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F500-2023-049-ConocoPhillips

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</ul>

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G500-2020-348-ConocoPhillips

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F500-2020-093-ConocoPhilips

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Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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The corporate history of ConocoPhillips traces back to 1875, when early precursors of today’s energy giant transported kerosene by rail to pioneers in the Mountain West. The firm’s current name comes from a 2002 merger between Phillips Petroleum and Conoco. Headquartered in Houston, ConocoPhillips extracts, processes, and transports a variety of fuels, including petroleum, natural gas, and bitumen. The company has operations in more than a dozen countries, with the bulk of its production in the United States, particularly Alaska. Other sites of production include Canada, Norway, Australia, and Southeast Asia.

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Q4 2024

ConocoPhillips (COP): Company Profile, Stock Price, News, Rankings

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ConocoPhillips

conocophillips

Welcome to the Fourth Quarter twenty twenty four ConocoPhillips Earnings Conference Call. My name is Liz, and I will be your operator for today's call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. I will now turn the call over to Phil Gresh, Vice President, Investor Relations.

Thank you, Liz, and welcome everyone to our fourth quarter twenty twenty four earnings conference call. On the call today are several members of the ConocoPhillips leadership team, including Ryan Lance, Chairman and CEO Bill Bullock, Executive Vice President and Chief Financial Officer Andy O'Brien, Senior Vice President of Strategy, Commercial Sustainability and Technology Nick Olds, Executive Vice President, Lower forty eight and Kirk Johnson, Senior Vice President of Global Operations. I also wanted to formally welcome Guy Baber, the former Vice President of Investor Relations for Marathon Oil, who has joined the Investor Relations team here at ConocoPhillips. Ryan and Bill will kick off the call with opening remarks, after which the team will be available for questions. For the Q and A, we'll be taking one question per caller.

A few quick reminders. First, along with today's release, we published supplemental financial materials and a slide presentation, which you can find on the Investor Relations website. Second, during this call, we will make forward looking statements based on current expectations. Actual results may differ due to factors noted in today's press release and in our periodic SEC filings. We will be making some non GAAP financial metric references.

Reconciliations to the nearest corresponding GAAP measure can be found in the release and then on our website. With that, let me turn it over to Ryan.

Thanks, Phil, and let me extend my welcome to everybody for joining our fourth quarter twenty twenty four earnings conference call. '20 '20 '4 was certainly another strong year for ConocoPhillips. We executed well operationally and on a standalone basis delivered 4% production growth year over year, which was above the high end of our full year guidance range. We showed strong performance across the entire portfolio, delivering 5% growth in the Lower 483% growth in Alaska and International on the same basis. And we delivered a 123 preliminary organic reserve replacement ratio in 2024.

Our three year average is now 131%. We also enhanced the portfolio. We closed the acquisition of Marathon in late November, which added high quality, low cost of supply inventory to our portfolio. And we remain confident that we will deliver more than $1,000,000,000 of run rate synergies by the end of twenty twenty five, over half of which is included in our capital guidance. In Alaska, we opportunistically exercised our preferential rights to acquire additional working interests at attractive valuations in Kapark River and Puro Bay units.

We progressed our global LNG strategy through additional regasification and sales agreements into Europe and Asia. And as we announced this morning, we're making solid progress on our planned $2,000,000,000 of asset sales. We have agreements in place to sell non core Lower 40 assets for approximately $600,000,000 before customary adjustments in the first half of twenty twenty five. We continue to deliver on our returns focused value proposition. We generated a trailing twelve month return on capital employed of 14% or 15% on a cash adjusted basis.

We returned $9,100,000,000 of capital to our shareholders, representing 45% of our CFO, consistent with our long term track record and well above our 30% commitment. Now looking ahead to 2025, we remain confident in the plan that we outlined in our third quarter call to deliver low single digit production growth for $12,900,000,000 of CapEx. In the Lower four eighty eight on a pro form a basis, we plan to reduce capital spending by over 15% year over year, while still delivering low single digit production growth. This is primarily due to expected material synergy capture associated with the acquisition of Marathon and significant drilling and completion efficiency gains. We also expect to grow production in Alaska and Canada and we are doing all of this while continuing to invest in differentiated high return longer cycle projects.

