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Current Report Filing (8-k)

29/10/2015 12:10pm

Edgar (US Regulatory)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): October 29, 2015

ConocoPhillips
(Exact name of registrant as specified in its charter)

Delaware

001-32395

01-0562944

(State or other jurisdiction of

incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

600 North Dairy Ashford
Houston, Texas 77079

(Address of principal executive offices and zip code)


Registrant’s telephone number, including area code: (281) 293-1000


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Item 2.02 Results of Operations and Financial Condition.

On October 29, 2015, ConocoPhillips issued a press release announcing the company's financial and operating results for the quarter ended September 30, 2015.  A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.  Additional financial and operating information about the quarter is furnished as Exhibit 99.2 hereto and incorporated herein by reference.  


Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1  —  Press release issued by ConocoPhillips on October 29, 2015.

99.2  —  Supplemental financial information.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CONOCOPHILLIPS

 

 

/s/ Glenda M. Schwarz

Glenda M. Schwarz

Vice President and Controller

 

October 29, 2015

3

EXHIBIT INDEX


Exhibit

No.

Description

 

99.1

Press release issued by ConocoPhillips on October 29, 2015.

 

99.2

Supplemental financial information.

4



Exhibit 99.1

ConocoPhillips Reports Third-Quarter 2015 Results; Accelerating Capital and Operating Cost Reductions

HOUSTON--(BUSINESS WIRE)--October 29, 2015--ConocoPhillips (NYSE:COP) today reported a third-quarter 2015 net loss of $1.1 billion, or ($0.87) per share, compared with third-quarter 2014 earnings of $2.7 billion, or $2.17 per share. Excluding special items, third-quarter 2015 adjusted earnings were a net loss of $466 million, or ($0.38) per share, compared with third-quarter 2014 adjusted earnings of $1.6 billion, or $1.29 per share. Special items for the current quarter related primarily to the termination of a rig contract for a Gulf of Mexico deepwater drillship, non-cash impairments, restructuring costs and pension settlement expense.

Highlights

  • Increased quarterly dividend to $0.74 per share in July.
  • Accelerating capital and operating cost reductions; further reduced 2015 capital expenditures guidance from $11.0 billion to $10.2 billion and operating cost guidance from $8.9 billion to $8.2 billion.
  • Achieved third-quarter production of 1,554 MBOED; on track to exceed full-year 2015 production guidance.
  • Four percent year-over-year production growth from continuing operations, adjusted for Libya, downtime and dispositions.
  • Special items of $654 million pre-tax drove a 9 percent year-over-year increase in operating costs; however, adjusted for special items, underlying operating costs improved 18 percent.
  • Achieved first oil at Surmont 2 in Canada during the quarter, as well as CD5 and Drill Site 2S in Alaska in October; on track for first cargo at APLNG by year end.
  • Successfully completed major turnarounds in the Alaska, Europe, and Asia Pacific and Middle East segments.

“We are accelerating actions to position our company for low and volatile prices, while improving the underlying performance of the business,” said Ryan Lance, chairman and chief executive officer. “We are on track to deliver seven major project startups and exceed our volume targets for the year. We are exercising flexibility in our capital program, dramatically lowering our cost structure and divesting assets that do not compete for funding in our portfolio. These steps will make us more flexible and resilient for the future. We remain committed to a compelling dividend, affordable growth and strong financial performance.”

Operations Update

Lower 48 – Quarterly production was 551 thousand barrels of oil equivalent per day (MBOED), an increase of 8 MBOED compared with the same period in 2014. The increase was primarily from growth in liquids-rich unconventional plays as well as improved drilling performance, partially offset by normal field decline. The Eagle Ford and Bakken collectively delivered 234 MBOED for the quarter, a 10 percent increase compared with the third quarter of 2014. Lower 48 crude production grew 12 percent year over year. In the Gulf of Mexico, results from the Shenandoah appraisal well are encouraging. The Vernaccia and Gibson exploration wells are currently drilling and the Melmar exploration well is expected to spud in the fourth quarter.

Canada – Third-quarter production was 315 MBOED, an increase of 39 MBOED compared with the third quarter of 2014. The increase was primarily driven by strong well performance in western Canada and the oil sands, ramp up at Foster Creek Phase F, and lower downtime. First production was achieved at Surmont 2 and production is expected to ramp up through 2017. In October, the Cheshire exploration well spud offshore Nova Scotia.


Alaska – Production for the quarter was 160 MBOED, an increase of 5 MBOED compared with the same period in 2014. This increase was due to lower planned downtime, partially offset by normal field decline. Turnaround activities were successfully completed at Kuparuk and Prudhoe. In October, first oil was achieved at CD5 and Drill Site 2S.

Europe – Quarterly production was 192 MBOED, a decrease of 2 MBOED compared with the same period in 2014. The decrease was primarily the result of normal field decline and downtime, partially offset by new production from major projects and well performance. Turnaround activity was successfully completed across the U.K.

