ConocoPhillips Q3 Net Income Dips Amid Revenue Growth, Marathon Oil Integration

Ticker: COP · Form: 10-Q · Filed: 2025-11-06T00:00:00.000Z

Sentiment: mixed

Topics: Oil & Gas, Exploration & Production, Mergers & Acquisitions, Asset Divestitures, LNG, Financial Performance, Energy Sector

Related Tickers: COP, MRO, SHEL

TL;DR

**COP's Q3 net income drop is a red flag, signaling that the Marathon Oil acquisition and asset sales haven't immediately translated to bottom-line growth, making it a 'wait and see' for now.**

AI Summary

ConocoPhillips reported a net income of $1.726 billion for the three months ended September 30, 2025, a decrease from $2.059 billion in the same period of 2024. Sales and other operating revenues increased to $15.031 billion in Q3 2025 from $13.041 billion in Q3 2024. For the nine months ended September 30, 2025, net income was $6.546 billion, down from $6.939 billion in 2024, despite revenues rising to $45.552 billion from $40.509 billion. Key business changes include the November 2024 acquisition of Marathon Oil Corporation for $16.5 billion, adding $24.232 billion in net properties, plants and equipment. The company also divested noncore Lower 48 assets for $581 million and Ursa/Europa fields for $718 million in Q1 and Q2 2025, respectively, recognizing significant gains. Total costs and expenses rose to $12.594 billion in Q3 2025 from $10.369 billion in Q3 2024, driven by increased purchased commodities and DD&A. Strategic outlook includes further noncore asset dispositions totaling approximately $0.5 billion in Q4 2025 and continued investment in LNG projects like APLNG, PALNG, and Qatar LNG.

Why It Matters

This 10-Q reveals ConocoPhillips' strategic pivot post-Marathon Oil acquisition, emphasizing portfolio optimization through significant divestitures. For investors, the dip in net income despite revenue growth, coupled with increased costs, signals potential integration challenges or a shift in operational focus. Employees of acquired entities face ongoing integration, while customers may see supply chain adjustments. The broader market will watch how COP's expanded Lower 48 footprint impacts competitive dynamics, especially with its continued investment in major LNG projects like APLNG and PALNG, positioning it for long-term natural gas market influence.

Risk Assessment

Risk Level: medium — The company's net income decreased by $333 million (16.2%) in Q3 2025 compared to Q3 2024, and by $393 million (5.7%) for the nine months ended September 30, 2025, despite higher revenues. This indicates potential margin compression or increased operational costs, such as the $2.225 billion increase in purchased commodities for the nine-month period. The ongoing integration of Marathon Oil and the significant transaction-related costs of $587 million to date also present execution risks.

Analyst Insight

Investors should closely monitor ConocoPhillips' Q4 results for signs of improved profitability and successful integration of Marathon Oil. The company's strategic divestitures are positive for portfolio optimization, but the impact on net income needs to stabilize. Consider holding, but be prepared to re-evaluate if cost increases continue to outpace revenue growth.

Financial Highlights

debt To Equity
0.36
revenue
$15,031M
operating Margin
16.1%
total Assets
$122,472M
total Debt
$23,500M
net Income
$1,726M
eps
$1.38
gross Margin
60.7%
cash Position
$5,260M
revenue Growth
+15.3%

Revenue Breakdown

SegmentRevenueGrowth
Sales and other operating revenues$15,031M+15.3%
Equity in earnings of affiliates$345M-21.8%
Gain (loss) on dispositions$3MN/A
Other income$143M+15.3%

Key Numbers

Key Players & Entities

FAQ

How did ConocoPhillips' net income change in Q3 2025 compared to the previous year?

ConocoPhillips' net income for the three months ended September 30, 2025, was $1.726 billion, a decrease from $2.059 billion reported in the same period of 2024.

What was the total value of ConocoPhillips' acquisition of Marathon Oil Corporation?

The acquisition of Marathon Oil Corporation, completed in November 2024, was valued at $16.5 billion, primarily through the exchange of ConocoPhillips common stock.

