ConocoPhillips Announces 2013 Capital Budget of $15.8 Billion and Outlines Investment Programs
ConocoPhillips (NYSE: COP) today announced a 2013 capital budget of
$15.8 billion (including contributions to the FCCL joint venture), which
is approximately flat to expected 2012 capital program spending.
Investments during 2013 will target the company′s diverse portfolio of
global opportunities, with approximately 60 percent of the budget
allocated toward North America and 40 percent toward Europe, Asia
Pacific and other international businesses.
'The 2013 capital budget reflects continued progress toward achieving a
unique combination of growth and returns as an independent E&P company,?
said Ryan Lance, chairman and chief executive officer. 'Similar to 2012,
next year′s investments will be directed predominantly toward
high-quality growth projects and programs that are already in execution
mode, as well as exploration opportunities to build inventory for the
future. We also expect to complete our announced strategic asset
disposition program in 2013. When this program is complete, the
combination of portfolio high-grading and strong ongoing investment
programs will put ConocoPhillips on track to deliver on our long-term
annual growth goals of 3 to 5 percent on both volumes and margins, with
a compelling dividend.?
The budget includes allocations for base maintenance, exploitation,
major project, and exploration and appraisal spending, as well as
corporate expenditures. In addition, the budget reflects assumptions
regarding the timing of asset sales. The actual timing of dispositions
could cause capital to be higher or lower. The key categories of capital
spending are as follows:
Base Maintenance
Approximately 10 percent of the capital budget will be directed toward
maintenance of the company′s high-quality legacy base portfolio.
This includes maintenance activities primarily in Alaska, the Lower
48, western Canada and the North Sea.
Major turnaround activity is expected within the Greater Kuparuk Area,
Greater Ekofisk Area and various fields in the U.K. North Sea.
Exploitation
Approximately 40 percent of the capital budget is allocated to the
company′s highly profitable exploitation programs in its legacy asset
base, which includes 21 million net acres of onshore leasehold in the
Lower 48 and western Canada. A significant portion of this leasehold is
held by production. Growth from these exploitation programs offsets
natural decline from the company′s producing assets.
Approximately two-thirds will be spent in the Lower 48, primarily
focused on liquids-rich unconventional reservoir drilling programs and
infrastructure development in the Eagle Ford, Bakken, Barnett and
Niobrara, as well as conventional and unconventional plays in the
Permian Basin.
The remaining one-third is allocated for other conventional and
unconventional opportunities, mainly in the North Sea, Alaska and
western Canada, with focused drilling on higher-return liquids
opportunities.
North American dry gas plays will continue to receive minimal funding.
Major Projects
Approximately 35 percent of the capital budget is expected to be spent
on the company′s sanctioned major projects, which provide significant
future production growth.
In Canada, development will continue on the FCCL and Surmont oil sands
projects, where the company is employing innovative technology to
improve steam-to-oil ratios and improve returns. Through the company′s
contributions to the FCCL business venture, there will be ongoing
expansion of Foster Creek as phases F, G and H advance, and at
Christina Lake with phases E and F. At Surmont, the focus is on safe
and efficient execution of the Phase II development with continued
investment in the central processing facility, field facility and
drilling activities.
In Europe, spending will focus on continued development of the Eldfisk
II and Ekofisk South expansion projects in the Norwegian North Sea, as
well as the Clair Ridge development and Jasmine Field in the U.K.
sector, with first oil expected from Jasmine in the second half of
2013.
In the Asia Pacific region, capital will primarily be allocated to
several offshore developments in Malaysia, including reaching full
production at the Gumusut-Kakap oil field in late 2013 and
construction at the Kebabangan and Malikai projects. Development will
also continue on the coalbed methane-to-LNG project at the Australia
Pacific LNG joint venture, as field development and infrastructure and
facility construction progresses.
Exploration and Appraisal
Approximately 15 percent of the capital budget is planned for the
company′s worldwide exploration and appraisal program, which targets
acquiring, testing and appraising material opportunities in both
conventional and unconventional plays.
In conventional exploration, activities will include drilling programs
in the deepwater Gulf of Mexico on several non-operated prospects,
including the Shenandoah and Tiber appraisal programs. ConocoPhillips
holds approximately 1.6 million net acres in the Gulf of Mexico, and
was the high bidder in the recent Western Gulf of Mexico lease sale on
an additional 350,000 acres. Internationally, ConocoPhillips plans to
build further on its attractive position in several material deepwater
basins. In Angola, the company is analyzing recent 3-D seismic data
from blocks 36 and 37, and plans to begin drilling in 2014. Appraisal
activities will also continue on the Poseidon discovery in Australia′s
Browse Basin and the Limbayong Field, offshore Malaysia.
In unconventional exploration, funding will support selective acreage
acquisitions and appraisal programs across liquids-rich shale plays in
the Lower 48 and Canada, where the company has added more than 750,000
acres since 2011. Activities are focused on accessing and testing
several high-quality plays, including the Wolfcamp, Niobrara, Canol
and Duvernay. Internationally, the company′s focus is on shale plays
that offer low-cost entry on material positions, such as its Baltic
concessions in Poland, where appraisal drilling will continue in 2013.
In Western Australia, drilling activities will continue in the
frontier Canning Basin shale play.
'Our 2013 capital budget provides funding for the key growth projects
and programs in our portfolio and provides flexibility to capture new
opportunities that may arise,? added Lance. 'The budget supports our
plan to increase value for shareholders through focused capital
investments that deliver growth in production and cash margins, improved
returns on capital, and sector-leading shareholder distributions.?
ConocoPhillips will provide further details on its capital budget and
investment programs at its annual analyst meeting on Feb. 28, 2013 in
New York. Representatives from company management will discuss the
company′s strategic plans for growth and value creation.
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About ConocoPhillips
Headquartered in Houston, Texas, ConocoPhillips had operations and
activities in 30 countries, $115 billion of assets, and approximately
16,700 employees as of Sept. 30, 2012. Production averaged 1.57 million
BOE per day for the nine months ended Sept. 30, 2012, and proved
reserves were 8.4 billion BOE as of Dec. 31, 2011. For more information,
go to www.conocophillips.com.
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'SAFE HARBOR' PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995
This press release contains forward-looking statements.
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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
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resulting from pending or future litigation; limited access to capital
or significantly higher cost of capital related to illiquidity or
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well as changes in tax, environmental and other laws applicable to our
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ConocoPhillips undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
ConocoPhillips
Aftab Ahmed, 281-293-4138 (media)
aftab.ahmed@conocophillips.com
or
Daren
Beaudo, 281-293-2073 (media)
daren.beaudo@conocophillips.com
or
Vladimir
R. dela Cruz, 212-207-1996 (investors)
v.r.delacruz@conocophillips.com
