ConocoPhillips plans to pump more while spending less
Higher energy prices lifted quarterly profit. But more cash is going into investment and shareholder payouts, sharpening the test for 2027.
ConocoPhillips plans to get more oil and gas from its portfolio in 2027 while modestly reducing capital spending. Management points to more efficient U.S. wells and new projects to help deliver growth without a bigger investment bill.
The shareholder commitment is growing, too. The company raised its quarterly dividend 11% to 93 cents a share and expects share buybacks to increase again in the fourth quarter. It aims to return 45% of its cash from operations to shareholders in both 2026 and 2027.
Prices did the heavy lifting
Third-quarter adjusted profit nearly doubled from a year earlier to $3.92 billion. That measure removes selected tax, restructuring and other special items. Reported net income was $4.00 billion.
The company received an average of $61.40 per barrel of oil equivalent, a common measure combining oil and gas, against $46.44 a year earlier. Production averaged 2.302 million barrels of oil equivalent a day, within its August forecast but below the year-earlier level. Higher net royalties at Canada's Surmont operation and constrained output in Qatar offset growth from new U.S. wells.
More cash goes to investment and payouts
ConocoPhillips' cash-flow measure removes working-capital movements, such as changes in customer receivables and unpaid bills. On that basis, cash generation was almost unchanged from the second quarter, while capital spending and share repurchases increased.
Research by Ticker Byline shows that subtracting capital spending, dividends and buybacks from that cash-flow measure left $631 million in the third quarter, down from $1.13 billion in the second quarter. That is a 44% decline in the amount left after those uses.
Asset sales brought in a separate $1.57 billion during the quarter. Unrestricted cash and short-term investments totaled $9.93 billion at September 30.
The wells and projects behind the plan
Management said longer wells and preparing several wells for production at once could support growth with steady U.S. activity. The early 2027 outline calls for low-single-digit underlying production growth and lower operating costs per unit.
A new production pad at Surmont should also contribute next year. Management expects Qatar's North Field East LNG project to start in the first half of 2027, while regional operating and shipping conditions continue to constrain existing output. It also looks for commercial cash flow from Port Arthur LNG.
The detailed 2027 budget has yet to be announced. For 2026, the capital-spending range remains $12 billion to $12.5 billion.
Our ConocoPhillips company profile tracks its financial history, investment plans and major projects.