What were ConocoPhillips' total revenues and other income for the nine months ended September 30, 2025?

For the nine months ended September 30, 2025, ConocoPhillips reported total revenues and other income of $47.363 billion, an increase from $42.216 billion in the same period of 2024.

What significant asset dispositions did ConocoPhillips complete in 2025?

In Q1 2025, ConocoPhillips sold noncore Lower 48 assets for $581 million. In Q2 2025, it sold interests in the Ursa and Europa fields for $718 million, recognizing a $274 million pre-tax gain.

What is the current risk level associated with ConocoPhillips' financial performance based on this 10-Q?

The risk level is medium, primarily due to a decrease in net income despite revenue growth, indicating potential margin pressures or increased operational costs, and the ongoing integration risks of the Marathon Oil acquisition.

How much common stock did ConocoPhillips have outstanding at September 30, 2025?

ConocoPhillips had 1,235,718,250 shares of common stock, $.01 par value, outstanding at September 30, 2025.

What is ConocoPhillips' strategy regarding noncore assets?

ConocoPhillips is actively divesting noncore assets, as evidenced by the sale of Lower 48 assets for $581 million and the Ursa/Europa fields for $718 million, with an additional $1.3 billion Anadarko basin divestment closing in October 2025.

What was the impact of the Marathon Oil acquisition on ConocoPhillips' assets?

The Marathon Oil acquisition added $26.672 billion in total assets, including $24.232 billion in net properties, plants and equipment, with $13 billion in proved properties and $11 billion in unproved properties.

What are ConocoPhillips' key equity method investments?

ConocoPhillips holds significant equity method investments in Australia Pacific LNG (APLNG) with a carrying value of $4.8 billion, Port Arthur LNG (PALNG) at $1.6 billion, and various Qatar LNG projects also valued at approximately $1.6 billion.

What is the significance of the increase in purchased commodities for ConocoPhillips?

The increase in purchased commodities to $17.130 billion for the nine months ended September 30, 2025, from $14.939 billion in the prior year, indicates higher input costs which contributed to the decrease in net income despite higher sales.

Risk Factors

Industry Context

The oil and gas industry is characterized by high capital intensity, cyclical commodity prices, and increasing regulatory scrutiny. ConocoPhillips operates in a competitive landscape with major integrated oil companies and independent producers. Trends include a focus on cost efficiency, portfolio optimization through acquisitions and divestitures, and strategic investments in lower-carbon energy solutions and LNG projects.

Regulatory Implications

ConocoPhillips faces evolving environmental regulations related to emissions, flaring, and methane. Compliance requires ongoing investment and operational adjustments. The company's significant asset retirement obligations also highlight the long-term financial impact of environmental stewardship and decommissioning responsibilities.

What Investors Should Do

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Key Dates

Glossary

DD&A
Depreciation, Depletion, and Amortization. This represents the systematic allocation of the cost of natural resources and related assets over their useful lives. (A significant non-cash expense that impacts profitability and is a key driver of the increase in total costs and expenses.)
Equity in earnings of affiliates
The portion of the net income or loss of associated companies (in which the company has significant influence but not control) that is recognized in the parent company's income statement. (Reflects the company's share of profits from joint ventures and other investments, which decreased in Q3 2025.)
Acquisition Method
An accounting standard (ASC 805) used to account for business combinations, requiring assets acquired and liabilities assumed to be recorded at their fair values on the acquisition date. (The method used for the Marathon Oil acquisition, impacting the valuation of acquired assets and liabilities.)
LIFO
Last-In, First-Out. An inventory valuation method where the last items added to inventory are assumed to be the first ones sold. (Used for a portion of ConocoPhillips' inventories, impacting the cost of goods sold and reported inventory values.)
Asset Retirement Obligations
The costs associated with the retirement of tangible long-lived assets, such as offshore platforms or wells, at the end of their useful lives. (A significant liability for the company, reflecting future decommissioning costs, which increased slightly.)

