ConocoPhillips Files Q3 2024 10-Q

TL;DR

ConocoPhillips Q3 2024 10-Q is in. Check financials.

AI Summary

ConocoPhillips filed its 10-Q for the period ending September 30, 2024. The company reported financial results and operational updates. Key financial figures and operational metrics for the third quarter and year-to-date periods of 2024 and 2023 are detailed within the filing.

Why It Matters

This filing provides investors with the latest financial performance and operational details for ConocoPhillips, crucial for understanding the company's current standing in the energy sector.

Risk Assessment

Risk Level: low — This is a routine quarterly financial filing with no immediate red flags.

Key Numbers

• 2024-09-30 — Reporting Period End Date (Indicates the end of the financial quarter being reported.)
• 2024-10-31 — Filing Date (The date the 10-Q was officially submitted to the SEC.)
• 2024 Q3 — Quarter (Specifies the fiscal quarter covered by the report.)

Key Players & Entities

• ConocoPhillips (company) — Filer of the 10-Q
• 2024-09-30 (date) — End of reporting period
• 2024-10-31 (date) — Filing date
• 925 N. ELDRIDGE PARKWAY (address) — Company business address
• HOUSTON (location) — Company city
• DE (location) — State of incorporation

FAQ

Filing Documents

• cop-20240930.htm (10-Q) — 1695KB
• cop-20240930x10qexx311.htm (EX-31.1) — 9KB
• cop-20240930x10qexx312.htm (EX-31.2) — 9KB
• cop-20240930x10qexx32.htm (EX-32) — 5KB
• cop-20240930_g1.jpg (GRAPHIC) — 162KB
• cop-20240930_g2.jpg (GRAPHIC) — 100KB
• 0001163165-24-000052.txt ( ) — 10086KB
• cop-20240930.xsd (EX-101.SCH) — 63KB
• cop-20240930_cal.xml (EX-101.CAL) — 92KB
• cop-20240930_def.xml (EX-101.DEF) — 340KB
• cop-20240930_lab.xml (EX-101.LAB) — 784KB
• cop-20240930_pre.xml (EX-101.PRE) — 565KB
• cop-20240930_htm.xml (XML) — 1506KB

—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 Note 1 —Basis of Presentation 6 Note 2 —Inventories 6 Note 3 —Acquisitions and Dispositions 6 Note 4 —Investments and Long-Term Receivables 8 Note 5 —Debt 9 Note 6 —Changes in Equity 10 Note 7 —Guarantees 11 Note 8 —Contingencies, Commitments and Accrued Environmental Costs 12 Note 9 —Suspended Wells and Exploration Expenses 14 Note 10 —Derivative and Financial Instruments 15 Note 11 —Fair Value Measurement 19 Note 12 —Accumulated Other Comprehensive Income (Loss) 22 Note 13 —Cash Flow Information 22 Note 14 —Employee Benefit Plans 23 Note 15 —Related Party Transactions 23 Note 16 —Sales and Other Operating Revenues 24 Note 17 —Earnings Per Share 25 Note 18 —Segment Disclosures and Related Information 26 Note 19 —Income Taxes 27 Note 20 —Announced Acquisition of Marathon Oil Corporation 28 Note 21 —New Accounting Standards 28

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 29

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 52

Controls and Procedures

Item 4. Controls and Procedures 52

—Other Information

Part II—Other Information

Legal Proceedings

Item 1. Legal Proceedings 52

Risk Factors

Item 1A. Risk Factors 53

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 55

Other Information

Item 5. Other Information 55

Exhibit s

Item 6. Exhibit s 56 Signature 57 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 thousand 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 Investm

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 September 30 Nine Months Ended September 30 2024 2023 2024 2023 Revenues and Other Income Sales and other operating revenues $ 13,041 14,250 40,509 41,412 Equity in earnings of affiliates 441 388 1,265 1,299 Gain (loss) on dispositions ( 2 ) 108 86 200 Other income 124 120 356 356 Total Revenues and Other Income 13,604 14,866 42,216 43,267 Costs and Expenses Purchased commodities 4,747 5,543 14,939 16,297 Production and operating expenses 2,261 1,995 6,440 5,660 Selling, general and administrative expenses 186 169 528 533 Exploration expenses 70 92 284 313 Depreciation, depletion and amortization 2,390 2,095 6,935 6,047 Impairments — 11 34 12 Taxes other than income taxes 476 536 1,567 1,624 Accretion on discounted liabilities 80 68 240 204 Interest and debt expense 189 194 592 561 Foreign currency transaction (gain) loss ( 28 ) 55 ( 37 ) ( 3 ) Other expenses ( 2 ) 8 ( 8 ) ( 5 ) Total Costs and Expenses 10,369 10,766 31,514 31,243 Income (loss) before income taxes 3,235 4,100 10,702 12,024 Income tax provision (benefit) 1,176 1,302 3,763 4,074 Net Income (Loss) $ 2,059 2,798 6,939 7,950 Net Income (Loss) Per Share of Common Stock (dollars) Basic $ 1.77 2.33 5.92 6.56 Diluted 1.76 2.32 5.91 6.54 Weighted-Average Common Shares Outstanding (in thousands) Basic 1,161,318 1,196,641 1,169,350 1,208,018 Diluted 1,163,227 1,199,746 1,171,424 1,211,012 See Notes to Consolidated Financial Statements. ConocoPhillips 2024 Q3 10-Q 2

