ConocoPhillips (NYSE:COP) Q4 2022 Earnings Call Transcript

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Neal Dingmann: Good morning. Thanks for the time. My question is around just production and maybe around the Permian. I am just trying to get a sense of, you have got I think the 1% to 4% type overall growth. So, I am just trying to get a sense of expectations for the Permian, if you would back out obviously, what’s going on up in Alaska. Have you all clarified or kind of said what the expectation is at. And it sounds like €“ second part of that, it sounds like it’s going to be pretty that growth you expect in the Permian, I assume that would be pretty linear for the entire year, if you could comment on those two things.

Nick Olds: Yes. Neal, this is Nick. Again, for the Lower 48, we will deliver production growth in that mid-single digits. And again, the majority of that growth is going to be weighted to the Permian. With respect to the profile shape, it’s going to be more of mid to back-end weighted. So, we have got some operated larger pads that are going to be coming on kind of the mid-year to third quarter. And then we have got a modest operated by other growth going through the year with more on the kind of the back end for Lower 48. Does that help?

Neal Dingmann: That’s very clear. And then just one last one. You all are obviously in a fantastic position financially. You have done some really positive M&A deals in the past. I think actually in the last couple of years among the best that I have seen out there. My question that comes in, I mean how do you view the landscape today? I mean obviously, prices are up, maybe commodity prices are up, so maybe expectations are higher, but just wondering overall, how do you view the M&A landscape?

Ryan Lance: Yes. Thanks Neal. I mean we are in the market every day. We are trading. We are thinking about the market, we see what’s going on every day. We think generally, there is more consolidation that’s needed in our business. It’s pretty tough that these kinds of elevated prices, but we watch it every day. I think it €“ we have been pretty clear and consistent about our financial framework and how we think about M&A. That has not changed. So, as we think about cost of supply, we think about assets that we can make better or can make our company better or improve our long-term plan, we know the assets that we like. And so we watch those constantly. But it’s a tougher market at these kinds of prices to transact. And some of the transactions that have occurred this year, we have looked at them. We have seen them. We have watched them. They just don’t feel our framework. So, they don’t make us a better company.

Neal Dingmann: That’s very clear. Thank you all.

Phil Gresh: Next question.

Operator: Our next question comes from Paul Sankey with Sankey Research. Your line is now open.

Paul Sankey: Hi everyone and thanks as always, for the great disclosure. In fact, you guys have been leaders in the industry in many ways, starting with really the first capital discipline, cash return framework. You are in a position to make acquisitions at the bottom of the cycle. And now you are saying that you are leaning in is the word, Ryan €“ words to sort of mega project development using an $85 oil price assumption. Is this an indication that the industry is going to have to follow you, or is it more that these major opportunities have come up in 2023? And further to the $85 price assumption, could you just remind me what gas price assumption you are using? And what would you cut if oil prices went to, say, $60 over the course of the year? Thanks.

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