Year-Over-Year Comparison

Compared to the prior year, ConocoPhillips reported a decrease in net income for both the three and nine months ended September 30, 2025, despite a notable increase in sales and other operating revenues. This margin compression was driven by higher purchased commodities and depreciation, depletion, and amortization expenses. The company has significantly expanded its asset base through the acquisition of Marathon Oil, which is expected to impact future revenue and cost structures, while also actively divesting noncore assets to optimize its portfolio.

Filing Stats: 4,625 words · 19 min read · ~15 pages · Grade level 15.2 · Accepted 2025-11-06 07:34:08

Filing Documents

—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 9 Note 5 —Debt 9 Note 6 —Suspended Wells and Exploration Expenses 10 Note 7 —Changes in Equity 11 Note 8 —Guarantees 12 Note 9 —Contingencies, Commitments and Accrued Environmental Costs 13 Note 10 —Derivative and Financial Instruments 16 Note 11 —Fair Value Measurement 20 Note 12 —Accumulated Other Comprehensive Income (Loss) 22 Note 13 —Cash Flow Information 23 Note 14 —Related Party Transactions 23 Note 15 —Employee Benefit Plans 24 Note 16 —Sales and Other Operating Revenues 25 Note 17 —Earnings Per Share 26 Note 18 —Segment Disclosures and Related Information 26 Note 19 —Income Taxes 32 Note 20 —New Accounting Standards 32

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 33

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 55

Controls and Procedures

Item 4. Controls and Procedures 55

—Other Information

Part II—Other Information

Legal Proceedings

Item 1. Legal Proceedings 55

Risk Factors

Item 1A. Risk Factors 55

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 56

Other Information

Item 5. Other Information 56

Exhibit s

Item 6. Exhibit s 57 Signature 58 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 EPS earnings per share Units of Measurement FASB Financial Accounting Standards Board BBL barrel BCF billion cubic feet FIFO first-in, first-out BOE barrel of oil equivalent G&A general and administrative MBD thousand barrels per day GAAP generally accepted accounting principles MCF thousand cubic feet MM million LIFO last-in, first-out MMBOE million barrels of oil equivalent NPNS normal purchase normal sale MBOED thousand barrels of oil equivalent per PP&E properties, plants and equipment day VIE variable interest entity MMBOED million barrels of oil equivalent per day MMBTU million British thermal units MMCFD million cubic feet per day Miscellaneous MTPA million tonnes per annum CERCLA Federal Comprehensive Environmental Response Industry Compensation and Liability Act BLM Bureau of Land Management EPA Environmental Protection Agency CBM coalbed methane ESG environmental, social and governance CCS carbon capture and storage EU European Union E&P exploration and production FERC Federal Energy Regulatory Commission FEED front-end engineering and design FID final investment decision GHG greenhouse gas FPS floating production system HSE health, safety and environment FPSO floating production, storage and ICC International Chamber of Commerce offloading ICSID World Bank's International G&G geological and geophysical Centre for Settlement of JOA joint operati