Asia Pacific and Middle East – Third-quarter production was 332 MBOED, an increase of 31 MBOED compared with the third quarter of 2014. The increase was primarily the result of growth from major projects, partially offset by normal field decline. In Malaysia, the major turnaround activity at Gumusut was completed ahead of schedule. In Australia, APLNG is progressing toward first cargo, which is expected by year end.

Other International – Production was 4 MBOED in the third quarter, flat compared with the same period in 2014 when excluding Libya. The Es Sider Terminal in Libya remains shut-in as a result of ongoing unrest.

Third-Quarter Review

Production from continuing operations, excluding Libya, for the third quarter of 2015 was 1,554 MBOED, an increase of 81 MBOED compared with the same period a year ago. Growth was primarily due to new production from major projects and development programs, partially offset by normal field decline. The net increase in production reflects 56 MBOED, or 4 percent growth, after adjusting for 25 MBOED from dispositions and downtime.

Adjusted earnings were lower compared with third-quarter 2014 primarily due to lower realized prices. The company’s total realized price was $32.91 per barrel of oil equivalent (BOE), compared with $64.78 per BOE in the third quarter of 2014, reflecting lower average realized prices across all commodities.

Special items for the quarter resulted in after-tax impacts of $246 million from the termination of a rig contract for a Gulf of Mexico deepwater drillship, $195 million from non-cash impairments in the Lower 48 and Asia Pacific and Middle East segments, $156 million from restructuring costs, $56 million of pension settlement expenses and a $48 million decrease in depreciation from a third-quarter revision in the Lower 48.

Operating costs for the quarter were $2.66 billion compared with $2.44 billion in the third quarter of 2014. Adjusted for rig termination, restructuring charges and pension settlement expense, totaling $0.65 billion pre-tax, operating costs were improved 18 percent year over year or $0.43 billion.

For the quarter, cash provided by continuing operating activities was $1.9 billion. Excluding a $0.6 billion change in operating working capital, ConocoPhillips generated $1.3 billion in cash from operations. Adjusted for the $0.3 billion working capital impact from special items, cash from operations excluding working capital would have been $1.6 billion during the quarter. In addition, the company funded $2.2 billion in capital expenditures and investments and paid dividends of $0.9 billion.


Nine-Month Review

ConocoPhillips’ nine-month 2015 earnings were a net loss of $978 million, or ($0.80) per share, compared with nine-month 2014 earnings of $6.9 billion, or $5.54 per share. Nine-month 2015 adjusted earnings were a net loss of $607 million, or ($0.50) per share, compared with nine-month 2014 adjusted earnings of $5.9 billion, or $4.71 per share.

Production from continuing operations, excluding Libya, for the first nine months of 2015 was 1,586 MBOED, compared with 1,520 MBOED for the same period in 2014. Production increased due to new production from major projects and development programs as well as improved well performance, partially offset by normal field decline.

The company’s total realized price during this period was $36.31 per BOE, compared with $68.71 per BOE in the first nine months of 2014. This reflected lower average realized prices across all commodities.

Operating costs for the first nine months of 2015 were $6.96 billion compared with $7.17 billion in 2014. Adjusted for rig termination, restructuring charges and pension settlement expense, totaling $0.83 billion pre-tax, operating costs were improved 15 percent year over year or $1.04 billion.

For the nine months ended Sept. 30, 2015, cash provided by continuing operating activities was $6.0 billion. Excluding a $0.2 billion change in operating working capital, ConocoPhillips generated $5.8 billion in cash from operations. Additionally, the company funded $7.9 billion in capital expenditures and investments, paid dividends of $2.7 billion and increased debt by $2.4 billion.

As of Sept. 30, 2015, ConocoPhillips had $2.4 billion of cash and cash equivalents. The company ended the third quarter with debt of $24.9 billion and a debt-to-capital ratio of 36 percent.

Outlook

Fourth-quarter production guidance is 1,585 to 1,625 MBOED. Full-year 2015 production guidance is 1,585 to 1,595 MBOED, resulting in expected year-over-year growth of 3 to 4 percent from continuing operations, excluding Libya.

The company has further reduced its 2015 capital expenditures guidance to $10.2 billion compared with initial 2015 guidance of $11.5 billion. The company has also reduced 2015 operating cost guidance to $8.2 billion compared with initial guidance of $9.2 billion. For both capital and operating costs, approximately half of these reductions are due to market factors, while the remainder are the result of discretionary actions to lower costs.

Corporate segment net expense has been reduced to $0.8 billion. Guidance for depreciation, depletion and amortization of $9.0 billion, and exploration dry hole and leasehold impairment expense of $0.8 billion are unchanged. Guidance excludes any special items.

ConocoPhillips expects to release its 2016 capital and operating plan on Dec. 10, 2015. Management also plans to host a call in conjunction with the release. Additional details will be provided at a later date.

ConocoPhillips will host a conference call today at 12:00 p.m. EDT to discuss its third-quarter results and provide an operational update. To listen to the call, and view related presentation materials and supplemental information, go to www.conocophillips.com/investor.