Now on these projects, we're making steady progress across the board. We expect 2025 to be the peak year of our long cycle spending at around $3,000,000,000 followed by a steady stream of project startups from 2026 to 2029. Once these projects are all online, we expect $3,500,000,000 of incremental CFO from NFE, Port Arthur, NFS and Willow, all combined at $70 WTI, $10 TTF and $4 Henry Hub. And that leads to roughly $6,000,000,000 of incremental annual sustaining free cash flow relative to 2025. Shifting to shareholder distributions, this morning we announced a target to return $10,000,000,000 back to shareholders this year, assuming current commodity prices.

This consists of $4,000,000,000 of ordinary dividends and $6,000,000,000 in buybacks, positioning us to execute on our objective to retire the equivalent of the shares issued for the Marathon transaction within two to three years, even with lower WTI prices than at the time of the announcement. So in conclusion, once again, I'm proud of the accomplishments of the entire organization. Our portfolio is well positioned to generate competitive returns and cash flow for decades to come. Now let me turn the call over to Bill to cover our fourth quarter performance and 2025 guidance in more detail.

Thanks, Ryan. In the fourth quarter, we generated $1.98 per share in adjusted earnings. Now we had a number of special items in the quarter. The two largest were related to the Marathon acquisition. First, we recorded over $400,000,000 of transaction and integration related expenses.

Now this was mostly offset by over $400,000,000 of tax benefits resulting from utilization of certain foreign tax credits associated with the Marathon acquisition. Both of these items were largely non cash in the quarter and the one time cash benefit will show up as a working capital tailwind in the first quarter of this year. And it is an addition to the NOLs associated with the Marathon acquisition that we expect to recognize over the next few years. The transaction related costs will gradually flow through working capital during 2025 as we achieve our premise synergies. Shifting to fourth quarter operations, we produced 2,183,000 barrels of oil equivalent per day.

This included one month of production from the acquired Marathon assets, which added 126,000 barrels per day to the quarter. Excluding Marathon's production, we achieved 8% underlying growth year over year. This is above the high end of our guidance range. Now inclusive of one month of Marathon, Lower forty eight produced 1,308,000 barrels of oil equivalent per day. And by basin, we produced 833,000 in the Permian, 2 Hundred And 90 6 Thousand in Eagle Ford and 151,000 in The Bakken.

Moving to cash flows, fourth quarter CFO was over $5,400,000,000 and this included over $250,000,000 of APLNG distributions. Operating working capital was a $1,000,000,000 headwind in the quarter, primarily due to normal changes in accounts receivable and accounts payable. Capital expenditures were $3,300,000,000 which included approximately $400,000,000 for spending related to acquisitions that was not premised in guidance. We returned more than $2,800,000,000 to shareholders including just under $2,000,000,000 in buybacks and $900,000,000 in ordinary dividends in the quarter. We also completed a series of strategic debt transactions following the acquisition of Marathon.

Now these transactions simplified our capital structure, extended the weighted average maturity of our portfolio, lowered our weighted average coupon rate and reduced near term maturities. We ended the year with cash and short term investments of $6,400,000,000 and had $1,100,000,000 in long term liquid investments. Turning to guidance, we forecast 2025 production to be in the range of 2,340,000 to 2,380,000 barrels of oil equivalent per day. This takes into account 20,000 barrels per day of planned turnarounds. Turnarounds are expected to be highest in the second quarter with a triennial turnaround at EcoFiska Norway, a turnaround at Qatar and maintenance in Australia.

Then in the third quarter, we will have turnarounds in Alaska. For the first quarter, we expect production to also be in a range of 2,340,000 to 2,380,000 barrels of oil equivalent per day. This guidance reflects a 20,000 per day impact on the full quarter from January weather events. We expect a minimal first quarter impact from turnarounds and that's similar to the fourth quarter. For capital spending, our full year guidance is approximately $12,900,000,000 On Slide eight of the presentation material, we provide a pro form a bridge from 2024 to 2025 with some of the key year over year variables.

