*
   
550
     
97
     
73
     
214
     
934
     
95
     
69
     
103
       
267
 
  Depreciation, depletion and amortization
   
1,979
     
1,625
     
1,608
     
1,633
     
6,845
     
1,412
     
1,438
     
1,494
       
4,344
 
  Impairments
   
175
     
6,294
     
6
     
126
     
6,601
     
12
     
(35
)
   
44
       
21
 
  Taxes other than income taxes
   
231
     
198
     
175
     
205
     
809
     
183
     
273
     
312
       
768
 
  Accretion on discounted liabilities
   
95
     
92
     
89
     
86
     
362
     
88
     
89
     
89
       
266
 
  Interest and debt expense
   
315
     
306
     
251
     
226
     
1,098
     
184
     
177
     
186
       
547
 
  Foreign currency transaction (gains) losses
   
10
     
13
     
5
     
7
     
35
     
30
     
(28
)
   
5
       
7
 
  Other expenses*
   
68
     
276
     
77
     
30
     
451
     
197
     
143
     
10
       
350
 
    Total Costs and Expenses
   
8,003
     
13,243
     
6,542
     
7,411
     
35,199
     
7,185
     
6,621
     
7,259
       
21,065
 
Income (loss) before income taxes
   
(232
)
   
(4,361
)
   
653
     
1,325
     
(2,615
)
   
1,776
     
2,619
     
2,906
       
7,301
 
  Income tax provision (benefit)
   
(831
)
   
(935
)
   
217
     
(273
)
   
(1,822
)
   
876
     
965
     
1,033
       
2,874
 
Net Income (Loss)
   
599
     
(3,426
)
   
436
     
1,598
     
(793
)
   
900
     
1,654
     
1,873
       
4,427
 
Less: net income attributable to noncontrolling interests
   
(13
)
   
(14
)
   
(16
)
   
(19
)
   
(62
)
   
(12
)
   
(14
)
   
(12
)
     
(38
)
Net Income (Loss) Attributable to ConocoPhillips
   
586
     
(3,440
)
   
420
     
1,579
     
(855
)
   
888
     
1,640
     
1,861
       
4,389
 
                                                                           
Net Income (Loss) Attributable to ConocoPhillips
                                                                         
     Per Share of Common Stock (dollars)
                                                                         
  Basic
   
0.47
     
(2.78
)
   
0.35
     
1.32
     
(0.70
)
   
0.75
     
1.40
     
1.60
       
3.74
 
  Diluted
   
0.47
     
(2.78
)
   
0.34
     
1.32
     
(0.70
)
   
0.75
     
1.39
     
1.59
       
3.72
 
                                                                           
Average Common Shares Outstanding (in thousands)**
                                                                         
  Basic
   
1,243,280
     
1,236,831
     
1,212,454
     
1,192,243
     
1,221,038
     
1,179,792
     
1,172,378
     
1,163,033
       
1,171,673
 
  Diluted
   
1,248,722
     
1,236,831
     
1,215,341
     
1,198,276
     
1,221,038
     
1,186,454
     
1,181,167
     
1,172,694
       
1,180,774
 
*2017 has been restated to align with current period financial statements.
**Ending Common Shares Outstanding is 1,151,242 as of Sep. 30, 2018, compared with 1,162,095 as of Jun. 30, 2018.
                                                                           
                                                                           
INCOME (LOSS) BEFORE INCOME TAXES
                                                                         
                                                                           
Alaska
   
6
     
215
     
159
     
396
     
776
     
654
     
531
     
535
       
1,720
 
                                                                           
Lower 48
   
(562
)
   
(4,013
)
   
(148
)
   
(102
)
   
(4,825
)
   
398
     
523
     
660
       
1,581
 
                                                                           
Canada
   
(87
)
   
1,846
     
243
     
(55
)
   
1,947
     
(105
)
   
47
     
49
       
(9
)
                                                                           
Europe and North Africa
   
533
     
276
     
303
     
607
     
1,719
     
771
     
862
     
811
       
2,444
 
                                                                           
Asia Pacific and Middle East
   
392
     
(2,052
)
   
452
     
524
     
(684
)
   
653
     
629
     
815
       
2,097
 
                                                                           
Other International
   
(68
)
   
(11
)
   
(15
)
   
282
     
188
     
(10
)
   
(2
)
   
334
       
322
 
                                                                           
Corporate and Other
   
(446
)
   
(622
)
   
(341
)
   
(327
)
   
(1,736
)
   
(585
)
   
29
     
(298
)
     
(854
)
                                                                           
Consolidated
   
(232
)
   
(4,361
)
   
653
     
1,325
     
(2,615
)
   
1,776
     
2,619
     
2,906
       
7,301
 
                                                                           
                                                                           
                                                                           
                                                                           
EFFECTIVE INCOME TAX RATES
                                                                         
                                                                           
Alaska*
   
295.2
%
   
7.4
%
   
35.3
%
   
-195.8
%
   
-88.7
%
   
19.9
%
   
21.4
%
   
20.1
%
     
20.4
%
                                                                           
Lower 48
   
35.5
%
   
36.8
%
   
34.8
%
   
710.1
%
   
50.9
%
   
22.6
%
   
21.7
%
   
22.2
%
     
22.1
%
                                                                           
Canada
   
1193.9
%
   
25.2
%
   
-14.8
%
   
21.9
%
   
-31.7
%
   
38.4
%
   
29.7
%
   
31.2
%
     
118.4
%
                                                                           
Europe and North Africa
   
67.8
%
   
55.5
%
   
72.0
%
   
71.2
%
   
67.8
%
   
68.3
%
   
66.3
%
   
70.3
%
     
68.3
%
                                                                           
Asia Pacific and Middle East
   
36.6
%
   
-5.2
%
   
8.9
%
   
11.9
%
   
-51.4
%
   
27.6
%
   
23.5
%
   
27.8
%
     
26.5
%
                                                                           
Other International
   
29.6
%
   
14.2
%
   
-27.3
%
   
13.7
%
   
11.3
%
   
-336.7
%
   
-102.3
%
   
5.4
%
     
16.9
%
                                                                           
Corporate and Other
   
22.0
%
   
31.8
%
   
4.2
%
   
-217.2
%
   
-23.0
%
   
7.5
%
   
5.3
%
   
17.3
%
     
11.0
%
                                                                           
Consolidated
   
359.0
%
   
21.4
%
   
33.2
%
   
-20.5
%
   
69.7
%
   
49.3
%
   
36.8
%
   
35.5
%
     
39.4
%
*Alaska including taxes other than income taxes.
   
