) hit a 52-week high of $86.65 on Jul 8. In fact, the Houston,
TX-based energy giant has seen its stock price climb 21.78% since
the beginning of the year. This price appreciation can be
attributed to consistency in its earnings/cash flows, attractive
fundamentals and a shareholder-friendly financial policy.
The company's recent performance was backed by continued portfolio
shift to liquids and higher production from new development
programs, as well as upstream ventures in key projects. However,
this was partially offset by lower oil realizations. ConocoPhillips
is progressing on other North American shale plays, including
several emerging areas.
ConocoPhillips holds leading positions in both natural gas and
heavy crude oil acreages in North America, as well as a legacy
position in the North Sea and growing exposure to lucrative
international regions. The Houston, TX-based company thus looks
forward to replacing reserves and sustaining production growth over
the long term.
ConocoPhillips' initiatives toward liquids-rich plays are gaining
momentum through the Eagle Ford, Bakken and Permian plays. The
company is also poised to benefit from a pipeline of projects in
the Gulf of Mexico, Malaysia, the liquefied natural gas project in
Australia, the U.K., Norway, and the Canadian oil sands, apart from
the US Lower 48 liquids-rich plays. Oil sands expansion projects
are also on track.
Since Apr 2012, when the company spun off its refining operations
), it has delivered total shareholder returns of 22%.
ConocoPhillips' complete shift of focus to upstream operations and
thus oil and gas prices play a major role in determining its
performance. The company plans to expand production by maintaining
its growth focus on reserves, through global drilling programs in
legacy assets, unconventional assets and major projects.
ConocoPhillips' margin growth would also be aided by its shift of
production mix to higher-value products. The company expects to
spend $16 billion on average annually and allocate 95% of its
capital to investments that deliver above-average margins. The
recent activity targets offshore prospects in Australia, Angola and
Senegal, conventional exploration in Norway and Indonesia, and
unconventional exploration in North America, Poland and Colombia.
Zacks Rank & Key Picks
ConocoPhillips currently holds a Zacks Rank #1 (Strong Buy). Other
stocks worth considering in the oil and gas sector include Zacks
Callon Petroleum Company
Flotek Industries Inc.
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