ConocoPhillips (COP): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
We are maintaining our Neutral recommendation on ConocoPhillips following its fourth quarter results. The company's performance was backed by a continued portfolio shift to liquids and an increased proportion of production in higher-margin areas, offset by lower volumes in other regions and lower liquids & gas price realization. ConocoPhillips is making progress in other North American shale plays, including several emerging areas. Furthermore, the company has completed asset sales of approximately $10.2 billion from its divestiture program in 2013, which is likely to offset the financing gap for 2014 to a great extent. However, ConocoPhillips remains vulnerable to unstable movements in crude oil and natural gas prices, as well as the volatile nature of the macro backdrop.

Overview:

Houston, Texas-based ConocoPhillips (COP) is a major global exploration and production (E&P) company with operations and activities in 30 countries that include the U.S., Canada, UK/Norway, China, Australia, offshore Timor-Leste, Indonesia, Libya, Nigeria, Algeria, Russia and Qatar.

As of the end of 2013, the company had estimated proved reserves of 8.9 billion oil-equivalent barrels (BOE) as compared with 8.6 billion BOE at the end of 2012. The company added 1.1 billion BOE of proved organic reserves in 2013, representing a reserve replacement ratio of 179%. Assets disposition in 2013 reduced reserves by 188 million BOE and total reserve replacement was 147%.

Earlier, in May 2012, ConocoPhillips completed the spin-off of its refining/sales business into a separate, independent and publicly traded company, Phillips 66. The move had resulted in the creation of the largest refining company in the U.S. (with a capacity of 2.4 million barrels per day) and the largest exploration and production player based on oil and gas reserves.

The new downstream company, Phillips 66, is headquartered in Houston, Texas. In addition to the refining, marketing and transportation businesses, Phillips 66 also include most of the Midstream and Chemicals segments, as well as power generation and certain technology operations included in the Emerging Businesses segment, creating an integrated downstream company.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: BOE , COP

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