111.9
%
   
32.2
%
   
56.6
%
   
-142.9
%
   
-32.5
%
   
22.4
%
   
36.1
%
   
37.1
%
     
31.8
%
 

 
   
2017
   
2018
 
   
1st Qtr
   
2nd Qtr
   
3rd Qtr
   
4th Qtr
   
Full Year
   
1st Qtr
   
2nd Qtr
   
3rd Qtr
 
4th Qtr
 
YTD
 
$ Millions
                                                       
EARNINGS BY SEGMENT
                                                       
                                                         
Alaska
   
(11
)
   
199
     
103
     
1,175
     
1,466
     
524
     
418
     
427
       
1,369
 
                                                                           
Lower 48
   
(362
)
   
(2,536
)
   
(97
)
   
624
     
(2,371
)
   
308
     
410
     
513
       
1,231
 
                                                                           
Canada
   
948
     
1,379
     
280
     
(43
)
   
2,564
     
(65
)
   
33
     
34
       
2
 
                                                                           
Europe and North Africa
   
171
     
123
     
85
     
174
     
553
     
245
     
290
     
241
       
776
 
                                                                           
Asia Pacific and Middle East
   
236
     
(2,172
)
   
396
     
442
     
(1,098
)
   
461
     
466
     
577
       
1,504
 
                                                                           
Other International
   
(48
)
   
(9
)
   
(20
)
   
244
     
167
     
(44
)
   
(5
)
   
316
       
267
 
                                                                           
Corporate and Other
   
(348
)
   
(424
)
   
(327
)
   
(1,037
)
   
(2,136
)
   
(541
)
   
28
     
(247
)
     
(760
)
                                                                           
Consolidated
   
586
     
(3,440
)
   
420
     
1,579
     
(855
)
   
888
     
1,640
     
1,861
       
4,389
 
                                                                           
                                                                           
                                                                           
                                                                           
                                                                           
SPECIAL ITEMS
                                                                         
                                                                           
Alaska
   
(110
)
   
32
     
-
     
892
     
814
     
79
     
-
     
-
       
79
 
                                                                           
Lower 48
   
(33
)
   
(2,464
)
   
(40
)
   
610
     
(1,927
)
   
(8
)
   
-
     
(37
)
     
(45
)
                                                                           
Canada
   
977
     
1,366
     
304
     
(5
)
   
2,642
     
-
     
36
     
32
       
68
 
                                                                           
Europe and North Africa
   
-
     
41
     
-
     
12
     
53
     
-
     
32
     
-
       
32
 
                                                                           
Asia Pacific and Middle East
   
-
     
(2,384
)
   
83
     
74
     
(2,227
)
   
-
     
-
     
-
       
-
 
                                                                           
Other International
   
(28
)
   
-
     
-
     
275
     
247
     
(34
)
   
-
     
325
       
291
 
                                                                           
Corporate and Other
   
(43
)
   
(209
)
   
(125
)
   
(819
)
   
(1,196
)
   
(285
)
   
281
     
(54
)
     
(58
)
                                                                           
Consolidated
   
763
     
(3,618
)
   
222
     
1,039
     
(1,594
)
   
(248
)
   
349
     
266
       
367
 
Detailed reconciliation of these items is provided on page 3.
                                                                           
                                                                           
                                                                           
                                                                           
ADJUSTED EARNINGS
                                                                         
                                                                           
Alaska
   
99
     
167
     
103
     
283
     
652
     
445
     
418
     
427
       
1,290
 
                                                                           
Lower 48
   
(329
)
   
(72
)
   
(57
)
   
14
     
(444
)
   
316
     
410
     
550
       
1,276
 
                                                                           
Canada
   
(29
)
   
13
     
(24
)
   
(38
)
   
(78
)
   
(65
)
   
(3
)
   
2
       
(66
)
                                                                           
Europe and North Africa
   
171
     
82
     
85
     
162
     
500
     
245
     
258
     
241
       
744
 
                                                                           
Asia Pacific and Middle East
   
236
     
212
     
313
     
368
     
1,129
     
461
     
466
     
577
       
1,504
 
                                                                           
Other International
   
(20
)
   
(9
)
   
(20
)
   
(31
)
   
(80
)
   
(10
)
   
(5
)
   
(9
)
     
(24
)
                                                                           
Corporate and Other
   
(305
)
   
(215
)
   
(202
)
   
(218
)
   
(940
)
   
(256
)
   
(253
)
   
(193
)
     
(702
)
                                                                           
Consolidated
   
(177
)
   
178
     
198
     
540
     
739
     
1,136
     
1,291
     
1,595
       
4,022
 
                                                                           
                                                                           
                                                                           
                                                                           
                                                                           
ADJUSTED EFFECTIVE INCOME TAX RATES
                                                                         
                                                                           
Alaska
   
44.9
%
   
22.3
%
   
35.3
%
   
28.8
%
   
31.5
%
   
19.5
%
   
21.4
%
   
20.1
%
     
20.3
%
                                                                           
Lower 48
   
35.5
%
   
37.9
%
   
39.2
%
   
28.3
%
   
36.6
%
   
22.5
%
   
21.7
%
   
22.3
%
     
22.2
%
                                                                           
Canada
   
50.9
%
   
-83.2
%
   
34.7
%
   
31.0
%
   
46.0
%
   
38.4
%
   
-1.5
%
   
61.1
%
     
36.6
%
                                                                           
Europe and North Africa
   
67.8
%
   
70.4
%
   
72.0
%
   
71.7
%
   
70.3
%
   
68.3
%
   
68.1
%
   
70.3
%
     
68.9
%
                                                                           
Asia Pacific and Middle East
   
36.6
%
   
31.9
%
   
27.2
%
   
26.0
%
   
29.9
%
   
27.6
%
   
23.5
%
   
27.8
%
     
26.5
%
                                                                           
Other International
   
20.4
%
   
14.2
%
   
-27.3
%
   
16.9
%
   
9.9
%
   
0.7
%
   
-102.3
%
   
17.2
%
     
-1.9
%
                                                                           
Corporate and Other
   
21.1
%
   
39.2
%
   
22.7
%
   
30.4
%
   
28.5
%
   
13.8
%
   
5.8
%
   
11.3
%
     
10.4
%
                                                                           
Consolidated
   
232.5
%
   
45.2
%
   
57.7
%
   
49.5
%
   
61.6
%
   
41.8
%
   
41.2
%
   
39.2
%
     
40.6
%
 

 
   
