Conoco Phillips' (NYSE:COP) plan to spinoff its downstream assets will leave the company as the largest pure play exploration and production company as measured by production or reserves. The company offers investors exposure to a range of oil and gas assets across the globe.
TUTORIAL: The Industry Handbook: The Oil Services Industry
What Do Investors Get?
Conoco Phillips reported total proved reserves of 8.3 billion barrels of oil equivalent (BOE) at the end of 2010. These reserves are spread across various regions of the world, with 44% of proved reserves in the United States and 21% in Canada.
Conoco Phillips has nearly half of its United States proved reserves located in Alaska, where the company owns a 36.1% interest in the Prudhoe Bay field, the largest producing oil field in the United States. The field is operated by BP (NYSE:BP) and partly owned by Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX).
Conoco Phillips reported average production of 1.752 million BOE per day in 2010, with the United States and Canada accounting for 39% and 16% of production, respectively. Europe is another important area for Conoco Phillips and the company's operations in Europe generated 20% of production in 2010.
Conoco Phillips has budgeted $28 billion in total capital in 2011 and 2012 to explore and develop its extensive portfolio, and an additional $14 billion to $15 billion each year through 2015.
Lower 48 States
One area that Conoco Phillips is working on in 2011 is the development of the Eagle Ford Shale in Texas, where the company has assembled a 220,000 net acre position. The company plans to spend $1.4 billion in capital here in 2011 and drill 144 gross wells during the year.
Conoco Phillips is also spending another $600 million in 2011 to develop other conventional and shale assets in the United States. These areas include the Bakken, Permian and Barnett areas.
Conoco Phillips has most of its Canadian production from legacy natural gas assets in Western Canada. The company is also involved in developing various oil sands projects in Alberta, and is part of the FCCL Oil Sands Partnership with Cenovus Energy (NYSE:CVE). The partnership has long-term plans to boost production from several different oil sands projects to 500,000 BOE per day.
In Europe, the company's assets are located mostly in the United Kingdom and Norway, with both of these areas generating approximately 175,000 BOE per day of production in 2010. The largest producing asset in Norway is from four fields that make up the Greater Ekofisk Area.
The Greater Ekofisk Area provided production of 93,000 BOE per day in 2011, with Conoco Phillips as the operator of the field. Both Statoil (NYSE:STO), Total (NYSE:TOT) and Eni (NYSE:E) also have an interest in this field.
The Bottom Line
Conoco Phillips will be an immense exploration and production company with assets diversified both geographically and by commodity after the spin off of the company's refining and marketing segment.
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
Stock AnalysisUnderstand why energy companies' stock are volatile when oil prices are volatile. Learn about the top five energy companies to buy and hold.
InvestingCommodity prices have been heading lower for more than four years, being the worst performing asset class of 2015 with more losses in cyclical commodities.
Stock AnalysisHere are five stocks that pay safe dividends and should be at least somewhat resilient to a bear market.
InvestingThe further you fall, the harder it is to climb back up. It’s a universal truth that is painfully apparent in the investing world.
InvestingWest Texas Intermediate oil futures have recently made pronounced movements. What do they bode for the world market?
InvestingGrowing global demand for quinoa has impacted Bolivian farmers' way of life. Should the American consumer be wary of buying this product?
MarketsDepressed crude oil prices are here to stay for the foreseeable future. Here's how it will affect an oil industry riddled with unsustainable debt.
Fundamental AnalysisOptions market trading data can provide important insights about the direction of stocks and the overall market. Here’s how to track it.
Stock AnalysisCan these two oil stocks buck the trend?
Investing NewsAlcoa plans to split into two companies. Is this a bullish catalyst for investors?
Discounted cash flow (DCF) analysis can be a very helpful tool for analysts and investors in equity valuation. It provides ... Read Full Answer >>
When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>
The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
Since the fixed charge coverage ratio indicates the number of times a company is capable of making its fixed charge payments ... Read Full Answer >>
A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>