ConocoPhillips Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>ConocoPhillips submitted its Q1 2024 10-Q, detailing financial positions and operational segments.</b>

AI Summary

CONOCOPHILLIPS (COP) filed a Quarterly Report (10-Q) with the SEC on May 2, 2024. ConocoPhillips filed its 10-Q report for the quarterly period ended March 31, 2024. The filing includes financial data for the period from January 1, 2024, to March 31, 2024. Key financial statement items such as Common Stock, Additional Paid-In Capital, Treasury Stock, Accumulated Other Comprehensive Income, and Retained Earnings are detailed as of March 31, 2024, and December 31, 2023. Information regarding specific debt instruments, including 'Seven Percent Debentures Due Twenty Twenty Nine' and 'A2125 Note Due 2024', is presented. The report references various operational segments and projects, including Surmont, Australia Pacific Aplng, Port Arthur LNG, and QatarEnergy LNG projects.

Why It Matters

For investors and stakeholders tracking CONOCOPHILLIPS, this filing contains several important signals. This 10-Q provides investors with the latest quarterly financial performance and position of ConocoPhillips, crucial for assessing the company's health and strategic direction. The detailed breakdown of equity, debt, and segment information allows for a granular analysis of the company's assets, liabilities, and operational performance in the current reporting period.

Risk Assessment

Risk Level: medium — CONOCOPHILLIPS shows moderate risk based on this filing. The filing is a standard quarterly report (10-Q), which typically contains routine financial information. However, the energy sector is subject to inherent volatility in commodity prices and geopolitical events, which can pose medium risks.

Analyst Insight

Review the detailed financial statements and segment performance in the 10-Q to understand ConocoPhillips' operational efficiency and financial health in Q1 2024.

Key Numbers

• 2024-03-31 — Reporting Period End Date (Conformed period of report)
• 2024-01-01 — Reporting Period Start Date (Reporting period for the 10-Q)
• 2023-12-31 — Prior Year End Date (Comparison date for financial statements)
• 2023-03-31 — Prior Year Period End Date (Comparison date for financial statements)

Key Players & Entities

• ConocoPhillips (company) — Filer of the 10-Q report
• 2024-03-31 (date) — Conformed period of report
• 2024-05-02 (date) — Filed as of date
• Houston (location) — Business address city
• 925 N. Eldridge Parkway (address) — Business address street 1
• 281-293-1000 (phone) — Business phone

FAQ

Industry Context

ConocoPhillips operates in the oil and gas exploration and production industry, a sector characterized by significant capital investment, commodity price volatility, and global supply/demand dynamics.

Regulatory Implications

As a publicly traded company in the energy sector, ConocoPhillips is subject to regulations from the Securities and Exchange Commission (SEC) regarding financial reporting and disclosure.

What Investors Should Do

1. Analyze the balance sheet details for changes in equity and debt from the previous quarter.
2. Examine any disclosures related to specific projects like Surmont or LNG ventures for operational updates.
3. Compare key financial metrics with prior periods to identify trends in performance.

Key Dates

• 2024-03-31: Quarterly Period End — End date for the reported financial period in the 10-Q.
• 2024-05-02: Filing Date — Date the 10-Q report was officially submitted to the SEC.

Year-Over-Year Comparison

This filing represents the first quarterly report (10-Q) for the fiscal year 2024, providing updated financial information compared to the previous year's quarterly filings and the most recent annual report (10-K).