2017
   
2018
 
$ Millions
 
1st Qtr
   
2nd Qtr
   
3rd Qtr
   
4th Qtr
   
Full Year
   
1st Qtr
   
2nd Qtr
   
3rd Qtr
 
4th Qtr
 
YTD
 
DETAILED SPECIAL ITEMS
                                                       
                                                         
Alaska
                                                       
Impairments
   
(174
)
   
-
     
-
     
-
     
(174
)
   
-
     
-
     
-
       
-
 
Pending claims and settlements
   
-
     
-
     
-
     
-
     
-
     
101
     
-
     
-
       
101
 
Subtotal before income taxes
   
(174
)
   
-
     
-
     
-
     
(174
)
   
101
     
-
     
-
       
101
 
Income tax provision (benefit)1
   
(64
)
   
(32
)
   
-
     
(892
)
   
(988
)
   
22
     
-
     
-
       
22
 
Total
   
(110
)
   
32
     
-
     
892
     
814
     
79
     
-
     
-
       
79
 
                                                                           
Lower 48
                                                                         
Restructuring
   
-
     
(15
)
   
(3
)
   
1
     
(17
)
   
-
     
-
     
(20
)
     
(20
)
Impairments
   
(51
)
   
(3,882
)
   
(2
)
   
(122
)
   
(4,057
)
   
(10
)
   
-
     
(43
)
     
(53
)
Gain (loss) on asset sales
   
-
     
-
     
(50
)
   
-
     
(50
)
   
-
     
-
     
56
       
56
 
Pending claims and settlements
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(41
)
     
(41
)
Subtotal before income taxes
   
(51
)
   
(3,897
)
   
(55
)
   
(121
)
   
(4,124
)
   
(10
)
   
-
     
(48
)
     
(58
)
Income tax provision (benefit)1
   
(18
)
   
(1,433
)
   
(15
)
   
(731
)
   
(2,197
)
   
(2
)
   
-
     
(11
)
     
(13
)
Total
   
(33
)
   
(2,464
)
   
(40
)
   
610
     
(1,927
)
   
(8
)
   
-
     
(37
)
     
(45
)
                                                                           
Canada
                                                                         
Gain (loss) on asset sales
   
-
     
1,855
     
281
     
-
     
2,136
     
-
     
50
     
45
       
95
 
Impairments
   
-
     
(18
)
   
-
     
-
     
(18
)
   
-
     
-
     
-
       
-
 
Restructuring
   
(27
)
   
1
     
-
     
-
     
(26
)
   
-
     
-
     
-
       
-
 
Subtotal before income taxes
   
(27
)
   
1,838
     
281
     
-
     
2,092
     
-
     
50
     
45
       
95
 
Income tax provision (benefit)2
   
(1,004
)
   
472
     
(23
)
   
5
     
(550
)
   
-
     
14
     
13
       
27
 
Total
   
977
     
1,366
     
304
     
(5
)
   
2,642
     
-
     
36
     
32
       
68
 
                                                                           
Europe and North Africa
                                                                         
Impairments
   
-
     
-
     
-
     
33
     
33
     
-
     
53
     
-
       
53
 
Subtotal before income taxes
   
-
     
-
     
-
     
33
     
33
     
-
     
53
     
-
       
53
 
Income tax provision (benefit)3
   
-
     
(41
)
   
-
     
21
     
(20
)
   
-
     
21
     
-
       
21
 
Total
   
-
     
41
     
-
     
12
     
53
     
-
     
32
     
-
       
32
 
                                                                           
Asia Pacific and Middle East
                                                                         
Impairments
   
-
     
(2,384
)
   
-
     
-
     
(2,384
)
   
-
     
-
     
-
       
-
 
Subtotal before income taxes
   
-
     
(2,384
)
   
-
     
-
     
(2,384
)
   
-
     
-
     
-
       
-
 
Income tax provision (benefit)4
   
-
     
-
     
(83
)
   
(74
)
   
(157
)
   
-
     
-
     
-
       
-
 
Total
   
-
     
(2,384
)
   
83
     
74
     
(2,227
)
   
-
     
-
     
-
       
-
 
                                                                           
Other International
                                                                         
Pending claims and settlements
   
-
     
-
     
-
     
320
     
320
     
-
     
-
     
345
       
345
 
Rig termination
   
(43
)
   
-
     
-
     
-
     
(43
)
   
-
     
-
     
-
       
-
 
Subtotal before income taxes
   
(43
)
   
-
     
-
     
320
     
277
     
-
     
-
     
345
       
345
 
Income tax provision (benefit)5
   
(15
)
   
-
     
-
     
45
     
30
     
34
     
-
     
20
       
54
 
Total
   
(28
)
   
-
     
-
     
275
     
247
     
(34
)
   
-
     
325
       
291
 
                                                                           
Corporate and Other
                                                                         
Pension settlement expense
   
(60
)
   
(36
)
   
(20
)
   
(14
)
   
(130
)
   
-
     
(147
)
   
(14
)
     
(161
)
Pending claims and settlements
   
-
     
2
     
(9
)
   
17
     
10
     
34
     
-
     
(18
)
     
16
 
Premiums on early debt retirement
   
-
     
(234
)
   
(51
)
   
(17
)
   
(302
)
   
(206
)
   
(2
)
   
-
       
(208
)
Unrealized gain (loss) on CVE equity
   
-
     
-
     
-
     
-
     
-
     
(116
)
   
387
     
(76
)
     
195
 
Recognition of deferred licensing revenue6
   
-
     
-
     
-
     
-
     
-
     
-
     
60
     
44
       
104
 
Restructuring
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(17
)
     
(17
)
Subtotal before income taxes
   
(60
)
   
(268
)
   
(80
)
   
(14
)
   
(422
)
   
(288
)
   
298
     
(81
)
     
(71
)
Income tax provision (benefit)4
   
(17
)
   
(59
)
   
45
     
805
     
774
     
(3
)
   
17
     
(27
)
     
(13
)
Total
   
(43
)
   
(209
)
   
(125
)
   
(819
)
   
(1,196
)
   
(285
)
   
281
     
(54
)
     
(58
)
                                                                           
Total Company
   
763
     
(3,618
)
   
222
     
1,039
     
(1,594
)
   
(248
)
   
349
     
266
       
367
 
1Includes deferred tax adjustment in 2Q 2017 in Lower 48 and Alaska; pending claims and settlements in 2Q 2017 in Alaska; and 4Q 2017 U.S. Tax Reform.
2Includes tax adjustment related to Canadian disposition in 1Q 2017; tax benefit related to our prior decision to exit Nova Scotia deepwater exploration in 3Q 2017; and 4Q 2017 U.S. Tax Reform.
3Includes pending claims and settlements in 2Q 2017; 4Q 2017 deferred tax adjustment in U.K.; and 4Q 2017 U.S. Tax Reform.
4Includes pending claims and settlements in 3Q 2017 and 4Q 2017 U.S. Tax Reform.
5Includes 4Q 2017 U.S. Tax Reform and 1Q 2018 Nigeria tax settlement.
6Pursuant to adoption of ASC Topic 606 in 2018.
 