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 2025 2024 2025 2024 Revenues and other income Sales and other operating revenues $ 15,031 13,041 45,552 40,509 Equity in earnings of affiliates 345 441 1,052 1,265 Gain (loss) on dispositions 3 ( 2 ) 399 86 Other income 143 124 360 356 Total revenues and other income 15,522 13,604 47,363 42,216 Costs and expenses Purchased commodities 5,857 4,747 17,130 14,939 Production and operating expenses 2,632 2,261 7,710 6,440 Selling, general and administrative expenses 271 186 712 528 Exploration expenses 71 70 269 284 Depreciation, depletion and amortization 2,917 2,390 8,501 6,935 Impairments 10 — 12 34 Taxes other than income taxes 525 476 1,648 1,567 Accretion on discounted liabilities 94 80 283 240 Interest and debt expense 223 189 660 592 Foreign currency transaction (gain) loss ( 6 ) ( 28 ) 21 ( 37 ) Other expenses — ( 2 ) 6 ( 8 ) Total costs and expenses 12,594 10,369 36,952 31,514 Income (loss) before income taxes 2,928 3,235 10,411 10,702 Income tax provision (benefit) 1,202 1,176 3,865 3,763 Net income (loss) $ 1,726 2,059 6,546 6,939 Net income (loss) per share of common stock (dollars) Basic $ 1.38 1.77 5.18 5.92 Diluted 1.38 1.76 5.18 5.91 Weighted-average common shares outstanding (in thousands) Basic 1,245,253 1,161,318 1,258,602 1,169,350 Diluted 1,246,854 1,163,227 1,260,059 1,171,424 See Notes to Consolidated Financial Statements. ConocoPhillips 2025 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 2025 2024 2025 2024 Net income (loss) $ 1,726 2,059 6,546 6,939 Other comprehensive income (loss), net of tax: Defined benefit plans 7 5 20 14 Unrealized holding gain (loss) on securities 1 14 5 10 Foreign currency translation adjustments ( 180 ) 147 374 ( 156 ) Unrealized gain (loss) on hedging activities — ( 50 ) — ( 40 ) Other comprehensive income (loss), net of tax ( 172 ) 116 399 ( 172 ) Comprehensive income (loss) $ 1,554 2,175 6,945 6,767 See Notes to Consolidated Financial Statements. 3 ConocoPhillips 2025 Q3 10-Q

Financial Statements Table of Contents

Financial Statements Table of Contents Consolidated Balance Sheet ConocoPhillips Millions of Dollars September 30 2025 December 31 2024 Assets Cash and cash equivalents $ 5,260 5,607 Short-term investments 996 507 Accounts and notes receivable (net of allowance of $ 3 and $ 7 , respectively) 5,744 6,695 Inventories 1,721 1,809 Prepaid expenses and other current assets 2,163 1,029 Total current assets 15,884 15,647 Investments and long-term receivables 10,074 9,869 Net properties, plants and equipment (net of accumulated DD&A of $ 87,510 and $ 81,072 , respectively) 93,498 94,356 Other assets 3,016 2,908 Total assets $ 122,472 122,780 Liabilities Accounts payable $ 6,245 6,044 Short-term debt 1,016 1,035 Accrued income and other taxes 1,939 2,460 Employee benefit obligations 1,020 1,087 Other accruals 1,789 1,498 Total current liabilities 12,009 12,124 Long-term debt 22,466 23,289 Asset retirement obligations and accrued environmental costs 8,264 8,089 Deferred income taxes 12,109 11,426 Employee benefit obligations 950 1,022 Other liabilities and deferred credits 1,751 2,034 Total liabilities 57,549 57,984 Equity Common stock ( 2,500,000,000 shares authorized at $ 0.01 par value) Issued (2025— 2,252,743,882 shares; 2024— 2,250,672,734 shares) Par value 23 23 Capital in excess of par 77,701 77,529 Treasury stock (at cost: 2025— 1,017,025,632 shares; 2024— 974,806,010 shares) ( 75,186 ) ( 71,152 ) Accumulated other comprehensive income (loss) ( 6,074 ) ( 6,473 ) Retained earnings 68,459 64,869 Total equity 64,923 64,796 Total liabilities and equity $ 122,472 122,780 See Notes to Consolidated Financial Statements. ConocoPhillips 2025 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 2025 2024 Cash flows from operating activities Net income (loss) $ 6,546 6,939 Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation, depletion and amortization 8,501 6,935 Impairments 12 34 Dry hole costs and leasehold impairments 105 48 Accretion on discounted liabilities 283 240 Deferred taxes 432 249 Distributions more (less) than income from equity affiliates 277 545 (Gain) loss on dispositions ( 399 ) ( 86 ) Other ( 203 ) ( 18 ) Working capital adjustments Decrease (increase) in accounts and notes receivable 921 656 Decrease (increase) in inventories 49 ( 100 ) Decrease (increase) in prepaid expenses and other current assets ( 117 ) ( 53 ) Increase (decrease) in accounts payable ( 211 ) ( 117 ) Increase (decrease) in taxes and other accruals ( 718 ) 395 Net cash provided by operating activities 15,478 15,667 Cash flows from investing activities Capital expenditures and investments ( 9,530 ) ( 8,801 ) Working capital changes associated with investing activities 488 195 Acquisition of businesses, net of cash acquired — 49 Proceeds from asset dispositions 1,632 217 Net sales (purchases) of investments ( 556 ) ( 599 ) Other ( 20 ) ( 11 ) Net cash used in investing activities ( 7,986 ) ( 8,950 ) Cash flows from financing activities Repayment of debt ( 851 ) ( 607 ) Issuance of company common stock ( 65 ) ( 66 ) Repurchase of company common stock ( 3,996 ) ( 3,513 ) Dividends paid ( 2,957 ) ( 2,749 ) Other ( 75 ) ( 131 ) Net cash used in financing activities ( 7,944 ) ( 7,066 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 146 ( 28 ) Net change in cash, cash equivalents and restricted cash ( 306 ) ( 377 ) Cash, cash equivalents and restricted cash at beginning of per

