filings.toolsConocoPhillips 10-Q 2021-09-30
Filed 2021-11-04. 7 sections, 191K characters. Original on sec.gov · Markdown · JSON
Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM
10-Q
(Mark One)
[X]
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended
September 30, 2021
or
[ ]
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission file number:
001-32395
ConocoPhillips
(Exact name of registrant as specified in its charter)
Delaware
01-0562944
(State or other jurisdiction of incorporation or
organization)
(I.R.S. Employer Identification
No.)
925 N. Eldridge Parkway
,
Houston
,
TX
77079
(Address of principal executive offices)
(Zip Code)
-
293-1000
(Registrant's telephone number,
including area code)
Securities registered pursuant to
Section 12(b) of the Act:
Title of each class
Trading symbols
Name of each exchange on which registered
Common Stock, $.01 Par Value
COP
New York Stock Exchange
7% Debentures due 2029
CUSIP—718507BK1
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant
was required to
file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
[x]
No [
]
Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to
be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
such shorter period that
the registrant was required to submit such files).
Yes
[x]
No [
]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated
filer, a non-accelerated
filer, a smaller
reporting company, or
an emerging growth company.
See the definitions of “large accelerated filer,”
“accelerated filer,”
“smaller
reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange
Act.
Large accelerated filer
[x]
Accelerated filer [
]
Non-accelerated filer [
]
Smaller reporting company
[ ]
Emerging growth company
[ ]
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the
extended transition period for
complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. [
]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes [
] No
[x]
The registrant had
1,318,946,867
shares of common stock, $.01 par value, outstanding at September 30,
Table
of Contents
Page
Consolidated Statement of Comprehensive Income
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
Item 2. Management’s Discussion and Analysis of Financial Condition and
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Commonly Used Abbreviations
ConocoPhillips
2021 Q3 10-Q
Commonly Used Abbreviations
The following industry-specific, accounting
and other terms, and abbreviations may
be commonly used in this
report.
Currencies
Accounting
$ or USD
U.S. dollar
ARO
asset retirement obligation
CAD
Canadian dollar
ASC
accounting standards codification
EUR
Euro
ASU
accounting standards update
GBP
British pound
DD&A
depreciation, depletion and
amortization
Units of Measurement
FASB
Financial Accounting Standards
BBL
barrel
Board
BCF
billion cubic feet
FIFO
first-in, first-out
BOE
barrels of oil equivalent
G&A
general and administrative
MBD
thousands of barrels per day
GAAP
generally accepted accounting
MCF
thousand cubic feet
principles
MBOD
thousand barrels of oil per day
LIFO
last-in, first-out
MM
million
NPNS
normal purchase normal sale
MMBOE
million barrels of oil equivalent
PP&E
properties, plants and equipment
MMBOD
million barrels of oil per day
SAB
staff accounting bulletin
MBOED
thousands of barrels of oil
VIE
variable interest entity
MMBOED
equivalent per day
millions of barrels of oil equivalent
per day
MMBTU
million British thermal units
Miscellaneous
MMCFD
million cubic feet per day
EPA
Environmental Protection
Agency
ESG
Environmental, Social and
Corporate Governance
Industry
EU
European Union
CBM
coalbed methane
FERC
Federal Energy Regulatory
E&P
exploration and production
Commission
FEED
front-end engineering and design
GHG
greenhouse gas
FPS
floating production system
HSE
health, safety and environment
FPSO
floating production, storage
and
ICC
International Chamber of
offloading
Commerce
G&G
geological and geophysical
ICSID
World Bank’s
International
JOA
joint operating agreement
Centre for Settlement of
LNG
liquefied natural gas
Investment Disputes
NGLs
natural gas liquids
IRS
Internal Revenue Service
OPEC
Organization of Petroleum
OTC
over-the-counter
Exporting Countries
NYSE
New York Stock Exchange
PSC
production sharing contract
SEC
U.S. Securities and Exchange
PUDs
proved undeveloped reserves
Commission
SAGD
steam-assisted gravity
drainage
TSR
total shareholder return
WCS
Western Canada Select
U.K.
United Kingdom
WTI
West Texas
Intermediate
U.S.
United States of America
Financial Statements
ConocoPhillips
2021 Q3 10-Q
PART
I.
Financial Information
Item 1. Financial Statements
Financial Statements
Consolidated Income Statement
ConocoPhillips
Millions of Dollars
Three Months Ended
Nine Months Ended
September 30
September 30
2021
2020
2021
2020
Revenues and Other Income
Sales and other operating revenues
$
11,326
4,386
30,708
13,293
Equity in earnings of affiliates
Gain (loss) on dispositions
(3)
Other income (loss)
(38)
(983)
Total
Revenues and Other Income
11,616
4,380
32,386
13,207
Costs and Expenses
Purchased commodities
4,179
1,839
11,660
5,630
Production and operating expenses
1,389
4,151
3,183
Selling, general and administrative
expenses
Exploration expenses
Depreciation, depletion and amortization
1,672
1,411
5,425
3,980
Impairments
(89)
(90)
Taxes
other than income taxes
1,154
Accretion on discounted liabilities
Interest and debt expense
Foreign currency transaction
(gain) loss
(10)
(5)
(88)
Other expenses
Total
Costs and Expenses
8,034
4,892
24,010
15,261
Income (loss) before income taxes
3,582
(512)
8,376
(2,054)
Income tax provision (benefit)
1,203
(62)
2,924
(171)
Net income (loss)
2,379
(450)
5,452
(1,883)
Less: net loss attributable to noncontrolling
interests
-
-
-
(46)
Net Income (Loss) Attributable
to ConocoPhillips
$
2,379
(450)
5,452
(1,929)
Net Income (Loss) Attributable
to ConocoPhillips Per Share
of Common Stock
(dollars)
Basic
$
1.78
(0.42)
4.10
(1.79)
Diluted
1.78
(0.42)
4.09
(1.79)
Average Common Shares
Outstanding
(in thousands)
Basic
1,332,286
1,077,377
1,327,216
1,079,525
Diluted
1,336,379
1,077,377
1,330,652
1,079,525
See Notes to Consolidated Financial Statements.