 
   
2017
   
2018
 
   
1st Qtr
   
2nd Qtr
   
3rd Qtr
   
4th Qtr
   
Full Year
   
1st Qtr
   
2nd Qtr
   
3rd Qtr
 
4th Qtr
 
YTD
 
$ Millions
                                                       
CASH FLOW INFORMATION
                                                       
                                                         
Cash Flows from Operating Activities
                                                       
  Net income (loss)
   
599
     
(3,426
)
   
436
     
1,598
     
(793
)
   
900
     
1,654
     
1,873
       
4,427
 
  Depreciation, depletion and amortization
   
1,979
     
1,625
     
1,608
     
1,633
     
6,845
     
1,412
     
1,438
     
1,494
       
4,344
 
  Impairments
   
175
     
6,294
     
6
     
126
     
6,601
     
12
     
(35
)
   
44
       
21
 
  Dry hole costs and leasehold impairments
   
406
     
22
     
7
     
131
     
566
     
20
     
16
     
28
       
64
 
  Accretion on discounted liabilities
   
95
     
92
     
89
     
86
     
362
     
88
     
89
     
89
       
266
 
  Deferred taxes
   
(1,314
)
   
(1,234
)
   
(222
)
   
(911
)
   
(3,681
)
   
65
     
197
     
136
       
398
 
  Undistributed equity earnings
   
(43
)
   
(78
)
   
(72
)
   
(39
)
   
(232
)
   
(34
)
   
128
     
(105
)
     
(11
)
  Gain on dispositions
   
(22
)
   
(1,876
)
   
(246
)
   
(33
)
   
(2,177
)
   
(7
)
   
(55
)
   
(113
)
     
(175
)
  Other
   
(47
)
   
222
     
(542
)
   
(62
)
   
(429
)
   
29
     
(267
)
   
15
       
(223
)
  Net working capital changes
   
(38
)
   
110
     
(9
)
   
(48
)
   
15
     
(86
)
   
177
     
(51
)
     
40
 
Net Cash Provided by Operating Activities
   
1,790
     
1,751
     
1,055
     
2,481
     
7,077
     
2,399
     
3,342
     
3,410
       
9,151
 
                                                                           
Cash Flows from Investing Activities
                                                                         
  Capital expenditures and investments
   
(966
)
   
(1,020
)
   
(1,088
)
   
(1,517
)
   
(4,591
)
   
(1,535
)
   
(1,999
)
   
(1,599
)
     
(5,133
)
  Working capital changes associated with investing activities
   
(26
)
   
(87
)
   
95
     
150
     
132
     
28
     
(120
)
   
35
       
(57
)
  Proceeds from asset dispositions
   
35
     
10,707
     
2,998
     
120
     
13,860
     
169
     
139
     
86
       
394
 
  Net sales (purchases) of short-term investments
   
(203
)
   
(2,450
)
   
70
     
793
     
(1,790
)
   
1,593
     
(336
)
   
(261
)
     
996
 
  Long-term collections from (advances to)
                                                                         
  related parties and other investments
   
186
     
47
     
(67
)
   
(15
)
   
151
     
(333
)
   
367
     
101
       
135
 
Net Cash Provided by (Used in) Investing Activities
   
(974
)
   
7,197
     
2,008
     
(469
)
   
7,762
     
(78
)
   
(1,949
)
   
(1,638
)
     
(3,665
)
                                                                           
Cash Flows from Financing Activities
                                                                         
  Repayment of debt
   
(839
)
   
(3,240
)
   
(2,515
)
   
(1,282
)
   
(7,876
)
   
(2,888
)
   
(2,064
)
   
(18
)
     
(4,970
)
  Issuance of company common stock
   
(46
)
   
(17
)
   
(2
)
   
2
     
(63
)
   
(18
)
   
60
     
79
       
121
 
  Repurchase of company common stock
   
(112
)
   
(963
)
   
(970
)
   
(955
)
   
(3,000
)
   
(500
)
   
(646
)
   
(927
)
     
(2,073
)
  Dividends paid
   
(331
)
   
(331
)
   
(324
)
   
(319
)
   
(1,305
)
   
(338
)
   
(337
)
   
(334
)
     
(1,009
)
  Other
   
(16
)
   
(48
)
   
(16
)
   
(32
)
   
(112
)
   
(32
)
   
(16
)
   
(63
)
     
(111
)
Net Cash Provided by (Used in) Financing Activities
   
(1,344
)
   
(4,599
)
   
(3,827
)
   
(2,586
)
   
(12,356
)
   
(3,776
)
   
(3,003
)
   
(1,263
)
     
(8,042
)
                                                                           
Effect of Exchange Rate Changes
   
27
     
76
     
141
     
(12
)
   
232
     
125
     
(139
)
   
(26
)
     
(40
)
                                                                           
Net Change in Cash, Cash Equivalents and Restricted Cash
   
(501
)
   
4,425
     
(623
)
   
(586
)
   
2,715
     
(1,330
)
   
(1,749
)
   
483
       
(2,596
)
Cash, cash equivalents and restricted cash at beginning of period*
   
3,610
     
3,109
     
7,534
     
6,911
     
3,610
     
6,536
     
5,206
     
3,457
       
6,536
 
Cash, Cash Equivalents and Restricted Cash at End of Period
   
3,109
     
7,534
     
6,911
     
6,325
     
6,325
     
5,206
     
3,457
     
3,940
       
3,940
 
*2018 Cash, cash equivalents and restricted cash at beginning of period has been restated to include $211MM of restricted cash.
                                                                           
                                                                           
                                                                           