Financial Statements

Financial Statements Table of Contents Consolidated Statement of Comprehensive Income ConocoPhillips Millions of Dollars Three Months Ended September 30 Nine Months Ended September 30 2024 2023 2024 2023 Net Income (Loss) $ 2,059 2,798 6,939 7,950 Other comprehensive income (loss) Defined benefit plans Reclassification adjustment for amortization of prior service cost (credit) included in net income (loss) ( 10 ) ( 9 ) ( 29 ) ( 28 ) Net change ( 10 ) ( 9 ) ( 29 ) ( 28 ) Reclassification adjustment for amortization of net actuarial losses (gains) included in net income (loss) 16 20 48 62 Net change 16 20 48 62 Income taxes on defined benefit plans ( 1 ) ( 2 ) ( 5 ) ( 8 ) Defined benefit plans, net of tax 5 9 14 26 Unrealized holding gain (loss) on securities 18 — 13 3 Reclassification adjustment for (gain) loss included in net income (loss) ( 1 ) ( 1 ) ( 1 ) ( 3 ) Income taxes on unrealized holding gain (loss) on securities ( 3 ) — ( 2 ) — Unrealized holding gain (loss) on securities, net of tax 14 ( 1 ) 10 — Foreign currency translation adjustments, net of tax 147 ( 80 ) ( 156 ) ( 23 ) Unrealized gain (loss) on hedging activities ( 63 ) 46 ( 50 ) 46 Income taxes on unrealized gain (loss) on hedging activities 13 ( 10 ) 10 ( 10 ) Unrealized gain (loss) on hedging activities, net of tax ( 50 ) 36 ( 40 ) 36 Other Comprehensive Income (Loss), Net of Tax 116 ( 36 ) ( 172 ) 39 Comprehensive Income (Loss) $ 2,175 2,762 6,767 7,989 See Notes to Consolidated Financial Statements. 3 ConocoPhillips 2024 Q3 10-Q

Financial Statements Table of Contents

Financial Statements Table of Contents Consolidated Balance Sheet ConocoPhillips Millions of Dollars September 30 2024 December 31 2023 Assets Cash and cash equivalents $ 5,221 5,635 Short-term investments 1,571 971 Accounts and notes receivable (net of allowance of $ 4 and $ 3 , respectively) 4,791 5,461 Accounts and notes receivable—related parties 24 13 Inventories 1,496 1,398 Prepaid expenses and other current assets 881 852 Total Current Assets 13,984 14,330 Investments and long-term receivables 9,192 9,130 Net properties, plants and equipment (net of accumulated DD&A of $ 79,484 and $ 74,361 , respectively) 70,725 70,044 Other assets 2,798 2,420 Total Assets $ 96,699 95,924 Liabilities Accounts payable $ 5,161 5,083 Accounts payable—related parties 29 34 Short-term debt 1,314 1,074 Accrued income and other taxes 2,473 1,811 Employee benefit obligations 627 774 Other accruals 1,161 1,229 Total Current Liabilities 10,765 10,005 Long-term debt 16,990 17,863 Asset retirement obligations and accrued environmental costs 7,337 7,220 Deferred income taxes 8,986 8,813 Employee benefit obligations 945 1,009 Other liabilities and deferred credits 1,795 1,735 Total Liabilities 46,818 46,645 Equity Common stock ( 2,500,000,000 shares authorized at $ 0.01 par value) Issued (2024— 2,107,349,949 shares; 2023— 2,103,772,516 shares) Par value 21 21 Capital in excess of par 61,430 61,303 Treasury stock (at cost: 2024— 956,437,471 shares; 2023— 925,670,961 shares) ( 69,184 ) ( 65,640 ) Accumulated other comprehensive income (loss) ( 5,845 ) ( 5,673 ) Retained earnings 63,459 59,268 Total Equity 49,881 49,279 Total Liabilities and Equity $ 96,699 95,924 See Notes to Consolidated Financial Statements. ConocoPhillips 2024 Q3 10-Q 4