--- # # # ---


About ConocoPhillips

ConocoPhillips is the world’s largest independent E&P company based on production and proved reserves. Headquartered in Houston, Texas, ConocoPhillips had operations and activities in 25 countries, $31 billion in annualized revenue, $106 billion of total assets, and approximately 17,800 employees as of Sept. 30, 2015. Production, excluding Libya, averaged 1,586 MBOED for the nine months ended Sept. 30, 2015, and proved reserves were 8.9 billion BOE as of Dec. 31, 2014. For more information, go to www.conocophillips.com.

CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This news release contains forward-looking statements. Forward-looking statements relate to future events and anticipated results of operations, business strategies, and other aspects of our operations or operating results. In many cases you can identify forward-looking statements by terminology such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," "objective," "projection," "forecast," "goal," "guidance," "outlook," "effort," "target" and other similar words. However, the absence of these words does not mean that the statements are not forward-looking. Where, in any forward-looking statement, the company expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, there can be no assurance that such expectation or belief will result or be achieved. The actual results of operations can and will be affected by a variety of risks and other matters including, but not limited to, changes in commodity prices; changes in expected levels of oil and gas reserves or production; operating hazards, drilling risks, unsuccessful exploratory activities; difficulties in developing new products and manufacturing processes; unexpected cost increases; international monetary conditions; potential liability for remedial actions under existing or future environmental regulations; potential liability resulting from pending or future litigation; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets; and general domestic and international economic and political conditions; as well as changes in tax, environmental and other laws applicable to our business. Other factors that could cause actual results to differ materially from those described in the forward-looking statements include other economic, business, competitive and/or regulatory factors affecting our business generally as set forth in our filings with the Securities and Exchange Commission. Unless legally required, ConocoPhillips undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Use of Non-GAAP Financial Information – This news release includes the terms adjusted earnings, adjusted earnings per share and operating costs. These are non-GAAP financial measures. These terms are included to help facilitate comparisons of company operating performance across periods and with peer companies. Operating costs represent controllable costs and include production and operating expenses, selling, general and administrative expenses and exploration expenses excluding dry holes and leasehold impairments.

References in the release to earnings refer to net income/(loss) attributable to ConocoPhillips.


               

ConocoPhillips

Reconciliation of Earnings to Adjusted Earnings

$ Millions, Except as Indicated
3Q YTD
2015     2014 2015     2014

Earnings

$ (1,071 ) 2,704 (978 ) 6,908
Adjustments:
Net gain on asset sales - - (29 ) -
Impairments 195 151 335 260
Loss on capacity agreements - - - 83
Qatar depreciation adjustment - - - 28
International tax law changes - - (426 ) -
Restructuring 156 - 227 -
Pending claims and settlements - (105 ) - (220 )
Tax impact from country exit - - (28 ) -
Pension settlement expense 56 - 94 -
Rig termination 246 - 246 -
Depreciation volume adjustment (48 ) - (48 ) -
Tax benefit on interest expense - (61 ) - (61 )

Discontinued operations - other ¹

      -       (1,078 ) -       (1,131 )

Adjusted earnings

    $ (466 )     1,611   (607 )     5,867  

(1) Includes Kashagan, Algeria and Nigeria

 
Earnings per share of common stock (dollars) $ (0.87 ) 2.17 (0.80 ) 5.54
 
Adjusted earnings per share of common stock (dollars) $ (0.38 ) 1.29 (0.50 ) 4.71
 

CONTACT:
ConocoPhillips
Daren Beaudo, 281-293-2073 (media)
daren.beaudo@conocophillips.com
Sidney J. Bassett, 281-293-5000 (investors)
sid.bassett@conocophillips.com
Vladimir R. dela Cruz, 281-293-5000 (investors)
v.r.delacruz@conocophillips.com



Exhibit 99.2


Third-Quarter 2015 Detailed Supplemental Information
   
 
2014 2015
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr   YTD
$ Millions, Except as Indicated
CONSOLIDATED INCOME STATEMENT
 
Revenues and Other Income
Sales and other operating revenues 15,415 13,821 12,080 11,208 52,524 7,716 8,293 7,262 23,271
Equity in earnings of affiliates 572 672 764 521 2,529 205 258 223 686
Gain on dispositions 9 7 4 78 98 52 52 18 122
Other income 52   201   69   44   366   29   57   4       90  
Total Revenues and Other Income 16,048   14,701   12,917   11,851   55,517   8,002   8,660   7,507       24,169  
 
