World's largest independent exploration and production company,
) at its Annual Meeting of Stockholders held in Houston reiterated
its target of delivering double-digit returns annually to
shareholders by growing production and margins by 3% to 5% a year
and offering a steadily increasing dividend.
Since Apr 2012, when the company spun off its refining operations
), it has generated total shareholder returns of 22%. With this,
ConocoPhillips has shifted its total focus to upstream operations
and thus oil and gas prices play a major role in determining its
performance. The company plans to grow production by maintaining
its focus on growth in reserves, through global drilling programs
in legacy assets, unconventional assets and major projects.
ConocoPhillips' margin growth drive would also be helped by its
shift of production mix to higher-value products. The company
expects to spend $16 billion on average annually and will allocate
95% of its capital to investments that deliver above-average
margins. The recent activity aims offshore prospects in Australia
Angola and Senegal, conventional exploration in Norway and
Indonesia and unconventional exploration in North America, Poland
With leading positions in both natural gas and heavy crude oil in
North America, as well as a legacy position in the North Sea and
growing exposure to lucrative international regions, ConocoPhillips
expects to replace reserves and sustain production growth over the
long term. ConocoPhillips' liquids-rich exploration initiatives are
gaining momentum through the Eagle Ford, Bakken and North Barnett
We believe that any downtrend in the global economy will affect the
supply-demand fundamentals of oil and gas, hurting the sales prices
of crude oil and natural gas.
ConocoPhillips currently carries a Zacks Rank #3 (Hold), implying
that it is expected to perform in line with the broader U.S. equity
market over the next one to three months. Investors interested in
the oil and gas sector could consider stocks like
Athlon Energy Inc.
Pembina Pipeline Corp.
). Both these carry a Zacks Rank #1 (Strong Buy).
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