CAPITAL EXPENDITURES AND INVESTMENTS
                                                                         
                                                                           
 Alaska
   
228
     
229
     
179
     
179
     
815
     
263
     
581
     
190
       
1,034
 
                                                                           
 Lower 48
   
343
     
383
     
508
     
902
     
2,136
     
751
     
889
     
835
       
2,475
 
                                                                           
 Canada
   
62
     
85
     
33
     
22
     
202
     
173
     
45
     
100
       
318
 
                                                                           
 Europe and North Africa
   
200
     
212
     
245
     
215
     
872
     
216
     
246
     
216
       
678
 
                                                                           
 Asia Pacific and Middle East
   
109
     
93
     
114
     
166
     
482
     
99
     
194
     
200
       
493
 
                                                                           
 Other International
   
5
     
5
     
7
     
4
     
21
     
1
     
2
     
3
       
6
 
                                                                           
 Corporate and Other
   
19
     
13
     
2
     
29
     
63
     
32
     
42
     
55
       
129
 
Total Capital Expenditures and Investments
   
966
     
1,020
     
1,088
     
1,517
     
4,591
     
1,535
     
1,999
     
1,599
       
5,133
 
 

 
   
2017
   
2018
 
   
1st Qtr
   
2nd Qtr
   
3rd Qtr
   
4th Qtr
   
Full Year
   
1st Qtr
   
2nd Qtr
   
3rd Qtr
 
4th Qtr
 
YTD
 
TOTAL SEGMENTS
                                                       
                                                         
                                                         
Production
                                                       
  Total (MBOED)
   
1,593
     
1,437
     
1,226
     
1,256
     
1,377
     
1,269
     
1,249
     
1,261
       
1,261
 
                                                                           
Crude Oil (MBD)
                                                                         
  Consolidated operations
   
588
     
576
     
568
     
608
     
585
     
621
     
610
     
622
       
618
 
  Equity affiliates
   
13
     
14
     
14
     
14
     
14
     
15
     
14
     
13
       
14
 
  Total
   
601
     
590
     
582
     
622
     
599
     
636
     
624
     
635
       
632
 
Over (under) lifting of crude oil (MBD)
   
36
     
28
     
11
     
13
     
22
     
15
     
9
     
28
       
17
 
                                                                           
NGL (MBD)
                                                                         
  Consolidated operations
   
127
     
119
     
87
     
84
     
104
     
88
     
95
     
98
       
94
 
  Equity affiliates
   
7
     
8
     
8
     
5
     
7
     
8
     
8
     
8
       
8
 
  Total
   
134
     
127
     
95
     
89
     
111
     
96
     
103
     
106
       
102
 
                                                                           
Bitumen (MBD)
                                                                         
  Consolidated operations
   
52
     
52
     
63
     
67
     
59
     
66
     
63
     
65
       
65
 
  Equity affiliates
   
171
     
85
     
-
     
-
     
63
     
-
     
-
     
-
       
-
 
  Total
   
223
     
137
     
63
     
67
     
122
     
66
     
63
     
65
       
65
 
                                                                           
Natural Gas (MMCFD)
                                                                         
  Consolidated operations
   
2,874
     
2,484
     
1,878
     
1,833
     
2,263
     
1,775
     
1,700
     
1,707
       
1,727
 
  Equity affiliates
   
935
     
1,015
     
1,040
     
1,035
     
1,007
     
1,053
     
1,054
     
1,025
       
1,044
 
  Total
   
3,809
     
3,499
     
2,918
     
2,868
     
3,270
     
2,828
     
2,754
     
2,732
       
2,771
 
                                                                           
Industry Prices
                                                                         
Crude Oil ($/BBL)
                                                                         
  WTI
   
51.83
     
48.24
     
48.16
     
55.35
     
50.90
     
62.88
     
67.99
     
69.71
       
66.86
 
  WCS
   
37.25
     
37.12
     
38.22
     
43.08
     
38.92
     
38.60
     
48.72
     
47.47
       
44.93
 
  Brent dated
   
53.78
     
49.83
     
52.09
     
61.39
     
54.27
     
66.76
     
74.35
     
75.27
       
72.13
 
JCC ($/BBL)
   
47.21
     
54.95
     
53.16
     
49.87
     
51.30
     
58.62
     
66.66
     
71.51
       
65.60
 
Natural Gas ($/MMBTU)
                                                                         
  Henry Hub first of month
   
3.32
     
3.19
     
2.99
     
2.93
     
3.11
     
3.01
     
2.80
     
2.91
       
2.90
 
                                                                           
                                                                           
Average Realized Prices
                                                                         
Crude Oil ($/BBL)
                                                                         
  Consolidated operations
   
50.86
     
48.11
     
49.31
     
58.95
     
51.89
     
65.47
     
70.42
     
72.97
       
69.67
 
  Equity affiliates
   
55.58
     
50.55
     
52.29
     
60.52
     
54.76
     
66.50
     
76.11
     
76.62
       
73.00
 
  Total
   
50.97
     
48.16
     
49.39
     
58.99
     
51.96
     
65.49
     
70.55
     
73.05
       
69.74
 
                                                                           
NGL ($/BBL)
                                                                         
  Consolidated operations
   
23.81
     
19.97
     
22.50
     
32.08
     
24.21
     
26.68
     
28.57
     
33.80
       
29.87
 
  Equity affiliates
   
43.20
     
34.49
     
35.94
     
44.06
     
38.74
     
43.99
     
43.60
     
49.71
       
45.74
 
  Total
   
24.87
     
20.99
     
23.82
     
32.79
     
25.22
     
28.37
     
29.94
     
35.14
       
31.31
 
                                                                           
Bitumen ($/BBL)
                                                                         
  Consolidated operations
   
15.63
     
19.28
     
24.19
     
25.20
     
21.43
     
14.06
     
32.38
     
34.15
       
26.46
 
  Equity affiliates
   
23.63
     
24.19
     
-
     
-
     
23.83
     
-
     
-
     
-
       
-
 
  Total
   
21.56
     
22.42
     
24.19
     
25.20
     
22.66
     
14.06
     
32.38
     
34.15
       
26.46
 
                                                                           
Natural Gas ($/MCF)
                                                                         
  Consolidated operations
   
3.78
     
3.64
     
3.88
     
4.80
     
3.97
     
5.18
     
4.85
     
5.48
       
5.18
 
  Equity affiliates
   
4.00
     
4.29
     
4.51
     
4.25
     
4.27
     
5.04
     
5.72
     
6.35
       
5.70
 
  Total
   
3.84
     
3.83
     
4.11
     
4.59
     
4.07
     
5.13
     
5.18
     
5.81
       
5.37
 
                                                                           
                                                                           
Exploration Expenses ($ Millions)
                                                                         
Dry holes
   
343
     
14
     
(3
)
   