Filing Documents

• cop-20240331.htm (10-Q) — 1292KB
• cop-20240331x10qxexx101.htm (EX-10.1) — 82KB
• cop-20240331x10qxexx102.htm (EX-10.2) — 42KB
• cop-20240331x10qxexx103.htm (EX-10.3) — 42KB
• cop-20240331x10qxexx104.htm (EX-10.4) — 41KB
• cop-20240331x10qexx311.htm (EX-31.1) — 9KB
• cop-20240331x10qexx312.htm (EX-31.2) — 9KB
• cop-20240331x10qexx32.htm (EX-32) — 5KB
• conocophillips_2023xlogo.jpg (GRAPHIC) — 162KB
• conocophillips_2023xlogo2.jpg (GRAPHIC) — 162KB
• conocophillips_2023xlogo3.jpg (GRAPHIC) — 162KB
• conocophillips_2023xlogo4.jpg (GRAPHIC) — 162KB
• cop-20240331_g1.jpg (GRAPHIC) — 162KB
• cop-20240331_g2.jpg (GRAPHIC) — 106KB
• 0001163165-24-000023.txt (&nbsp;) — 9871KB
• cop-20240331.xsd (EX-101.SCH) — 60KB
• cop-20240331_cal.xml (EX-101.CAL) — 90KB
• cop-20240331_def.xml (EX-101.DEF) — 318KB
• cop-20240331_lab.xml (EX-101.LAB) — 741KB
• cop-20240331_pre.xml (EX-101.PRE) — 533KB
• cop-20240331_htm.xml (XML) — 1185KB

—Financial Information

Part I—Financial Information

Financial Statements

Item 1. Financial Statements Consolidated Income Statement 2 Consolidated Statement of Comprehensive Income 3 Consolidated Balance Sheet 4 Consolidated Statement of Cash Flows 5

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 6

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 27

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 49

Controls and Procedures

Item 4. Controls and Procedures 49

—Other Information

Part II—Other Information

Legal Proceedings

Item 1. Legal Proceedings 49

Risk Factors

Item 1A. Risk Factors 49

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 50

Other Information

Item 5. Other Information 50

Exhibit s

Item 6. Exhibit s 51 Signature 52 Commonly Used Abbreviations Table of Contents Commonly Used Abbreviations The following industry-specific, accounting and other terms, and abbreviations may be commonly used in this report. Currencies Accounting $ or USD U.S. dollar ARO asset retirement obligation CAD Canadian dollar ASC accounting standards codification EUR Euro ASU accounting standards update GBP NOK British pound Norwegian kroner DD&A depreciation, depletion and amortization FASB Financial Accounting Standards Board Units of Measurement BBL barrel FIFO first-in, first-out BCF billion cubic feet G&A general and administrative BOE barrel of oil equivalent GAAP generally accepted accounting principles MBD thousands of barrels per day MCF thousand cubic feet LIFO last-in, first-out MM million NPNS normal purchase normal sale MMBOE million barrels of oil equivalent PP&E properties, plants and equipment MBOED thousand barrels of oil equivalent per day VIE variable interest entity MMBOED million barrels of oil equivalent per day MMBTU million British thermal units Miscellaneous MMCFD MTPA million cubic feet per day million tonnes per annum CERCLA Federal Comprehensive Environmental Response Compensation and Liability Act DEI diversity, equity and inclusion Industry EPA Environmental Protection Agency BLM Bureau of Land Management ESG environmental, social and governance CBM coalbed methane EU European Union CCS carbon capture and storage FERC Federal Energy Regulatory Commission E&P exploration and production FEED front-end engineering and design GHG greenhouse gas FID final investment decision HSE health, safety and environment FPS floating production system ICC International Chamber of Commerce FPSO floating production, storage and ICSID World Bank's International offloading Centre for Settlement of G&G geological and geophysical Inv