Costs and Expenses
Purchased commodities 7,127 5,495 4,703 4,774 22,099 3,237 3,230 3,269 9,736
Production and operating expenses 1,895 2,030 2,041 2,943 8,909 1,802 1,798 1,834 5,434
Selling, general and administrative expenses 182 218 203 132 735 159 218 293 670
Exploration expenses 296 517 459 773 2,045 482 549 1,061 2,092
Depreciation, depletion and amortization 1,892 2,070 2,096 2,271 8,329 2,131 2,329 2,271 6,731
Impairments 1 17 108 730 856 16 78 24 118
Taxes other than income taxes 651 612 493 332 2,088 224 225 206 655
Accretion on discounted liabilities 117 120 120 127 484 121 122 122 365
Interest and debt expense 171 155 149 173 648 202 210 240 652
Foreign currency transaction (gains) losses 18   7   (8 ) (83 ) (66 ) (16 ) (8 ) (72 )     (96 )
Total Costs and Expenses 12,350   11,241   10,364   12,172   46,127   8,358   8,751   9,248       26,357  
Income (loss) from continuing operations before income taxes 3,698 3,460 2,553 (321 ) 9,390 (356 ) (91 ) (1,741 ) (2,188 )
Provision (benefit) for income taxes 1,581   1,395   904   (297 ) 3,583   (642 ) 73   (685 )     (1,254 )
Income (loss) from continuing operations 2,117 2,065 1,649 (24 ) 5,807 286 (164 ) (1,056 ) (934 )
Income from discontinued operations 20   33   1,078   -   1,131   -   -   -       -  
Net Income (Loss) 2,137 2,098 2,727 (24 ) 6,938 286 (164 ) (1,056 ) (934 )
Less: net income attributable to noncontrolling interests (14 ) (17 ) (23 ) (15 ) (69 ) (14 ) (15 ) (15 )     (44 )
Net Income (Loss) Attributable to ConocoPhillips 2,123   2,081   2,704   (39 ) 6,869   272   (179 ) (1,071 )     (978 )
 
Net Income (Loss) Attributable to ConocoPhillips
Per Share of Common Stock (dollars)
Basic
Continuing operations 1.70 1.65 1.31 (0.03 ) 4.63 0.22 (0.15 ) (0.87 ) (0.80 )
Discontinued operations 0.02   0.03   0.87   -   0.91   -   -   -       -  
Net Income (Loss) Attributable to ConocoPhillips
Per Share of Common Stock 1.72   1.68   2.18   (0.03 ) 5.54   0.22   (0.15 ) (0.87 )     (0.80 )
Diluted
Continuing operations 1.69 1.64 1.31 (0.03 ) 4.60 0.22 (0.15 ) (0.87 ) (0.80 )
Discontinued operations 0.02   0.03   0.86   -   0.91   -   -   -       -  
Net Income (Loss) Attributable to ConocoPhillips
Per Share of Common Stock 1.71   1.67   2.17   (0.03 ) 5.51   0.22   (0.15 ) (0.87 )     (0.80 )
 
Average Common Shares Outstanding (in thousands)
Basic 1,234,968 1,236,057 1,238,234 1,239,975 1,237,325 1,240,791 1,241,026 1,242,125 1,241,319
Diluted 1,242,667   1,245,155   1,247,436   1,239,975   1,245,863   1,245,531   1,241,026   1,242,125       1,241,319  
 
 
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES
 
Alaska 930 973 722 497 3,122 225 305 53 583
 
Lower 48 516 434 78 (1,142 ) (114 ) (637 ) (460 ) (1,320 ) (2,417 )
 
Canada 466 241 340 129 1,176 (218 ) (38 ) (211 ) (467 )
 
Europe 1,041 781 633 (163 ) 2,292 187 116 (20 ) 283
 
Asia Pacific and Middle East 1,093 1,233 1,058 818 4,202 572 521 310 1,403
 
Other International (67 ) 99 10 (131 ) (89 ) (160 ) (329 ) (77 ) (566 )
 
Corporate and Other (281 ) (301 ) (288 ) (329 ) (1,199 ) (325 ) (206 ) (476 ) (1,007 )
                       
Consolidated 3,698   3,460   2,553   (321 ) 9,390   (356 ) (91 ) (1,741 )     (2,188 )
 
 
EFFECTIVE INCOME TAX RATES FOR
CONTINUING OPERATIONS
 
Alaska* 35.6 % 35.6 % 34.4 % 31.1 % 34.6 % 35.2 % 36.3 % 1.3 % 32.7 %
 
Lower 48 37.3 % 38.7 % 60.0 % 43.8 % 80.9 % 36.5 % 36.3 % 35.4 % 35.9 %
 
Canada 23.7 % 24.0 % 9.7 % 27.0 % 20.1 % 27.6 % -343.5 % 31.4 % -0.3 %
 
Europe 66.7 % 66.8 % 66.4 % 90.8 % 64.9 % -240.1 % 67.9 % 79.1 % -136.4 %
 
Asia Pacific and Middle East 30.9 % 30.1 % 27.0 % 24.4 % 28.4 % 28.6 % 34.0 % 11.8 % 26.9 %
 
Other International 57.2 % -21.7 % 296.5 % -24.6 % -0.2 % 41.9 % 54.8 % 44.8 % 49.8 %
 
Corporate and Other 16.4 % 16.3 % 55.0 % 21.5 % 27.1 % 23.3 % 36.1 % 28.9 % 28.6 %
                       
Consolidated 42.8 % 40.3 % 35.4 % 92.7 % 38.2 % 179.8 % -81.7 % 39.3 %     57.3 %
*Alaska including taxes other than income taxes. 51.6 % 50.3 % 48.6 % 44.2 % 49.4 % 47.0 % 49.9 % 56.4 % 49.9 %