76
     
430
     
15
     
1
     
12
       
28
 
Leasehold impairment
   
63
     
8
     
10
     
55
     
136
     
5
     
15
     
16
       
36
 
Total noncash expenses
   
406
     
22
     
7
     
131
     
566
     
20
     
16
     
28
       
64
 
Other (G&A, G&G and lease rentals)*
   
144
     
75
     
66
     
83
     
368
     
75
     
53
     
75
       
203
 
Total exploration expenses*
   
550
     
97
     
73
     
214
     
934
     
95
     
69
     
103
       
267
 
                                                                           
U.S. exploration expenses*
   
427
     
43
     
38
     
152
     
660
     
66
     
49
     
59
       
174
 
International exploration expenses*
   
123
     
54
     
35
     
62
     
274
     
29
     
20
     
44
       
93
 
*2017 has been restated to align with current period financial statements.
                                                                           
DD&A ($ Millions)
                                                                         
 Alaska
   
234
     
216
     
188
     
208
     
846
     
185
     
182
     
161
       
528
 
 Lower 48
   
819
     
666
     
612
     
627
     
2,724
     
498
     
553
     
603
       
1,654
 
 Canada
   
196
     
70
     
84
     
89
     
439
     
91
     
85
     
89
       
265
 
 Europe and North Africa
   
346
     
318
     
317
     
286
     
1,267
     
285
     
275
     
281
       
841
 
 Asia Pacific and Middle East
   
350
     
321
     
374
     
390
     
1,435
     
327
     
317
     
334
       
978
 
 Other International
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
       
-
 
 Corporate and Other
   
34
     
34
     
33
     
33
     
134
     
26
     
26
     
26
       
78
 
Total DD&A
   
1,979
     
1,625
     
1,608
     
1,633
     
6,845
     
1,412
     
1,438
     
1,494
       
4,344
 
 

 
   
2017
   
2018
 
   
1st Qtr
   
2nd Qtr
   
3rd Qtr
   
4th Qtr
   
Full Year
   
1st Qtr
   
2nd Qtr
   
3rd Qtr
 
4th Qtr
 
YTD
 
PRODUCTION
                                                       
                                                         
                                                         
Crude Oil (MBD)
                                                       
   Alaska
   
175
     
169
     
154
     
173
     
167
     
174
     
170
     
152
       
165
 
   Lower 48
   
176
     
179
     
175
     
191
     
180
     
197
     
218
     
240
       
218
 
   Canada
   
6
     
3
     
1
     
2
     
3
     
2
     
1
     
1
       
1
 
     Norway
   
103
     
99
     
95
     
90
     
97
     
89
     
82
     
89
       
87
 
     United Kingdom
   
28
     
26
     
23
     
24
     
25
     
29
     
23
     
23
       
25
 
     Libya
   
9
     
11
     
23
     
34
     
20
     
40
     
34
     
33
       
35
 
   Europe and North Africa
   
140
     
136
     
141
     
148
     
142
     
158
     
139
     
145
       
147
 
     Australia/Timor-Leste
   
7
     
6
     
6
     
6
     
6
     
4
     
3
     
3
       
4
 
     China
   
41
     
38
     
37
     
35
     
38
     
37
     
29
     
34
       
34
 
     Indonesia
   
2
     
2
     
2
     
2
     
2
     
2
     
2
     
2
       
2
 
     Malaysia
   
41
     
43
     
52
     
51
     
47
     
47
     
48
     
45
       
47
 
     Equity affiliates
   
13
     
14
     
14
     
14
     
14
     
15
     
14
     
13
       
14
 
   AP/ME
   
104
     
103
     
111
     
108
     
107
     
105
     
96
     
97
       
101
 
  Total
   
601
     
590
     
582
     
622
     
599
     
636
     
624
     
635
       
632
 
                                                                           
NGL (MBD)
                                                                         
   Alaska
   
15
     
14
     
11
     
15
     
14
     
16
     
14
     
12
       
14
 
   Lower 48
   
75
     
79
     
64
     
58
     
69
     
60
     
70
     
73
       
68
 
   Canada
   
23
     
13
     
1
     
-
     
9
     
-
     
-
     
2
       
1
 
     Norway
   
4
     
4
     
4
     
4
     
4
     
4
     
4
     
4
       
4
 
     United Kingdom
   
5
     
5
     
3
     
3
     
4
     
4
     
4
     
4
       
4
 
   Europe and North Africa
   
9
     
9
     
7
     
7
     
8
     
8
     
8
     
8
       
8
 
     Australia/Timor-Leste
   
5
     
4
     
4
     
4
     
4
     
4
     
3
     
3
       
3
 
     Equity affiliates
   
7
     
8
     
8
     
5
     
7
     
8
     
8
     
8
       
8
 
   AP/ME
   
12
     
12
     
12
     
9
     
11
     
12
     
11
     
11
       
11
 
  Total
   
134
     
127
     
95
     
89
     
111
     
96
     
103
     
106
       
102
 
                                                                           
Bitumen (MBD)
                                                                         
  Consolidated operations
   
52
     
52
     
63
     
67
     
59
     
66
     
63
     
65
       
65
 
  Equity affiliates
   
171
     
85
     
-
     
-
     
63
     
-
     
-
     
-
       
-
 
  Total
   
223
     
137
     
63
     
67
     
122
     
66
     
63
     
65
       
65
 
                                                                           
Natural Gas (MMCFD)
                                                                         
   Alaska
   
7
     
7
     
5
     
7
     
7
     
7
     
6
     
5
       
6
 
   Lower 48
   
1,116
     
1,142
     
765
     
576
     
898
     
568
     
593
     
608
       
589
 
   Canada
   
488
     
247
     
10
     
12
     
187
     
13
     
14
     
12
       
13
 
     Norway
   
213
     
188
     
193
     
206
     
200
     
208
     
172
     
189
       
190
 
     United Kingdom
   
328
     
284
     
209
     
284
     
276
     
309
     
309
     
238
       
285
 
     Libya
   
3
     
4
     
6
     
20
     
8
     
31
     
26
     
25
       
27
 
   Europe and North Africa
   
544
     
476
     
408
     
510
     
484
     
548
     
507
     
452
       
502
 
     Australia/Timor-Leste
   
284
     
260
     
241
     
286
     
267
     
295
     
241
     
289
       
275
 
     Indonesia
   
327
     
276
     
323
     
305
     
308
     
307
     
305
     
316
       
310
 
     Malaysia
   
108
     
76
     
126
     
137
     
112
     
37
     
34
     
25
       
32
 
     Equity affiliates
   
935
     
1,015
     
1,040
     
1,035
     
1,007
     
1,053
     
1,054
     
1,025
       
1,044
 
   AP/ME
   
1,654
     
1,627
     
1,730
     
1,763
     
1,694
     
1,692
     
1,634
     
1,655
       
1,661
 
  Total
   
3,809
     
3,499
     
2,918
     
2,868
     
3,270
     
2,828
     
2,754
     
2,732
       
2,771
 
                                                                           
Total (MBOED)
                                                                         