Financial Statements Table of Contents

Financial Statements Table of Contents

Financial Information

PART I. Financial Information

Financial Statements

Item 1. Financial Statements Consolidated Income Statement ConocoPhillips Millions of Dollars Three Months Ended March 31 2024 2023 Revenues and Other Income Sales and other operating revenues $ 13,848 14,811 Equity in earnings of affiliates 421 499 Gain (loss) on dispositions 93 93 Other income 114 114 Total Revenues and Other Income 14,476 15,517 Costs and Expenses Purchased commodities 5,334 6,138 Production and operating expenses 2,015 1,779 Selling, general and administrative expenses 178 159 Exploration expenses 112 138 Depreciation, depletion and amortization 2,211 1,942 Impairments — 1 Taxes other than income taxes 555 576 Accretion on discounted liabilities 80 68 Interest and debt expense 205 188 Foreign currency transaction (gain) loss ( 18 ) ( 44 ) Other expenses ( 4 ) 10 Total Costs and Expenses 10,668 10,955 Income (loss) before income taxes 3,808 4,562 Income tax provision (benefit) 1,257 1,642 Net Income (Loss) $ 2,551 2,920 Net Income (Loss) Per Share of Common Stock (dollars) Basic $ 2.16 2.38 Diluted 2.15 2.38 Weighted-Average Common Shares Outstanding (in thousands) Basic 1,177,921 1,220,228 Diluted 1,180,320 1,223,355 See Notes to Consolidated Financial Statements. ConocoPhillips 2024 Q1 10-Q 2

Financial Statements

Financial Statements Table of Contents Consolidated Statement of Comprehensive Income ConocoPhillips Millions of Dollars Three Months Ended March 31 2024 2023 Net Income (Loss) $ 2,551 2,920 Other comprehensive income (loss) Defined benefit plans Reclassification adjustment for amortization of prior service cost (credit) included in net income (loss) ( 9 ) ( 9 ) Net change ( 9 ) ( 9 ) Reclassification adjustment for amortization of net actuarial losses (gains) included in net income (loss) 16 23 Net change 16 23 Income taxes on defined benefit plans ( 2 ) ( 3 ) Defined benefit plans, net of tax 5 11 Unrealized holding gain (loss) on securities ( 4 ) 6 Reclassification adjustment for (gain) loss included in net income (loss) — ( 1 ) Income taxes on unrealized holding gain (loss) on securities 1 ( 1 ) Unrealized holding gain (loss) on securities, net of tax ( 3 ) 4 Foreign currency translation adjustments, net of tax ( 230 ) ( 42 ) Unrealized gain (loss) on hedging activities ( 20 ) — Income taxes on unrealized gain (loss) on hedging activities 4 — Unrealized gain (loss) on hedging activities, net of tax ( 16 ) — Other Comprehensive Income (Loss), Net of Tax ( 244 ) ( 27 ) Comprehensive Income (Loss) $ 2,307 2,893 See Notes to Consolidated Financial Statements. 3 ConocoPhillips 2024 Q1 10-Q

Financial Statements Table of Contents

Financial Statements Table of Contents Consolidated Balance Sheet ConocoPhillips Millions of Dollars March 31 2024 December 31 2023 Assets Cash and cash equivalents $ 5,574 5,635 Short-term investments 487 971 Accounts and notes receivable (net of allowance of $ 4 and $ 3 , respectively) 5,444 5,461 Accounts and notes receivable—related parties 14 13 Inventories 1,443 1,398 Prepaid expenses and other current assets 759 852 Total Current Assets 13,721 14,330 Investments and long-term receivables 9,132 9,130 Net properties, plants and equipment (net of accumulated DD&A of $ 75,697 and $ 74,361 , respectively) 69,907 70,044 Other assets 2,588 2,420 Total Assets $ 95,348 95,924 Liabilities Accounts payable $ 5,101 5,083 Accounts payable—related parties 37 34 Short-term debt 1,113 1,074 Accrued income and other taxes 2,116 1,811 Employee benefit obligations 405 774 Other accruals 1,391 1,229 Total Current Liabilities 10,163 10,005 Long-term debt 17,304 17,863 Asset retirement obligations and accrued environmental costs 7,141 7,220 Deferred income taxes 8,776 8,813 Employee benefit obligations 967 1,009 Other liabilities and deferred credits 1,672 1,735 Total Liabilities 46,023 46,645 Equity Common stock ( 2,500,000,000 shares authorized at $ 0.01 par value) Issued (2024— 2,106,777,461 shares; 2023— 2,103,772,516 shares) Par value 21 21 Capital in excess of par 61,300 61,303 Treasury stock (at cost: 2024— 937,243,485 shares; 2023— 925,670,961 shares) ( 66,974 ) ( 65,640 ) Accumulated other comprehensive income (loss) ( 5,917 ) ( 5,673 ) Retained earnings 60,895 59,268 Total Equity 49,325 49,279 Total Liabilities and Equity $ 95,348 95,924 See Notes to Consolidated Financial Statements. ConocoPhillips 2024 Q1 10-Q 4