Financial Statements

Financial Statements Table of Contents Consolidated Statement of Cash Flows ConocoPhillips Millions of Dollars Nine Months Ended September 30 2024 2023 Cash Flows From Operating Activities Net income (loss) $ 6,939 7,950 Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation, depletion and amortization 6,935 6,047 Impairments 34 12 Dry hole costs and leasehold impairments 48 151 Accretion on discounted liabilities 240 204 Deferred taxes 249 753 Distributions more (less) than income from equity affiliates 545 920 (Gain) loss on dispositions ( 86 ) ( 200 ) Other ( 18 ) 16 Working capital adjustments Decrease (increase) in accounts and notes receivable 656 1,147 Decrease (increase) in inventories ( 100 ) ( 114 ) Decrease (increase) in prepaid expenses and other current assets ( 53 ) 486 Increase (decrease) in accounts payable ( 117 ) ( 837 ) Increase (decrease) in taxes and other accruals 395 ( 1,833 ) Net Cash Provided by Operating Activities 15,667 14,702 Cash Flows From Investing Activities Capital expenditures and investments ( 8,801 ) ( 8,365 ) Working capital changes associated with investing activities 195 ( 175 ) Acquisition of businesses, net of cash acquired 49 — Proceeds from asset dispositions 217 613 Net sales (purchases) of investments ( 599 ) 1,860 Other ( 11 ) ( 81 ) Net Cash Used in Investing Activities ( 8,950 ) ( 6,148 ) Cash Flows From Financing Activities Issuance of debt — 3,787 Repayment of debt ( 607 ) ( 1,243 ) Issuance of company common stock ( 66 ) ( 57 ) Repurchase of company common stock ( 3,513 ) ( 4,300 ) Dividends paid ( 2,749 ) ( 4,175 ) Other ( 131 ) ( 34 ) Net Cash Used in Financing Activities ( 7,066 ) ( 6,022 ) Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash ( 28 ) ( 150 ) Net Change in Cash, Cash Equivalents and Restricted Cash ( 377 ) 2,382 Cash, cash equivalents and rest

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 September 30 2024 December 31 2023 Crude oil and natural gas $ 759 676 Materials and supplies 737 722 Total inventories $ 1,496 1,398 Inventories valued on the LIFO basis $ 424 401 Note 3—Acquisitions and Dispositions Marathon Oil Corporation Announced Acquisition For discussion regarding our announced acquisition of Marathon Oil Corporation (Marathon Oil), see Note 20 . Alaska Announced Acquisition In October 2024, after exercising our preferential rights, we signed a purchase and sale agreement for approximately $ 300 million, subject to customary adjustments, to increase our working interest by approximately 5 percent in the Kuparuk River Unit and approximately 0.4 percent in the Prudhoe Bay Unit from Chevron U.S.A. Inc. and Union Oil Company of California. Our updated working interest in the Kuparuk River Unit will vary from 94 to 99 percent inclusive of satellites and for the Prudhoe Bay Unit will be approximately 36.5 percent. The transaction is expected to close in the fourth quarter of 2024. Surmont Acquisition In October 2023, we completed our acquisition of the remaining 50 percent working interest in

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Table of Contents The transaction was accounted for as a business combination under FASB ASC Topic 805 using the acquisition method, which requires assets acquired and liabilities assumed to be measured at their acquisition date fair values. By the end of the first quarter of 2024, we finalized the allocation of the purchase price to specific assets and liabilities. It was based on the fair value of final consideration and the conclusion of the fair value determination of long-lived assets and all other assets acquired and liabilities assumed. Oil and gas properties were valued using a discounted cash flow approach incorporating market participant and internally generated price assumptions, production profiles and operating and development cost assumptions. The fair values of other assets acquired and liabilities assumed, which included accounts receivable, accounts payable, and most other current assets and current liabilities, were determined to be equivalent to the carrying value due to their short-term nature. The total consideration of $ 3.0 billion was allocated to the identifiable assets and liabilities based on fair values as of the acquisition date of October 4, 2023. 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- and nine-month periods ended September 30, 2023, as if we had completed the acquisition on January 1, 2022. Millions of Dollars Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023 Supplemental Pro Forma (unau