   Alaska
   
191
     
184
     
166
     
189
     
182
     
191
     
185
     
165
       
180
 
   Lower 48
   
437
     
448
     
366
     
345
     
399
     
352
     
387
     
414
       
384
 
     Consolidated operations
   
162
     
109
     
67
     
71
     
102
     
70
     
67
     
70
       
69
 
     Equity affiliates
   
171
     
85
     
-
     
-
     
63
     
-
     
-
     
-
       
-
 
   Canada
   
333
     
194
     
67
     
71
     
165
     
70
     
67
     
70
       
69
 
     Norway
   
143
     
134
     
131
     
128
     
134
     
128
     
114
     
125
       
123
 
     United Kingdom
   
88
     
78
     
61
     
75
     
75
     
85
     
78
     
67
       
77
 
     Libya
   
9
     
12
     
24
     
37
     
21
     
45
     
38
     
37
       
40
 
   Europe and North Africa
   
240
     
224
     
216
     
240
     
230
     
258
     
230
     
229
       
240
 
     Australia/Timor-Leste
   
59
     
53
     
50
     
58
     
55
     
57
     
46
     
54
       
53
 
     China
   
41
     
38
     
37
     
35
     
38
     
37
     
29
     
34
       
34
 
     Indonesia
   
57
     
48
     
56
     
52
     
53
     
53
     
53
     
54
       
53
 
     Malaysia
   
59
     
56
     
73
     
74
     
66
     
53
     
54
     
49
       
52
 
     Equity affiliates
   
176
     
192
     
195
     
192
     
189
     
198
     
198
     
192
       
196
 
   AP/ME
   
392
     
387
     
411
     
411
     
401
     
398
     
380
     
383
       
388
 
  Total
   
1,593
     
1,437
     
1,226
     
1,256
     
1,377
     
1,269
     
1,249
     
1,261
       
1,261
 
 

 
   
2017
   
2018
 
   
1st Qtr
   
2nd Qtr
   
3rd Qtr
   
4th Qtr
   
Full Year
   
1st Qtr
   
2nd Qtr
   
3rd Qtr
 
4th Qtr
 
YTD
 
AVERAGE REALIZED PRICES
                                                       
                                                         
                                                         
Crude Oil ($/BBL)
                                                       
  Consolidated operations
                                                       
   Alaska
   
52.09
     
49.95
     
50.53
     
60.68
     
53.33
     
68.31
     
72.49
     
76.47
       
72.44
 
   Lower 48
   
45.89
     
43.38
     
45.29
     
54.27
     
47.36
     
61.99
     
65.79
     
67.73
       
65.38
 
   Canada
   
43.82
     
43.35
     
-
     
-
     
43.69
     
-
     
-
     
-
       
-
 
     Norway
   
54.14
     
51.19
     
51.94
     
62.28
     
54.61
     
65.84
     
73.13
     
77.74
       
72.10
 
     United Kingdom
   
50.09
     
51.72
     
46.88
     
57.63
     
51.85
     
64.27
     
70.97
     
76.51
       
70.08
 
     Libya
   
52.98
     
48.77
     
51.00
     
60.82
     
55.11
     
65.90
     
72.86
     
73.42
       
70.51
 
   Europe and North Africa
   
53.34
     
50.98
     
51.05
     
61.04
     
54.21
     
65.57
     
72.65
     
76.54
       
71.38
 
     Australia/Timor-Leste
   
53.85
     
49.43
     
50.35
     
63.35
     
54.10
     
70.71
     
72.25
     
71.12
       
71.38
 
     China
   
50.31
     
46.00
     
49.09
     
58.07
     
50.91
     
62.49
     
69.51
     
70.71
       
67.31
 
     Indonesia
   
42.45
     
37.44
     
38.89
     
75.00
     
47.09
     
58.60
     
49.93
     
55.16
       
54.50
 
     Malaysia
   
58.13
     
52.64
     
54.66
     
64.54
     
57.59
     
70.42
     
78.42
     
79.32
       
75.86
 
   AP/ME
   
53.74
     
49.28
     
52.06
     
62.09
     
54.38
     
67.07
     
74.88
     
74.78
       
71.98
 
  Total consolidated operations
   
50.86
     
48.11
     
49.31
     
58.95
     
51.89
     
65.47
     
70.42
     
72.97
       
69.67
 
  Equity affiliates
   
55.58
     
50.55
     
52.29
     
60.52
     
54.76
     
66.50
     
76.11
     
76.62
       
73.00
 
  Total
   
50.97
     
48.16
     
49.39
     
58.99
     
51.96
     
65.49
     
70.55
     
73.05
       
69.74
 
                                                                           
NGL ($/BBL)
                                                                         
  Consolidated operations
                                                                         
   Lower 48
   
22.07
     
18.99
     
20.72
     
28.41
     
22.20
     
24.57
     
26.71
     
32.17
       
28.06
 
   Canada
   
21.32
     
20.96
     
-
     
-
     
21.51
     
-
     
-
     
-
       
-
 
     Norway
   
31.77
     
24.24
     
28.86
     
40.56
     
34.14
     
32.58
     
41.12
     
35.57
       
36.90
 
     United Kingdom
   
30.32
     
25.32
     
33.07
     
43.60
     
33.98
     
33.43
     
39.77
     
40.43
       
38.41
 
   Europe and North Africa
   
31.21
     
24.88
     
31.16
     
41.74
     
34.07
     
32.98
     
40.35
     
38.80
       
37.75
 
     Australia/Timor-Leste
   
42.96
     
34.54
     
35.74
     
49.26
     
41.37
     
44.36
     
44.23
     
52.30
       
48.15
 
   AP/ME
   
42.96
     
34.54
     
35.74
     
49.26
     
41.37
     
44.36
     
44.23
     
52.30
       
48.15
 
  Total consolidated operations
   
23.81
     
19.97
     
22.50
     
32.08
     
24.21
     
26.68
     
28.57
     
33.80
       
29.87
 
  Equity affiliates
   
43.20
     
34.49
     
35.94
     
44.06
     
38.74
     
43.99
     
43.60
     
49.71
       
45.74
 
  Total
   
24.87
     
20.99
     
23.82
     
32.79
     
25.22
     
28.37
     
29.94
     
35.14
       
31.31
 
                                                                           
Bitumen ($/BBL)
                                                                         