In the Lower 48, we expect to reduce spending by approximately $1,400,000,000 And for long cycle projects, we expect to see $400,000,000 increase in spending to roughly $3,000,000,000 in 2025 inclusive of capitalized interest of about $400,000,000 Finally, in Alaska and International, we expect to see a $200,000,000 increase in spending driven by our growth opportunities in Canada and Alaska. Shifting to cost guidance, we expect full year adjusted operating costs to be in the range of $10,900,000,000 to $11,100,000,000 dollars Full year cash exploration expenses are expected to be $300,000,000 and full year DD and A expense is expected to be in the range of $11,300,000,000 to $11,500,000,000 Full year adjusted corporate segment net loss guidance is approximately $1,100,000,000 and we expect our effective corporate tax rate to be in the 36% to 37% range at strip pricing, excluding any one time items with an effective cash tax rate in the 35% to 36% range. Finally, on cash flows, we expect full year APLNG distributions to be about $1,000,000,000 with about $200,000,000 in the first quarter. So to wrap up, ConocoPhillips had a strong year in 2024. We executed well operationally.

We're continuing to deliver on our strategic initiatives across our deep, durable and diverse portfolio and we remain highly competitive on our shareholder distributions. That concludes our prepared remarks. I'll turn it back over to the operator to start the Q and A.

Thank you. We will now begin the question and answer session. You. Our first question comes from the line of Arun Jayaram with JPMorgan.

Yes. Good morning. Good afternoon. Ryan, you outlined a 10% increase in cash return to $10,000,000,000 I'm sure the company scrutinized its approach to cash return in 2025 just given how many price volatility and obviously the recent close of Marathon. But I wanted to see if we get some insights on what drove your ultimate decision in terms of 2025 to give a quantum of cash return and how should we think about potential flex in cash return either higher or lower given potential commodity price changes?

Yes. Thanks, Arun. I think when we set the new strategy for the company way back in 2016, certainly delivering a lot of our significant amount of our cash back to the shareholder. And I think that's something that's important to the company, important to demonstrate. We can continue to do that and I think it's represented in what we kind of set as our target for 2025.

I think as we looked at it, we obviously took a look at the forward curve and where things are developing in 2025. We take our own view. We have lots of commodity markers that drive our CFOs. We go through the course of the year. But I think despite the recent downdrafts in the WTI here over the last month, we felt pretty comfortable at $10,000,000,000 And look, I remind people, we have a lot of torque to the upside on commodity prices.

And look at our past behavior over the number of years, we've been sharing that with our shareholders. A reminder, if you look at the whole company, a good rule of thumb is about $400,000,000 for every dollar of TI movement. So obviously, if we get $5 or $10 of uplift, that's pretty significant cash flow to the company and we typically share that with our shareholders as well. On the downside, look, we've got a strong balance sheet. We ended the year with over, I think, $7,500,000,000 of cash and long term investments.

So we've got a lot of flexibility there. And then as we announced in our prepared remarks, we're on track to dispose of about $2,000,000,000 of non core assets, which gives us a lot of flexibility as we go into 2025. So putting all that together, we felt like $10,000,000,000 was a good place to start. And we'll do like everybody watch the volatility of the market and the commodity price, but feel pretty good about where we started the year.

Our next question comes from the line of Pedro Lopez with Evercore ISI.

Hi, good morning. It's not Pedro, but it's Steve.

Trying a new look. So I was wondering, Ryan,

a little bit in on some of the long cycle CapEx, if we could, and the outlook. Just wondering if you could kind of hit on some of the moving parts around Alaska, Qatar, thoughts on Port Arthur Phase two? And are we right in kind of assuming that your equity outlays on major projects are peaking in 2025? Or is that a misplaced view? Thanks.

Hey, Steve, it's Andy. Maybe I can get that one started. There's a few bits to the question. Maybe I'll start with put up a Phase two and then I'll get to the long cycle capital. So on put up a Phase two, this is a great project.

It was underpinned by a premier developer and a premier EPC company. It's also positive to see a company like Aramco showing an interest in being part of that project. But as we've said before, we took an equity stake in Phase one for unique reasons, which included getting the project off the ground and it came with options on other phases and other projects. So we're very keen to see Phase two get completed as there'll be cost sharing across the common facilities of the two projects. So only our interest to see Phase two go.