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 2024 Annual Report on Form 10-K. Certain prior year financial statement line items have been reclassified to conform to the current year presentation. Note 2—Inventories Millions of Dollars September 30 2025 December 31 2024 Crude oil and natural gas $ 852 907 Materials and supplies 869 902 Total inventories $ 1,721 1,809 Inventories valued on the LIFO basis $ 509 578 Note 3—Acquisitions and Dispositions Acquisition of Marathon Oil Corporation (Marathon Oil) In November 2024, we completed our acquisition of Marathon Oil, an independent oil and gas exploration and production company with operations across the Lower 48 and in Equatorial Guinea. At close, the transaction was valued at $ 16.5 billion, which primarily represented 0.255 shares of ConocoPhillips common stock exchanged for each outstanding share of Marathon Oil common stock. Total fair value Millions of Dollars Value of ConocoPhillips common stock issued* $ 15,972 Cash transferred at close** 451 Value attributable to Marathon Oil share-based awards 67 Other liabilities incurred*** 17 Total fair value $ 16,507 *Represents the fair value of approximately 143 million shares of ConocoPhillips common stock issued to Marathon

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Table of Contents 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. Debt assumed in the acquisition was valued based on observable market prices. The fair values of 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 acquisition, valued at $ 16.5 billion, was allocated to the identifiable assets and liabilities based on their estimated fair values as of the acquisition date of November 22, 2024. Assets acquired Millions of Dollars Cash and cash equivalents $ 385 Accounts receivable, net 976 Inventories 302 Investments and long-term receivables 562 Net properties, plants and equipment 24,232 Other assets 215 Total assets acquired $ 26,672 Liabilities assumed Accounts payable $ 1,183 Accrued income and other taxes 201 Employee benefit obligations 187 Long-term debt 4,719 Asset retirement obligations 781 Deferred income taxes 2,488 Other liabilities 606 Total liabilities assumed $ 10,165 Net assets acquired $ 16,507 With the completion of the transaction, we acquired proved properties of approximately $ 13 billion, with $ 12 billion in Lower 48 and $ 1 billion in Equatorial Guinea, and unproved properties of approximately $ 11 billion in Lower 48. We have recognized approximately $ 587 million pre-tax of transaction-related costs to date, inclusive of $ 2 million and $ 42 million in the three- and nine-month periods of 2025, respectively. These non-recurring costs related primarily to employee severance and related benefits, fees paid to advisors and the settlement of share-based awards for certain Marathon Oil employees based on the terms of the Merger Agreement. 7 ConocoPhillips 2025 Q3 10-Q