  Consolidated operations*
   
15.63
     
19.28
     
24.19
     
25.20
     
21.43
     
14.06
     
32.38
     
34.15
       
26.46
 
  Equity affiliates
   
23.63
     
24.19
     
-
     
-
     
23.83
     
-
     
-
     
-
       
-
 
  Total
   
21.56
     
22.42
     
24.19
     
25.20
     
22.66
     
14.06
     
32.38
     
34.15
       
26.46
 
                                                                           
Natural Gas ($/MCF)
                                                                         
  Consolidated operations
                                                                         
   Alaska
   
3.53
     
1.43
     
4.55
     
2.59
     
2.72
     
2.51
     
2.51
     
2.52
       
2.51
 
   Lower 48
   
2.83
     
2.72
     
2.63
     
2.68
     
2.73
     
2.76
     
2.34
     
2.80
       
2.63
 
   Canada
   
1.95
     
2.00
     
-
     
-
     
1.93
     
-
     
-
     
-
       
-
 
     Norway
   
5.52
     
4.87
     
5.00
     
6.59
     
5.54
     
7.32
     
7.19
     
8.23
       
7.63
 
     United Kingdom
   
6.07
     
4.99
     
5.20
     
6.89
     
5.84
     
7.58
     
7.31
     
7.37
       
7.42
 
     Libya
   
-
     
-
     
0.09
     
3.68
     
3.53
     
5.62
     
5.52
     
4.11
       
5.12
 
   Europe and North Africa
   
5.86
     
4.95
     
5.09
     
6.65
     
5.70
     
7.38
     
7.19
     
7.62
       
7.40
 
     Australia/Timor-Leste**
   
0.57
     
0.77
     
0.64
     
0.61
     
0.65
     
0.62
     
0.69
     
1.14
       
0.82
 
     Indonesia
   
6.52
     
6.34
     
5.81
     
6.38
     
6.26
     
6.61
     
6.96
     
7.09
       
6.89
 
     Malaysia
   
2.82
     
3.07
     
3.30
     
3.16
     
3.10
     
2.78
     
3.06
     
3.11
       
2.97
 
   AP/ME
   
4.96
     
5.05
     
4.63
     
5.27
     
4.98
     
5.57
     
5.50
     
6.53
       
5.88
 
  Total consolidated operations
   
3.78
     
3.64
     
3.88
     
4.80
     
3.97
     
5.18
     
4.85
     
5.48
       
5.18
 
  Equity affiliates
   
4.00
     
4.29
     
4.51
     
4.25
     
4.27
     
5.04
     
5.72
     
6.35
       
5.70
 
  Total
   
3.84
     
3.83
     
4.11
     
4.59
     
4.07
     
5.13
     
5.18
     
5.81
       
5.37
 
*2018 average realized prices do not reflect additional value realized through pipeline capacity optimization between Canada and the U.S. Gulf Coast.
**Excludes transfers to Darwin LNG plant.
 


 
 
 
 
 
 
 
 
 
 
 
 
2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
 
 
 
 
 
   
1st Qtr
   
2nd Qtr
   
3rd Qtr
   
4th Qtr
   
Full Year
   
1st Qtr
   
2nd Qtr
   
3rd Qtr
 
4th Qtr
 
YTD
 
CORPORATE AND OTHER
                                                       
                                                         
                                                         
Corporate and Other Earnings (Loss) ($ Millions)
   
(348
)
   
(424
)
   
(327
)
   
(1,037
)
   
(2,136
)
   
(541
)
   
28
     
(247
)
     
(760
)
                                                                           
                                                                           
Detail of Earnings (Loss) ($ Millions)
                                                                         
Net interest expense
   
(253
)
   
(174
)
   
(176
)
   
(136
)
   
(739
)
   
(160
)
   
(174
)
   
(174
)
     
(508
)
Corporate G&A expenses*
   
(51
)
   
(39
)
   
(42
)
   
(61
)
   
(193
)
   
(50
)
   
(53
)
   
(36
)
     
(139
)
Technology**
   
9
     
-
     
20
     
(9
)
   
20
     
(10
)
   
63
     
64
       
117
 
Other*
   
(53
)
   
(211
)
   
(129
)
   
(831
)
   
(1,224
)
   
(321
)
   
192
     
(101
)
     
(230
)
Total
   
(348
)
   
(424
)
   
(327
)
   
(1,037
)
   
(2,136
)
   
(541
)
   
28
     
(247
)
     
(760
)
*2017 has been restated to align with current period financial statements.
**Includes investment in new technologies or businesses outside of our normal scope of operations and licensing revenues.
                                                                           
Before-Tax Net Interest Expense ($ Millions)
                                                                         
Interest expense
   
(340
)
   
(336
)
   
(282
)
   
(259
)
   
(1,217
)
   
(221
)
   
(222
)
   
(236
)
     
(679
)
Capitalized interest
   
25
     
30
     
31
     
33
     
119
     
37
     
45
     
50
       
132
 
Interest revenue
   
11
     
17
     
29
     
43
     
100
     
22
     
15
     
18
       
55
 
Total
   
(304
)
   
(289
)
   
(222
)
   
(183
)
   
(998
)
   
(162
)
   
(162
)
   
(168
)
     
(492
)
                                                                           
Debt
                                                                         
Total debt ($ Millions)
   
26,435
     
23,468
     
21,004
     
19,703
     
19,703
     
17,046
     
14,974
     
14,997
       
14,997
 
Debt-to-capital ratio (%)
   
43
%
   
43
%
   
41
%
   
39
%
   
39
%
   
36
%
   
32
%
   
32
%
     
32
%
                                                                           
Equity ($ Millions)
   
35,601
     
30,499
     
30,712
     
30,801
     
30,801
     
30,718
     
31,222
     
32,079
       
32,079
 
 
 
 
REFERENCE
 
   
Commonly Used Abbreviations
Earnings
Net Income (Loss) Attributable to ConocoPhillips
DD&A
Depreciation, Depletion and Amortization
G&G
Geological and Geophysical
G&A
General and Administrative
JCC
Japan Crude Cocktail
LNG
Liquefied Natural Gas
NGL
Natural Gas Liquids
WCS
Western Canada Select
WTI
West Texas Intermediate
   
   
Units of Measure
 
BBL
Barrels
MMBBL
Millions of Barrels
MBD
Thousands of Barrels per Day
MBOED
Thousands of Barrels of Oil Equivalent per Day
MCF
Thousands of Cubic Feet
MMBTU
Millions of British Thermal Units
MMCFD
Millions of Cubic Feet per Day