But I think it's fair to say our primary focus is on building out our offtake and regas capacity for 10 to 15 MTPA. So maybe that sort of gives you the background on our thinking on quarter after Phase two. Then moving to the major project capital and the pace of decline of $3,000,000,000 As we said in our prepared remarks, our capital guidance for the year is $12,900,000,000 and that includes the $3,000,000,000 of long cycle project spend of which there's $400,000,000 of capitalized interest. As we said, 2025 is expected to be the peak spend as we undertake the biggest winter construction season in Willow. So if you look past 2025, we are going to see the major project spend step down each year.

At the same time, we'll start to see the projects coming online, delivering on our expected cash flow and free cash flow improvements. And the first one of those will be NFE in 2026. So that will be followed by Port Arthur, then NFS and then we'll have Willow in 2029. So there'll be a steady drumbeat of these projects coming on. But I think the key point I want you to take away is that, yes, absolutely, we see this year as the peak spend in these projects.

And I would add, Steve, and that we try to say that in our opening remarks, look, this is coming and there's going to be a steady beat of project startups as Andy described and it's kind of a 70 TI, dollars 10 TTF, dollars 4 Henry Hub kind of price tag that results in $3,500,000,000 or more of CFO, but more importantly, over $6,000,000,000 of free cash flow coming relative to our 2025 starting point. So all that starting to materialize and is out there. And these are great projects, low cost supply, competitive in the portfolio and lead to the long term growth and development of the company, which we're quite excited about.

Our next question comes from Doug Leggate with Wolfe Research.

Hey, good morning, everybody. Ryan, nothing short of spectacular performance in the Lower 48. And my question is that when you laid out a ten year plan, you talked about low single digit growth and I think you're up 10% year over year, 4% sequentially in the third and fourth quarter. And I have to imagine as productivity gains, as efficiencies, it's all the things that you talked about. My question is, do you accept that production growth on a go forward basis or do you trim activity levels and reduce your capital?

I'm just trying to understand what the philosophy is as to how you respond to the extraordinary delivery you've had in your portfolio?

Yes. Thanks, Doug. A huge shout out to Nick and his team there. They keep delivering some amazing efficiencies with the horizontals, the larger well pads and just the frac and drilling efficiencies that we experienced are really good. I know it's a little trite, I guess, production growth is a bit of an outcome from our plans.

But I think the way we kind of look at it is we think about planning cycle year over year and we got the great addition of the Marathon assets, which gave us another two plus billion barrels of resource, sub-forty dollars cost of supply. So we get to integrate that into our plans and we build significant scale and scope, primarily Bakken in the Eagle Ford, but additional scope in the Permian as well. So we step back a minute, what we look at is trying to keep driving that efficiency that Nick's team is delivering for the company. So if you think about it, do you want to lay down some extra frac spreads? Well, all that does is end up building more DUCs than we need to build.

And you go the opposite way and say, well, why don't we cut out a couple of rig lines? And that just creates a problem on the frac spread where we got to take frac holidays and we shut frac crews down for three or four months just to keep all things balanced. So we're trying to operate within this efficient operating window and the Marathon transaction just gave us the opportunity to reset optimized plateaus across both the Bakken and the Eagle Ford. So we kind of approach it that way. We try to set a reasonable scope going into the year that doesn't allow us to whipsaw the organization both up or down and then we try to take a look at what kind of production growth comes out of that.

So it truly is an output for the plans trying to keep driving that efficiency. And I remind people back in 2022, AIM, we thought we'd be adding two, three, four rig lines a year to get the kind of growth that we're seeing. We haven't done we haven't added a single rig line over this timeframe. So it's all driven around the efficiency. Now I think the point you're getting at is, when is in a macro that's growing maybe 1%, one point five % is the growth too much.

I think we do try to take a look at that at the end of the day, but it's really trying to drive for capital efficiency and returns on the capital that we're getting. And we just don't want to upset that efficient machine one way or the other.

Our next question comes from Lloyd Byrne with Jefferies.

Hey, good afternoon, Ryan, Bill, team. I really appreciate your comments on cash flow and CapEx. It looks to us as though consensus is embedding almost flat capital and no production growth into the future. So I think that's important. I know you answered some of it.

I just can we go back and go through what you would think is a theoretical maintenance capital number as you look out? And I'm also thinking about how efficient you've been in replacing dollars per proved develop in The U. S.