Notes to Consolidated Financial Statements Table of Contents

Notes to Consolidated Financial Statements Table of Contents 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, 2024, as if we had completed the acquisition on January 1, 2023. Millions of Dollars Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024 As reported Pro forma Marathon Oil Pro forma combined As reported Pro forma Marathon Oil Pro forma combined Supplemental pro forma (unaudited) Total revenues and other Income $ 13,604 1,791 15,395 $ 42,216 5,049 47,265 Net income (loss) 2,059 401 2,460 6,939 1,195 8,134 Earnings per share: Basic net income (loss) $ 1.77 1.88 $ 5.92 6.18 Diluted net income (loss) 1.76 1.88 5.91 6.17 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, 2023, nor is it necessarily indicative of future operating results of the combined entity. The pro forma results do not include 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 as well as adjustments for tax impacts. We believe the estimates and assumptions are reasonable, and the relative effects of the transaction are properly reflected. Assets Sold In the first quarter of 2025, we sold our interests in certain noncore assets in the Lower 48 segment for net proceeds of $ 581 million and recognized a $ 64 million before-tax and $ 49 million after-tax gain. At the time of disposition, our interest in these assets had a net carrying value of $ 517 million, comprised primarily of $ 553 million of PP&E and $ 36 million of liabilities, primarily rel

Notes to Consolidated Financial Statements

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, 2025, the outstanding balance of APLNG's debt was $ 3.4 billion under various previously entered facilities. The last principal and interest payment on these facilities is due in September 2030. See Note 8 . At September 30, 2025, the carrying value of our equity method investment in APLNG was approximately $ 4.8 billion. Port Arthur LNG (PALNG) We hold a 30 percent direct equity investment in PALNG, a joint venture for the development of a large-scale LNG facility. At September 30, 2025, the carrying value of our equity method investment in PALNG was approximately $ 1.6 billion. Qatar 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 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, 2025, the carrying value of our equity method investments in Qatar was approximately $ 1.6 billion. Note 5—Debt Our debt bal ance at September 30, 2025 was $ 23.5 billion, compared with $ 24.3 billion at December 31, 2024 . In the second quarter of 2025, the company retired $ 0.2 billion principal amount of our 3.35 % Notes at maturity. In the first quarter of 2025, the company retired a total of $ 0.5 billion principal amount of debt at maturity, consisting of $ 0.4 billi

Notes to Consolidated Financial Statements Table of Contents

Notes to Consolidated Financial Statements Table of Contents Note 6—Suspended Wells and Exploration Expenses The capitalized cost of suspended wells at September 30, 2025 was $ 209 million, an increase of $ 13 million from December 31, 2024. In the second quarter of 2025, the second Slagugle appraisal well in PL891 in the Norwegian Sea was drilled and the presence of hydrocarbons was confirmed, resulting in a $ 77 million increase to our suspended wells costs. We also divested certain Lower 48 offshore interests in partner-operated assets, which included $ 31 million of suspended wells costs. See Note 3 . In the first quarter of 2025, we recognized dry hole expenses of $ 36 million related to certain previously suspended wells that were capitalized for a period greater than one year in our Asia Pacific segment . ConocoPhillips 2025 Q3 10-Q 10

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Table of Contents Note 7—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, 2025 Balances at June 30, 2025 $ 23 77,643 ( 73,899 ) ( 5,902 ) 67,707 65,572 Net income (loss) 1,726 1,726 Other comprehensive income (loss) ( 172 ) ( 172 ) Dividends declared Ordinary ($ 0.78 per common share) ( 975 ) ( 975 ) Repurchase of company common stock ( 1,274 ) ( 1,274 ) Excise tax on share repurchases ( 13 ) ( 13 ) Distributed under benefit plans 58 58 Other 1 1 Balances at September 30, 2025 $ 23 77,701 ( 75,186 ) ( 6,074 ) 68,459 64,923 For the nine months ended September 30, 2025 Balances at December 31, 2024 $ 23 77,529 ( 71,152 ) ( 6,473 ) 64,869 64,796 Net income (loss) 6,546 6,546 Other comprehensive income (loss) 399 399 Dividends declared Ordinary ($ 2.34 per common share) ( 2,957 ) ( 2,957 ) Repurchase of company common stock ( 3,996 ) ( 3,996 ) Excise tax on share repurchases ( 38 ) ( 38 ) Distributed under benefit plans 172 172 Other 1 1 Balances at September 30, 2025 $ 23 77,701 ( 75,186 ) ( 6,074 ) 68,459 64,923 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 ( 6

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