1 of 8

2014   2015
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
$ Millions
EARNINGS BY SEGMENT
 
Alaska 598 627 473 343 2,041 145 195 53 393
 
Lower 48 324 265 32 (643 ) (22 ) (405 ) (293 ) (852 ) (1,550 )
 
Canada 356 182 307 95 940 (158 ) (166 ) (145 ) (469 )
 
Europe 347 259 213 (15 ) 804 637 37 (4 ) 670
 
Asia Pacific and Middle East 742 845 749 603 2,939 395 328 258 981
 
Other International (29 ) 121 (18 ) (164 ) (90 ) (93 ) (148 ) (43 ) (284 )
 
Corporate and Other (235 ) (251 ) (130 ) (258 ) (874 ) (249 ) (132 ) (338 ) (719 )
 
Discontinued Operations 20 33 1,078 - 1,131 - - - -
                     
Consolidated 2,123   2,081   2,704   (39 ) 6,869   272   (179 ) (1,071 )   (978 )
 
 
SPECIAL ITEMS (AFTER-TAX)
 
Alaska - - - (36 ) (36 ) (1 ) - (10 ) (11 )
 
Lower 48 (122 ) - (151 ) (610 ) (883 ) (16 ) - (389 ) (405 )
 
Canada - (109 ) 47 9 (53 ) (18 ) (106 ) (27 ) (151 )
 
Europe - - - (144 ) (144 ) 551 (34 ) (7 ) 510
 
Asia Pacific and Middle East (28 ) - 30 - 2 (1 ) - (44 ) (45 )
 
Other International - 154 - - 154 - (79 ) (1 ) (80 )
 
Corporate and Other - - 89 - 89 (21 ) (41 ) (127 ) (189 )
 
Discontinued Operations 20 33 1,078 - 1,131 - - - -
                     
Consolidated (130 ) 78   1,093   (781 ) 260   494   (260 ) (605 )   (371 )
 
 
ADJUSTED EARNINGS
 
Alaska 598 627 473 379 2,077 146 195 63 404
 
Lower 48 446 265 183 (33 ) 861 (389 ) (293 ) (463 ) (1,145 )
 
Canada 356 291 260 86 993 (140 ) (60 ) (118 ) (318 )
 
Europe 347 259 213 129 948 86 71 3 160
 
Asia Pacific and Middle East 770 845 719 603 2,937 396 328 302 1,026
 
Other International (29 ) (33 ) (18 ) (164 ) (244 ) (93 ) (69 ) (42 ) (204 )
 
Corporate and Other (235 ) (251 ) (219 ) (258 ) (963 ) (228 ) (91 ) (211 ) (530 )
                     
Consolidated 2,253   2,003   1,611   742   6,609   (222 ) 81   (466 )   (607 )
 
 
ADJUSTED EFFECTIVE INCOME TAX RATES FOR
CONTINUING OPERATIONS
 
Alaska 35.6 % 35.6 % 34.4 % 31.5 % 34.6 % 35.2 % 36.3 % 8.4 % 32.7 %
 
Lower 48 37.0 % 38.7 % 42.7 % 68.1 % 36.5 % 36.5 % 36.4 % 35.2 % 36.0 %
 
Canada 23.7 % 24.3 % 23.5 % 26.5 % 24.1 % 28.0 % 22.9 % 32.3 % 28.8 %
 
Europe 66.7 % 66.8 % 66.4 % 61.1 % 66.0 % 58.3 % 61.7 % -175.3 % 59.3 %
 
Asia Pacific and Middle East 30.1 % 30.1 % 27.1 % 24.4 % 28.3 % 28.6 % 34.0 % 24.3 % 29.3 %
 
Other International 57.2 % 39.3 % 296.5 % -24.6 % -0.1 % 41.8 % 42.0 % 44.7 % 42.5 %
 
Corporate and Other 16.4 % 16.3 % 30.8 % 21.5 % 21.5 % 21.9 % 34.9 % 27.9 % 26.8 %
                     
Consolidated 42.1 % 41.5 % 40.0 % 39.7 % 41.2 % 17.8 % 54.9 % 41.3 %   30.3 %
The income tax effects of the special items are calculated based on the statutory rate of the jurisdiction in which the discrete item resides.