Hi, it's Sandy. I can take that one. And I think you started it off for me that thinking of sustaining capital, it is a bit philosophical because it does require being in a sustaining world. So maybe I'll try and sort of triangulate on a couple of different ways for you. So if you were to take our 2025 capital of $12,900,000,000 as we just cleared that includes $3,000,000,000 of pre productive capital and we're still growing the underlying business low single digits.

So if you're able to normalize that out sort of in round numbers, you get to about $9,000,000,000 in the current commodity price environment if we were trying to just stay flat. Back at our investor meeting in 2022, we gave a different data point, which was to say, we could basically, I mean, our sustaining capital would be $6,000,000,000 but that was in a sustaining world at a $40 price. Now the company has changed a lot since then. We've grown with the acquisitions and our organic growth. So if you were to add Marathon organic growth, the Cermont acquisition, we'd be closer to about $7,500,000,000 on an apples to apples in a $40 world right now.

But it is, as I said, this is kind of hypothetical, you've got to be in sort of a sustaining world before you really you contemplate doing these kind of things. But if you're trying to model it, so hopefully that's given you a couple of different ways to sort of triangulate on the same answer.

Our next question comes from the line of Betty Jiang with Barclays.

Good afternoon. Thank you for taking my question. Maybe just want to add a bit more color on the Lower 48, maybe from the CapEx side. In the slide that I show the $1,400,000,000 reduction in the pro form a CapEx, Marathon Synergy accounted for $500,000,000 of that reduction. But could you just give a bit more color on what are the other drivers?

How much of it is efficiency gains that's lowering well cost? And how much of it is development optimization that's perhaps driving a lower overall activity level? And then just if I step back for a bit, if you maintain at this CapEx level, does that mean you would be able to deliver the same low single digit growth that you outlined before because of all the synergies and optimization that you're seeing with Maragon? Thanks.

Well, good morning, Betty. This is Nick. Let me walk you through the few key components related to that $1,400,000,000 that you mentioned. And there's it's really around the operational improvements that Ryan was mentioning. It's that meaningful synergy capture of the $500,000,000 that we talked about and there's modest deflation as well.

So if I first start with the operational improvement, this is a well established and demonstrated track record last two point five years. The team continues to do more with less and just hats off to the team that are calling in today. We demonstrated this in 2024 with similar rig and frac activity counts. We delivered 15% more scope. That means more feet drilled, more stages per day, but most importantly, it's more wells online and you're seeing that through the bottom line production as we look into Q3 and Q4.

Now we're going to apply the same model, those operating efficiencies in a level loaded steady state development program to the Marathon assets. So we see those efficiency improvements coming forward and that is a key component of the material synergy capture of the $500,000,000 Now within the synergies itself, in addition to those efficiencies, you've got items like moving on to common contracts, designs around facilities, different well programs, mud programs that are also in there. Now, in addition to shifting to our steady state development program, and if you recall, Heritage Marathon were typically very front end weighted with their activity and then ramp down Q3, Q4. We're moving to that over time, but we're also moving our legacy positions in Eagle Ford and Bakken to an optimum plateau and we'll reassess this as we integrate those assets. So that's another big driver.

So you can think about you got the efficiencies, you got material synergy capture, you got activity optimization and then we expect modest deflation in 2025 as well around $200,000,000 So all that gets you to the $1,400,000 Now related to production and continuing on with that, we've looked at we've kind of demonstrated over the last two point five years at flat activity, we can grow the Lower 48 business. We have the teams that continue to drive operating efficiencies and we do see that for years to come at flat activity.

Our next question comes from the line of Devin McDermott with Morgan Stanley.

Hey, good morning. Thanks for taking my question. I wanted to circle back to Alaska. Willow is a big portion of the major capital project spending and we're in the peak construction season right now. So I

of an update on some of the near term milestones and remind us of the cadence we're spending on that project over the next few years. And maybe just stepping back, Alaska has gotten a lot of attention from the Trump administration so far and even had its own executive order. So more broadly, could you remind us how you're thinking about the Western North Slope opportunity set and whether or not the policy environment creates more of an opportunity to move forward with some of this over the next few years? Thanks.