Financial Statements

Financial Statements Table of Contents Consolidated Statement of Cash Flows ConocoPhillips Millions of Dollars Three Months Ended March 31 2024 2023 Cash Flows From Operating Activities Net income (loss) $ 2,551 2,920 Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation, depletion and amortization 2,211 1,942 Impairments — 1 Dry hole costs and leasehold impairments 19 68 Accretion on discounted liabilities 80 68 Deferred taxes 87 324 Distributions more (less) than income from equity affiliates 308 491 (Gain) loss on dispositions ( 93 ) ( 93 ) Other ( 66 ) ( 35 ) Working capital adjustments Decrease (increase) in accounts and notes receivable ( 76 ) 1,701 Decrease (increase) in inventories ( 55 ) ( 45 ) Decrease (increase) in prepaid expenses and other current assets 74 255 Increase (decrease) in accounts payable ( 85 ) ( 1,266 ) Increase (decrease) in taxes and other accruals 30 ( 928 ) Net Cash Provided by Operating Activities 4,985 5,403 Cash Flows From Investing Activities Capital expenditures and investments ( 2,916 ) ( 2,897 ) Working capital changes associated with investing activities 169 208 Acquisition of businesses, net of cash acquired 49 — Proceeds from asset dispositions 173 188 Net sales (purchases) of investments 405 1,065 Other ( 21 ) ( 12 ) Net Cash Used in Investing Activities ( 2,141 ) ( 1,448 ) Cash Flows From Financing Activities Repayment of debt ( 505 ) ( 43 ) Issuance of company common stock ( 61 ) ( 97 ) Repurchase of company common stock ( 1,325 ) ( 1,700 ) Dividends paid ( 924 ) ( 1,488 ) Other ( 10 ) 2 Net Cash Used in Financing Activities ( 2,825 ) ( 3,326 ) Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash ( 73 ) ( 104 ) Net Change in Cash, Cash Equivalents and Restricted Cash ( 54 ) 525 Cash, cash equivalents and restricted cash at beginning of period 5,899 6,694 Cash, Cash Eq

Notes to Consolidated Financial Statements Table of Contents

Notes to Consolidated Financial Statements Table of Contents

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Note 1—Basis of Presentation The interim-period financial information presented in the financial statements included in this report is unaudited and, in the opinion of management, includes all known accruals and adjustments necessary for a fair presentation of the consolidated financial position of ConocoPhillips, its results of operations and cash flows for such periods. All such adjustments are of a normal and recurring nature unless otherwise disclosed. Certain notes and other information have been condensed or omitted from the interim financial statements included in this report. Therefore, these financial statements should be read in conjunction with the consolidated financial statements and notes included in our 2023 Annual Report on Form 10-K. Note 2—Inventories Millions of Dollars March 31 2024 December 31 2023 Crude oil and natural gas $ 723 676 Materials and supplies 720 722 Total inventories $ 1,443 1,398 Inventories valued on the LIFO basis $ 437 401 Note 3—Acquisitions and Dispositions Surmont Acquisition In October 2023, we completed our acquisition of the remaining 50 percent working interest in Surmont, an asset in our Canada segment, from TotalEnergies EP Canada Ltd. The final consideration for the all-cash transaction was $ 3.0 billion after customary adjustments (CAD $ 4.1 billion): Fair value of consideration Millions of Dollars Cash paid $ 2,635 Contingent consideration 320 Final Consideration $ 2,955 The contingent consideration arrangement requires additional consideration to be paid to TotalEnergies EP Canada Ltd. up to $ 0.4 billion CAD over a five-year term. The contingent payments represent $ 2 million for every dollar that WCS pricing exceeds $ 52 per barrel during the month, subject to certain production targets being achieved. The undiscounted amount we could pay under this arrangement is up to $ 0.3 billion USD. The fair value of the contingent consideration on the