2 of 8

2014   2015
$ Millions 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
DETAILED SPECIAL ITEMS (AFTER-TAX)
 
Alaska
Impairments - - - (36 ) (36 ) - - - -
Restructuring -   -   -   -   -   (1 ) -   (10 )   (11 )
Total -   -   -   (36 ) (36 ) (1 ) -   (10 )   (11 )
 
Lower 48
Restructuring - - - - - (16 ) - (37 ) (53 )
Loss on capacity agreements (83 ) - - - (83 ) - - - -
Impairments - - (151 ) (124 ) (275 ) - - (154 ) (154 )
Rig termination - - - - - - - (246 ) (246 )
Pending claims and settlements (39 ) - - - (39 ) - - - -
Freeport LNG termination agreement - - - (545 ) (545 ) - - - -
Deferred tax adjustment - - - 59 59 - - - -
Depreciation volume adjustment -   -   -   -   -   -   -   48     48  
Total (122 ) -   (151 ) (610 ) (883 ) (16 ) -   (389 )   (405 )
 
Canada
Gain (loss) on asset sales - - - 38 38 - 29 - 29
Pending claims and settlements - - 47 - 47 - - - -
Impairments - (109 ) - (29 ) (138 ) - - - -
Restructuring - - - - - (18 ) 1 (27 ) (44 )
International tax law changes -   -   -   -   -   -   (136 ) -     (136 )
Total -   (109 ) 47   9   (53 ) (18 ) (106 ) (27 )   (151 )
 
Europe
Restructuring - - - - - (4 ) (1 ) (7 ) (12 )
Impairments - - - (192 ) (192 ) - (33 ) - (33 )
International tax law changes - - - - - 555 - - 555
Pending claims and settlements -   -   -   48   48   -   -   -     -  
Total -   -   -   (144 ) (144 ) 551   (34 ) (7 )   510  
 
Asia Pacific and Middle East
Restructuring - - - - - (1 ) - (3 ) (4 )
Impairments - - - - - - - (41 ) (41 )
Qatar depreciation adjustment (28 ) - - - (28 ) - - - -
Pending claims and settlements -   -   30   -   30   -   -   -     -  
Total (28 ) -   30   -   2   (1 ) -   (44 )   (45 )
 
Other International
Impairments - - - - - - (107 ) - (107 )
Tax impact from country exit - - - - - - 28 - 28
Restructuring - - - - - - - (1 ) (1 )
Pending claims and settlements -   154   -   -   154   -   -   -     -  
Total -   154   -   -   154   -   (79 ) (1 )   (80 )
 
Corporate and Other
Restructuring - - - - - (21 ) (10 ) (71 ) (102 )
Pension settlement expense - - - - - - (38 ) (56 ) (94 )
International tax law changes - - - - - - 7 - 7
Tax benefit on interest expense - - 61 - 61 - - - -
Pending claims and settlements -   -   28   -   28   -   -   -     -  
Total -   -   89   -   89   (21 ) (41 ) (127 )   (189 )
 
Discontinued Operations 20 33 1,078 - 1,131 - - - -
 
Total Company (130 ) 78   1,093   (781 ) 260   494   (260 ) (605 )   (371 )

3 of 8

2014     2015  
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
$ Millions
CASH FLOW INFORMATION
 
Cash Flows from Operating Activities
Net income (loss) 2,137 2,098 2,727 (24 ) 6,938 286 (164 ) (1,056 ) (934 )
Depreciation, depletion and amortization 1,892 2,070 2,096 2,271 8,329 2,131 2,329 2,271 6,731
Impairments 1 17 108 730 856 16 78 24 118
Dry hole costs and leasehold impairments 69 334 265 498 1,166 311 402 525 1,238
Accretion on discounted liabilities 117 120 120 127 484 121 122 122 365
Deferred taxes 230 403 391 (315 ) 709 (637 ) 35 (682 ) (1,284 )
Undistributed equity earnings 1,131 (450 ) (347 ) (257 ) 77 80 (121 ) (38 ) (79 )
Gain on dispositions (9 ) (7 ) (4 ) (78 ) (98 ) (52 ) (52 ) (18 ) (122 )
Income from discontinued operations (20 ) (33 ) (1,078 ) - (1,131 ) - - - -
Other 116 (308 ) (344 ) 303 (233 ) (133 ) (321 ) 195 (259 )
Net working capital changes 587   (738 ) (90 ) (444 ) (685 ) (55 ) (334 ) 591     202  
Net cash provided by continuing operations 6,251 3,506 3,844 2,811 16,412 2,068 1,974 1,934 5,976
Net cash provided by discontinued operations 74   56   27   -   157   -   -   -     -  
Net Cash Provided by Operating Activities 6,325   3,562   3,871   2,811   16,569   2,068   1,974   1,934     5,976  
 
Cash Flows from Investing Activities
Capital expenditures and investments (3,895 ) (4,246 ) (4,588 ) (4,356 ) (17,085 ) (3,332 ) (2,407 ) (2,174 ) (7,913 )
Working capital changes associated with investing activities 27 57 310 (214 ) 180 (198 ) (480 ) (164 ) (842 )
Proceeds from asset dispositions 48 15 1,371 169 1,603 173 121 29 323
Net sales (purchases) of short-term investments 63 (71 ) (101 ) 362 253 - - - -
Long-term collections from related parties
and other investments 108   65   (484 ) 468   157   43   300   60     403  
Net cash used in continuing operations (3,649 ) (4,180 ) (3,492 ) (3,571 ) (14,892 ) (3,314 ) (2,466 ) (2,249 ) (8,029 )
Net cash used in discontinued operations (38 ) (25 ) (10 ) -   (73 ) -   -   -     -  
Net Cash Used in Investing Activities (3,687 ) (4,205 ) (3,502 ) (3,571 ) (14,965 ) (3,314 ) (2,466 ) (2,249 )   (8,029 )
 