Yes. Good morning, Devin. This is Kirk. Yes, there's a few things certainly in there to unpack. I'll start with Willow, as you did.

I'm certainly happy to report that the progress we made here last year, certainly inclusive of fourth quarter and even just this last month here in 2025 allows me to say we're really on trend with the progress that we've been making and you've been hearing from me report out simply that project team there in Alaska just continues to hit all the key milestones that we've laid out certainly since taking FID back in late twenty twenty three. When I think about certainly the work that was underway in fourth quarter and even just this last month in January, The initial mobilization of that of our winter construction season certainly that you point out is our largest for the project has really gone quite well. So we got a quick and early start. We got some cold weather. Ice road construction activities are, dare I say, modestly ahead of plan, which is really nice for us.

It puts us in a position of taking full advantage of the full winter season knowing that we may certainly have a little bit of weather in front of us. And again, to the note of this is the largest winter construction season, we're in a great position of building on all the activity that we accomplished here last year. Again, this is a peak year of ice road construction. It's from those ice roads that we're building gravel roads, gravel pads that allows us to from those ice roads build our pipeline networks. And then we've got a few unique activities as well here planned this winter season.

Think bridge construction, as well as some horizontal directional drills for pipeline crossing. So again, lots to do. And then you even go into the operation modules that you heard me speak about last year. We floated those, barged those up to Alaska, landed those and onshore those during the ice free season. And those are I've got report outs just this last month that those are moving across into the Willow development area.

So we're using crawlers to get those into that new pad. So again, some really good progress. We landed our contracts, engineering is on track. That puts us in a great position for full fabrication across the entirety of this year. So all that culminates again, Devin, into this peak year of spend, which is why we're guiding to an expectation of project capital being roughly $500,000,000 more than we spent in 2024.

And then last, I might just help you all a little bit as well. We're thinking about all of that spend and manifesting and probably close to a third of our total annual spend expectation here in 2025 showing up in the first three to four months of this year. And then so naturally then we expect the capital this year to stair step down into second, third and fourth quarter. And then you'd expect the same trend from us when we think about the total project spend, the balance of what we've that we've guided on for the first couple of years post FID, that will continue to stair step down with very little if any spend in 2029, which is when we're expecting first oil. So again, great progress here.

Look forward to continued hitting a milestones for our Willow project here in 2025. And then lastly, yes, there's certainly been quite a bit of press out there around NPRA. And I would probably back up just a little bit to say, first and foremost, I think it's important for me to emphasize that the ruling that came out on NPRA here from the prior administration doesn't affect any of the activities that we're doing up there, whether it's in Kaparik, Western North Slope or even Willow. But we did take issue as did the state and certainly other stakeholders with that ruling. And so we were pleased to see that President Trump and that administration issued an executive order to in essence reverse what came about here late last year.

So we recognize that's going to take a little bit of time here this year. But yes, we're looking forward to partnering with the Department of Interior and especially with the State of Alaska. Fundamentally, we believe that continued exploration West Of Willow, it's the right thing to do for energy, it's the right thing to do for the State of Alaska and its stakeholders. And clearly, we're in a really good position. We're putting ourselves in a position to continue exploring West DeWillow as that's enabled for us.

Our next question comes from the line of Neil Mehta with Goldman Sachs.

Good morning, Ryan and team or good afternoon. I just love your perspective on Slide four, specifically around reserve replacement. There's been some discussion about how investors should interpret this number and it's one where you appear to do pretty well on over the last couple of years. So just your thoughts on where you've been able to drive that reserve replacement, any geographies in particular that you want to call out and how we should interpret the statistic?

Yes. Good morning, Neil. This is Andy. We agree that we know we still think that reserves and reserve placements is a really important metric to measure us and to measure oil and gas companies by. So yes, we're really pleased that we're delivering yet another strong organic reserves replacement ratio this year.

As we said in the prepared remarks, that's 123%. A bit of color I can add to that. We're doing that while growing our annual production and also in an environment where prices fell, which that part results in downward revisions due to market factors. So we're particularly pleased that given that we're still having above 100% reserve replacements. Now specifically to where it's coming from, again, I'm pretty pleased here in terms of the balance we have.