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Table of Contents Recognized amounts of identifiable assets acquired and liabilities assumed Millions of Dollars Oil and gas properties $ 3,082 Asset retirement obligations ( 112 ) Other ( 15 ) Total identifiable net assets $ 2,955 With the completion of the transaction, we have acquired proved and unproved properties of approximately $ 2.9 billion and $ 0.2 billion, respectively. Supplemental Pro Forma (unaudited) The following table summarizes the unaudited supplemental pro forma financial information for the three-month period ending March 31, 2023, as if we had completed the acquisition on January 1, 2022. Millions of Dollars Three Months Ended March 31, 2023 Supplemental Pro Forma (unaudited) As Reported Pro Forma Surmont Pro Forma Combined Total Revenues and Other Income $ 15,517 603 16,120 Income (loss) before income taxes 4,562 70 4,632 Net Income (Loss) 2,920 53 2,973 Earnings per share ($ per share): Basic net income (loss) $ 2.38 2.43 Diluted net income (loss) 2.38 2.42 The unaudited supplemental pro forma financial information is presented for illustration purposes only and is not necessarily indicative of the operating results that would have occurred had the transaction been completed on January 1, 2022, nor is it necessarily indicative of future operating results of the combined entity. The unaudited pro forma financial information for the three-month period ended March 31, 2023, is a result of combining the consolidated income statement of ConocoPhillips with the results of the assets acquired from TotalEnergies EP Canada Ltd. The pro forma results do not include transaction-related costs, nor any cost savings anticipated as a result of the transaction. The pro forma results include adjustments which relate primarily to DD&A, which is based on the unit-of-production method, resulting from the purchase price allocated to oil and gas properties. We believe the estimates and assumptio

Notes to Consolidated Financial Statements Table of Contents

Notes to Consolidated Financial Statements Table of Contents Note 4—Investments and Long-Term Receivables Australia Pacific LNG Pty Ltd. (APLNG) In Australia, we hold a 47.5 percent shareholding interest in APLNG. At March 31, 2024, the outstanding balance of APLNG's debt was $ 4.5 billion under various previously entered facilities. The last principal and interest payment on these facilities is due in September 2030. See Note 8 . At March 31, 2024, the carrying value of our equity method investment in APLNG was approximately $ 5.2 billion. Port Arthur LNG (PALNG) In March 2023, we acquired a 30 percent direct equity investment in PALNG, a joint venture for the development of a large-scale LNG facility. At March 31, 2024, the carrying value of our equity method investment in PALNG was approximately $ 1.3 billion. QatarEnergy LNG Our equity method investments in Qatar include the following: QatarEnergy LNG N(3) (N3)— 30 percent owned joint venture with affiliates of QatarEnergy ( 68.5 percent) and Mitsui & Co., Ltd. ( 1.5 percent)—produces and liquefies natural gas from Qatar's North Field, as well as exports LNG. QatarEnergy LNG NFE(4) (NFE4)— 25 percent owned joint venture with an affiliate of QatarEnergy ( 75 percent)—participant in the North Field East LNG project. QatarEnergy LNG NFS(3) (NFS3)— 25 percent owned joint venture with an affiliate of QatarEnergy ( 75 percent)—participant in the North Field South LNG project. At March 31, 2024, the carrying value of our equity method investments in Qatar was approximately $ 1.1 billion. Note 5—Debt Our debt balance at March 31, 2024 was $ 18.4 billion, compared with $ 18.9 billion at December 31, 2023 . In March 2024, the company retired $ 461 million principal amount of our 2.125 % Notes at maturity. Our revolving credit facility provides a total borrowing capacity of $ 5.5 billion with an expiration date of February 2027. Our revolving credit facility may be used for direct bank borrowings, the is