Cash Flows from Financing Activities
Net issuance (repayment) of debt (450 ) - (55 ) 1,485 980 (57 ) 2,493 (30 ) 2,406
Issuance of company common stock (32 ) 78 (19 ) 8 35 (34 ) (12 ) (23 ) (69 )
Dividends paid (855 ) (856 ) (907 ) (907 ) (3,525 ) (910 ) (909 ) (922 ) (2,741 )
Other (17 ) (11 ) 8   (44 ) (64 ) (18 ) (17 ) (15 )   (50 )
Net cash provided by (used in) continuing operations (1,354 ) (789 ) (973 ) 542 (2,574 ) (1,019 ) 1,555 (990 ) (454 )
Net cash provided by (used in) discontinued operations -   -   -   -   -   -   -   -     -  
Net Cash Provided by (Used in) Financing Activities (1,354 ) (789 ) (973 ) 542   (2,574 ) (1,019 ) 1,555   (990 )   (454 )
 
Effect of Exchange Rate Changes (10 ) 54   (130 ) (128 ) (214 ) (133 ) 86   (95 )   (142 )
 
Net Change in Cash and Cash Equivalents 1,274 (1,378 ) (734 ) (346 ) (1,184 ) (2,398 ) 1,149 (1,400 ) (2,649 )
Cash and cash equivalents at beginning of period 6,246   7,520   6,142   5,408   6,246   5,062   2,664   3,813     5,062  
Cash and Cash Equivalents at End of Period 7,520   6,142   5,408   5,062   5,062   2,664   3,813   2,413     2,413  
 
 
CAPITAL EXPENDITURES AND INVESTMENTS
 
Alaska 415 390 369 390 1,564 402 379 304 1,085
 
Lower 48 1,312 1,385 1,656 1,701 6,054 1,372 882 756 3,010
 
Canada 622 515 613 590 2,340 455 272 160 887
 
Europe 596 656 660 609 2,521 500 367 363 1,230
 
Asia Pacific and Middle East 848 1,094 1,077 858 3,877 488 432 551 1,471
 
Other International 67 172 164 136 539 83 43 13 139
 
Corporate and Other 35   34   49   72   190   32   32   27     91  
Total capital expenditures and investments 3,895   4,246   4,588   4,356   17,085   3,332   2,407   2,174     7,913  
Capital expenditures and investments for Nigeria: 22 28 9 - 59 - - - -

4 of 8

2014   2015
1st Qtr 2nd Qtr   3rd Qtr   4th Qtr   YTD   1st Qtr   2nd Qtr   3rd Qtr   4th Qtr YTD  
TOTAL SEGMENTS            
 
 
Production
Total (MBOED)
Continuing operations, including equity affiliates 1,532 1,557 1,481 1,589 1,540 1,610 1,595 1,554 1,586
Discontinued operations (Nigeria) 36   37   14   -   21   -   -   -     -  
Total, including equity affiliates 1,568   1,594   1,495   1,589   1,561   1,610   1,595   1,554     1,586  
 
Crude Oil (MBD)
Consolidated operations 581 576 542 605 576 603 589 558 583
Equity affiliates 18   20   19   18   19   19   19   19     19  
Total continuing operations 599   596   561   623   595   622   608   577     602  
Discontinued operations (Nigeria) 8   9   4   -   5   -   -   -     -  
Total 607   605   565   623   600   622   608   577     602  
Over (under) lifting of crude oil (MBD)* (16 ) 4   15   6   2   17   17   32     22  
*Includes continuing and discontinued operations.
 
NGL (MBD)
Consolidated operations 152 159 149 145 151 148 152 148 149
Equity affiliates 7   8   8   7   8   7   8   8     8  
Total continuing operations 159   167   157   152   159   155   160   156     157  
Discontinued operations (Nigeria) 3   3   1   -   1   -   -   -     -  
Total 162   170   158   152   160   155   160   156     157  
 
Bitumen (MBD)
Consolidated operations 13 14 9 13 12 12 12 12 12
Equity affiliates 111   114   115   128   117   144   126   145     138  
Total 124   128   124   141   129   156   138   157     150  
 
Natural Gas (MMCFD)
Consolidated operations 3,432 3,482 3,315 3,524 3,438 3,498 3,514 3,316 3,441
Equity affiliates 469   516   518   516   505   561   622   668     618  
Total continuing operations 3,901   3,998   3,833   4,040   3,943   4,059   4,136   3,984     4,059  
Discontinued operations (Nigeria) 149   151   54   -   88   -   -   -     -  
Total 4,050   4,149   3,887   4,040   4,031   4,059   4,136   3,984     4,059  
 