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 September 30, 2024, the outstanding balance of APLNG's debt was $ 4.0 billion under various previously entered facilities. The last principal and interest payment on these facilities is due in September 2030. See Note 7 . At September 30, 2024, the carrying value of our equity method investment in APLNG was approximately $ 5.0 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 September 30, 2024, the carrying value of our equity method investment in PALNG was approximately $ 1.5 billion. Qatar LNG Projects Our equity method investments in Qatar include the following: QatarEnergy LNG N(3) (N3)— 30 percent owned joint venture with an affiliate 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 affiliates of QatarEnergy ( 70 percent) and China National Petroleum Corporation ( 5 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 September 30, 2024, the carrying value of our equity method investments in Qatar was approximately $ 1.2 billion. During the second quarter of 2024, we were notified that an affiliate of QatarEnergy transferred a 5 percent joint venture interest in NFE4 to an affiliate of China National Petroleum Corporation. As a result, we have concluded NFE4 is a VIE and we are not the primary beneficiary of the VIE because we do not have the power to direct the activities

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Table of Contents Note 5—Debt Our debt balance at September 30, 2024 was $ 18.3 billion, compared with $ 18.9 billion at December 31, 2023 . In the first quarter of 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 issuance of letters of credit totaling up to $ 500 million, or as support for our commercial paper program. The revolving credit facility is broadly syndicated among financial institutions and does not contain any material adverse change provisions or any covenants requiring maintenance of specified financial ratios or credit ratings. The facility agreement contains a cross-default provision relating to the failure to pay principal or interest on other debt obligations of $ 200 million or more by ConocoPhillips, or any of its consolidated subsidiaries. The amount of the facility is not subject to redetermination prior to its expiration date. Credit facility borrowings may bear interest at a margin above the Secured Overnight Financing Rate (SOFR). The facility agreement calls for commitment fees on available, but unused, amounts. The facility agreement also contains early termination rights if our current directors or their approved successors cease to be a majority of the Board of Directors. The revolving credit facility supports our ability to issue up to $ 5.5 billion of commercial paper. Commercial paper is generally limited to maturities of 90 days and is included in short-term debt on our consolidated balance sheet. With no commercial paper outstanding and no direct borrowings or letters of credit, we had access to $ 5.5 billion in available borrowing capacity under our revolving credit facility at September 30, 2024, and at December 31, 2023. We do not have a

Notes to Consolidated Financial Statements Table of Contents

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 September 30, 2024 Balances at June 30, 2024 $ 21 61,381 ( 68,005 ) ( 5,961 ) 62,309 49,745 Net income (loss) 2,059 2,059 Other comprehensive income (loss) 116 116 Dividends declared Ordinary ($ 0.58 per common share) ( 677 ) ( 677 ) Variable return of cash ($ 0.20 per common share) ( 233 ) ( 233 ) Repurchase of company common stock ( 1,168 ) ( 1,168 ) Excise tax on share repurchases ( 11 ) ( 11 ) Distributed under benefit plans 49 49 Other 1 1 Balances at September 30, 2024 $ 21 61,430 ( 69,184 ) ( 5,845 ) 63,459 49,881 For the nine months ended September 30, 2024 Balances at December 31, 2023 $ 21 61,303 ( 65,640 ) ( 5,673 ) 59,268 49,279 Net income (loss) 6,939 6,939 Other comprehensive income (loss) ( 172 ) ( 172 ) Dividends declared Ordinary ($ 1.74 per common share) ( 2,045 ) ( 2,045 ) Variable return of cash ($ 0.60 per common share) ( 704 ) ( 704 ) Repurchase of company common stock ( 3,513 ) ( 3,513 ) Excise tax on share repurchases ( 31 ) ( 31 ) Distributed under benefit plans 127 127 Other 1 1 Balances at September 30, 2024 $ 21 61,430 ( 69,184 ) ( 5,845 ) 63,459 49,881 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 September 30, 2023 Balances at June 30, 2023 $ 21 61,169 ( 63,217 ) ( 5,925 ) 55,483 47,531 Net income (loss) 2,798 2,798 Other comprehensive income (loss) ( 36 ) ( 36 ) Dividends declared Ordinary ($ 0.51 per common share) ( 613 ) ( 613 ) Variable return of cash ($ 0.60 per common share) ( 717 ) ( 717 ) Repurchase of company common stock ( 1,300 ) ( 1,300 ) Excise tax on s

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Table of Contents Note 7—Guarantees At September 30, 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 September 30, 2024, we had multiple guarantees outstanding in connection with our 47.5 percent ownership interest in APLNG. The following is a description of the guarante

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