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Table of Contents Note 6—Changes in Equity Millions of Dollars Common Stock Par Value Capital in Excess of Par Treasury Stock Accum. Other Comprehensive Income (Loss) Retained Earnings Total For the three months ended March 31, 2024 Balances at December 31, 2023 $ 21 61,303 ( 65,640 ) ( 5,673 ) 59,268 49,279 Net income (loss) 2,551 2,551 Other comprehensive income (loss) ( 244 ) ( 244 ) Dividends declared Ordinary ($ 0.58 per common share) ( 687 ) ( 687 ) Variable return of cash ($ 0.20 per common share) ( 237 ) ( 237 ) Repurchase of company common stock ( 1,325 ) ( 1,325 ) Excise tax on share repurchases ( 9 ) ( 9 ) Distributed under benefit plans ( 3 ) ( 3 ) Balances at March 31, 2024 $ 21 61,300 ( 66,974 ) ( 5,917 ) 60,895 49,325 Millions of Dollars Common Stock Par Value Capital in Excess of Par Treasury Stock Accum. Other Comprehensive Income (Loss) Retained Earnings Total For the three months ended March 31, 2023 Balances at December 31, 2022 $ 21 61,142 ( 60,189 ) ( 6,000 ) 53,029 48,003 Net income (loss) 2,920 2,920 Other comprehensive income (loss) ( 27 ) ( 27 ) Dividends declared Ordinary ($ 0.51 per common share) ( 625 ) ( 625 ) Variable return of cash ($ 0.60 per common share) ( 731 ) ( 731 ) Repurchase of company common stock ( 1,700 ) ( 1,700 ) Excise tax on share repurchases ( 15 ) ( 15 ) Distributed under benefit plans ( 42 ) ( 42 ) Balances at March 31, 2023 $ 21 61,100 ( 61,904 ) ( 6,027 ) 54,593 47,783 Note 7—Suspended Wells The capitalized cost of suspended wells at March 31, 2024 was $ 163 million, a decrease of $ 21 million from December 31, 2023. In the first quarter of 2024, after further evaluation, we recognized dry hole expenses of $ 18 million for the suspended Busta discovery well on license PL782S in the North Sea. 9 ConocoPhillips 2024 Q1 10-Q

Notes to Consolidated Financial Statements Table of Contents

Notes to Consolidated Financial Statements Table of Contents Note 8—Guarantees At March 31, 2024, we were liable for certain contingent obligations under various contractual arrangements as described below. We recognize a liability, at inception, for the fair value of our obligation as a guarantor for newly issued or modified guarantees. Unless the carrying amount of the liability is noted below, we have not recognized a liability because the fair value of the obligation is immaterial. In addition, unless otherwise stated, we are not currently performing with any significance under the guarantee and expect future performance to be either immaterial or have only a remote chance of occurrence. APLNG Guarantees At March 31, 2024, we had multiple guarantees outstanding in connection with our 47.5 percent ownership interest in APLNG. The following is a description of the guarantees with values calculated utilizing March 2024 exchange rates: During the third quarter of 2016, we issued a guarantee to facilitate the withdrawal of our pro-rata portion of the funds in a project finance reserve account. We estimate the remaining term of this guarantee to be seven years . Our maximum exposure under this guarantee is approximately $ 210 million and may become payable if an enforcement action is commenced by the project finance lenders against APLNG. At March 31, 2024, the carrying value of this guarantee was approximately $ 14 million. In conjunction with our original purchase of an ownership interest in APLNG from Origin Energy Limited in October 2008, we agreed to reimburse Origin Energy Limited for our share of the existing contingent liability arising under guarantees of an existing obligation of APLNG to deliver natural gas under several sales agreements. The final guarantee expires in the fourth quarter of 2041. Our maximum potential liability for future payments, or cost of volume delivery, under these guarantees is estimated to be $ 680 million ($ 1.1 billion in

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Table of Contents Note 9—Contingencies, Commitments and Accrued Environmental Costs A number of lawsuits invol

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