Industry Prices
Crude Oil ($/BBL)
WTI 98.75 103.05 97.48 73.41 93.17 48.56 57.84 46.37 50.92
WCS 75.55 82.94 76.99 58.90 73.60 33.86 46.25 33.10 37.74
Brent dated 108.22 109.63 101.85 76.27 98.99 53.97 61.92 50.26 55.39
JCC ($/BBL) 112.78 111.40 109.59 110.37 111.04 89.63 55.45 59.63 68.23
Natural Gas ($/MMBTU)
Henry Hub first of month 4.94   4.68   4.07   4.04   4.43   2.99   2.65   2.77     2.80  
 
 
Average Realized Prices
Crude Oil ($/BBL)
Consolidated operations 101.71 103.48 96.65 71.34 92.84 48.02 57.94 46.37 50.79
Equity affiliates 97.82   100.80   96.03   70.40   91.48   49.14   59.93   47.55     52.21  
Total continuing operations 101.59   103.39   96.63   71.31   92.80   48.05   58.00   46.41     50.83  
Discontinued operations (Nigeria) 108.81   113.07   107.74   -   110.61   -   -   -     -  
Total 101.69   103.53   96.67   71.31   92.94   48.05   58.00   46.41     50.83  
 
NGL ($/BBL)
Consolidated operations 44.86 38.71 36.26 29.75 37.45 18.54 18.63 14.67 17.27
Equity affiliates 79.91   68.84   67.13   54.09   67.20   38.80   38.24   31.26     36.05  
Total continuing operations 46.52   40.36   37.83   31.07   38.99   19.60   19.62   15.54     18.24  
Discontinued operations (Nigeria) 12.99   14.55   11.49   -   13.41   -   -   -     -  
Total 45.85   39.93   37.66   31.07   38.71   19.60   19.62   15.54     18.24  
 
Bitumen ($/BBL)
Consolidated operations 61.69 68.00 64.95 46.57 60.03 24.31 39.74 22.67 29.13
Equity affiliates 55.85   65.55   62.30   36.85   54.62   16.60   32.66   17.16     21.57  
Total 56.47   65.82   62.49   37.76   55.13   17.22   33.30   17.53     22.17  
 
Natural Gas ($/MCF)
Consolidated operations 7.15 6.29 5.46 5.51 6.10 4.28 3.80 3.78 3.96
Equity affiliates 10.43   10.46   9.11   9.24   9.79   7.48   4.42   4.37     5.31  
Total continuing operations 7.55   6.82   5.96   5.98   6.57   4.72   3.90   3.87     4.16  
Discontinued operations (Nigeria) 2.69   2.46   2.26   -   2.53   -   -   -     -  
Total 7.37   6.66   5.91   5.98   6.48   4.72   3.90   3.87     4.16  
 
 
Exploration Expenses ($ Millions)
Dry holes 23 145 86 350 604 271 157 148 576
Leasehold impairment 46   189   179   148   562   40   245   377     662  
Total noncash expenses 69 334 265 498 1,166 311 402 525 1,238
Other (G&A, G&G and lease rentals)* 227   183   194   275   879   171   147   536     854  
Total exploration expenses 296   517   459   773   2,045   482   549   1,061     2,092  
*3Q 2015 includes Gulf of Mexico deepwater drillship termination expense.
 
U.S. exploration expenses 150   242   340   370   1,102   220   153   772     1,145  
International exploration expenses 146   275   119   403   943   262   396   289     947  
 
DD&A ($ Millions)
Alaska 132 135 123 135 525 140 158 183 481
Lower 48 829 939 982 953 3,703 952 1,073 1,062 3,087
Canada 232 238 236 218 924 199 217 200 616
Europe 404 421 427 546 1,798 417 481 484 1,382
Asia Pacific and Middle East 268 310 300 390 1,268 399 374 313 1,086
Other International 1 - 2 4 7 - - 1 1
Corporate and Other 26   27   26   25   104   24   26   28     78  
Total DD&A 1,892   2,070   2,096   2,271   8,329   2,131   2,329   2,271     6,731  

5 of 8

2014   2015
1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   YTD   1st Qtr   2nd Qtr   3rd Qtr   4th Qtr YTD  
PRODUCTION              
 
 
Crude Oil (MBD)
Alaska 175 170 139 164 162 163 154 144 154
Lower 48 171 191 191 199 188 198 209 213 207
Canada 13 12 13 13 13 14 13 12 13
Norway 96 89 89 91 91 88 91 90 90
United Kingdom 39   37   30   33   35   32   29   26     29  
Europe 135   126   119   124   126   120   120   116     119  
Australia/Timor-Leste 12 9 8 10 9 9 10 9 9
China 58 50 46 46 50 53 46 41 46
Indonesia 10 7 7 5 7 9 8 5 7
Malaysia 6 10 11 23 13 37 29 18 28
Equity affiliates 14   16   15   14   15   15   15   15     15  
AP/ME 100   92   87   98   94   123   108   88     105  
Libya 1 1 8 21 8 - - - -
Equity affiliates 4   4   4   4   4   4   4   4     4  
Other International 5   5   12   25   12   4   4   4     4  
Total continuing operations 599   596   561   623   595   622   608   577     602  
Discontinued operations (Nigeria) 8   9   4   -   5   -   -   -     -  
Total 607   605   565   623   600   622   608   577     602