Our lower 48 organic reserve replacement ratio, excluding market factors was over 100 again. We were able to make the first initial booking on the NFS project. And then now that we have ownership of the ownership of Cermont, we're progressing Cermont development plans with new pads, so we were able to do some bookings there. They're kind of I'd say the three big levers that I'd point to. You'll see more detail when we publish the K.

So that's how we got to 123 organic. And then with the additions from the Maffen acquisition and the additional workings in Alaska, the total reserve replacement ratio was two forty four percent. So when you put all that together, we're showing for twenty twenty four reserves of $7,800,000,000 Boe, that's up $1,000,000,000 from last year and our RTP is improving from ten years to ten point seven years. And then one other little thing I'd add is that given the math and transaction closed so late in the year, the bookings we've got from Maastan primarily represent the proved developed reserves with minimal PUD bookings. So the teams right now are working through integrated pro form a five year plans.

And once that's finalized, we'd actually expect to make an additional HUD booking later this year. So again, yes, another very healthy year and a good sort of a good milestone for us in terms of achieving greater than 100% again.

Our next question comes from Ryan Todd with Piper Sandler.

Good. Thanks. Maybe one on divestitures. You've announced $600,000,000 of asset sales relative to a target of $2,000,000,000 Can you maybe talk about that program ongoing going forward, the market and appetite for the divestiture efforts and within that maybe the ongoing discussions around the Port Arthur Equity sell down?

Sure. This is Andy. I'm happy to take that one. So as you said, we've had activities well underway on multiple fronts now with disposition candidates. As we announced today, we signed PSAs for about $600,000,000 That's non core Permian assets and we expect those to close in the first half of the year.

We've actually reflected this in our guidance. So that's part of what's in our guidance this year. We've also got activity progressing well on other fronts. So we'd actually expect the majority of the $2,000,000,000 to be achieved in 2025. So we're really pleased with the progress we're making there.

You specifically asked about Port Alpha Phase one. We've talked about this one a number of times in the past. As we said before, we took equity in Phase one for unique reasons, which included getting the project off the ground. I think it came with options and other phases of projects for us. So it was a unique reason why we invested in that project.

But the project is now well into execution. We don't necessarily need to be an equity owner forever in that project. But we also we can be patient. We don't need to rush anything here as the project is using project financing to fund construction now. So another way to look at that is that we will continue to de risk the project every day without additional capital contribution.

So it's an asset we look at. We've had inbounds on that asset and it's one that we'll consider over time. But we feel very confident about the $2,000,000,000 target we put out there and we feel good about achieving that this year.

Our next question comes from the line of Bob Brackett with Bernstein.

Good morning. Some of your peers have talked about opportunities in U. S. Datacenter power demand, either supplying feedstock gas or in fact setting up power demand via CCGTs.

a more global LNG approach. Can you talk about comparing and contrasting those strategies and maybe highlight anything interesting you might be doing on the domestic power demand side?

Yes. Thanks, Bob. We like a lot of people have been studying it. We're also getting inbounds on the power side like a lot of people, primarily because we obviously have a lot of natural gas and we're producing. We have a commercial power desk, so we buy and sell power all over The U.

S. We have a large land position throughout The U. S. So there's some natural advantages that we have in that space and we're looking at them and trying to assess some of those inbounds. It's another way to potentially monetize a lot of gas that maybe would get a lower Waha kind of a wellhead price.

We've you talked about our main sort of thrust is in the LNG space. The way I would describe that is we're bullish gas volumes in North America, but we're bearish price. So it's a great way to take advantage of those molecules and move them to higher valued markets through that LNG channel, which we've described to everybody. But the power requirements are going to be going up. Certainly, these hyperscalers, data centers are going to need opportunities for fast and cheap power.

So and we sit in an area in the Permian Basin that kind of fits a lot of those kinds of attributes. So we're looking at it. Can it scale to a really big business in the company? I don't know. But we're looking at those opportunities, but it's first and foremost kind of fit our framework.

We've talked about what our financial framework is and its power is no different. It's got to be competitive for capital, but certainly looks like some growth opportunities potentially coming and we're assessing some of those opportunities right now.

Our next question comes from the line of Scott Hanold with RBC Capital Markets.

ConocoPhillips (COP) Q4 2024 Earnings Call Transcript

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