Financial Statements
ConocoPhillips
2021 Q3 10-Q
Consolidated Statement
of Comprehensive Income
ConocoPhillips
Millions of Dollars
Three Months Ended
Nine Months Ended
September 30
September 30
2021
2020
2021
2020
Net Income (Loss)
$
2,379
(450)
5,452
(1,883)
Other comprehensive income (loss)
Defined benefit plans
Reclassification adjustment for
amortization of prior
service credit included in net income (loss)
(9)
(8)
(28)
(24)
Net actuarial gain (loss) arising during the period
(78)
(73)
Reclassification adjustment for
amortization of net actuarial
losses included in net income (loss)
Income taxes on defined benefit
plans
(9)
(49)
Defined benefit plans, net of tax
(31)
(13)
Unrealized holding gain (loss) on securities
-
-
(1)
Income taxes on unrealized
holding gain on securities
-
-
-
(1)
Unrealized holding gain (loss) on securities,
net of tax
-
-
(1)
Foreign currency translation
adjustments
(237)
(72)
(302)
Income taxes on foreign
currency translation adjustments
(1)
(1)
Foreign currency translation
adjustments, net of tax
(238)
(73)
(298)
Other Comprehensive Income (Loss), Net of Tax
(203)
(309)
Comprehensive Income (Loss)
2,176
(291)
5,547
(2,192)
Less: comprehensive income attributable
to noncontrolling interests
-
-
-
(46)
Comprehensive Income (Loss) Attributable
to ConocoPhillips
$
2,176
(291)
5,547
(2,238)
See Notes to Consolidated Financial Statements.
Financial Statements
ConocoPhillips
2021 Q3 10-Q
Consolidated Balance Sheet
ConocoPhillips
Millions of Dollars
September 30
December 31
2021
2020
Assets
Cash and cash equivalents
$
9,833
2,991
Short-term investments
3,609
Accounts and notes receivable (net of allowance
of $
and $
, respectively)
5,336
2,634
Accounts and notes receivable—related
parties
Investment in Cenovus Energy
1,416
1,256
Inventories
1,043
1,002
Prepaid expenses and other current
assets
1,746
Total
Current Assets
20,181
12,066
Investments and long-term receivables
8,058
8,017
Loans and advances—related parties
-
Net properties, plants and equipment
(net of accumulated DD&A of $
65,223
and $
62,213
, respectively)
56,689
39,893
Other assets
2,376
2,528
Total
Assets
$
87,304
62,618
Liabilities
Accounts payable
$
4,101
2,669
Accounts payable—related
parties
Short-term debt
Accrued income and other taxes
2,082
Employee benefit obligations
Other accruals
2,625
1,121
Total
Current Liabilities
10,449
5,366
Long-term debt
18,748
14,750
Asset retirement obligations
and accrued environmental costs
5,721
5,430
Deferred income taxes
5,630
3,747
Employee benefit obligations
1,162
1,697
Other liabilities and deferred credits
1,479
1,779
Total
Liabilities
43,189
32,769
Equity
Common stock (
2,500,000,000
shares authorized at $
0.01
par value)
Issued (2021—
2,089,046,718
shares; 2020—
1,798,844,267
shares)
Par value
Capital in excess of par
60,431
47,133
Treasury stock
(at cost: 2021—
770,099,851
shares; 2020—
730,802,089
shares)
(49,521)
(47,297)
Accumulated other comprehensive
loss
(5,123)
(5,218)
Retained earnings
38,307
35,213
Total
Equity
44,115
29,849
Total
Liabilities and Equity
$
87,304
62,618
See Notes to Consolidated Financial Statements.
Financial Statements
ConocoPhillips
2021 Q3 10-Q
Consolidated Statement
of Cash Flows
ConocoPhillips
Millions of Dollars
Nine Months Ended
September 30
2021
2020
Cash Flows From Operating Activities
Net income (loss)
$
5,452
(1,883)
Adjustments to reconcile net income
(loss) to net cash provided by operating
activities
Depreciation, depletion and amortization
5,425
3,980
Impairments
(90)
Dry hole costs and leasehold impairments
Accretion on discounted liabilities
Deferred taxes
(428)
Undistributed equity earnings
Gain on dispositions
(294)
(551)
(Gain) loss on investment in Cenovus
Energy
(743)
1,302
Other
(866)
(188)
Working capital adjustments
Decrease (increase) in accounts and notes
receivable
(1,619)
1,132
Increase in inventories
(13)
(74)
Increase in prepaid expenses and other current
assets
(800)
(49)
Increase (decrease) in accounts payable
(583)
Increase (decrease) in taxes
and other accruals
2,648
(808)
Net Cash Provided by Operating
Activities
11,128
3,130
Cash Flows From Investing Activities
Cash acquired from Concho
-
Capital expenditures and investments
(3,767)
(3,657)
Working capital changes
associated with investing activities
(229)
Proceeds from asset dispositions
1,312
Net sales (purchases) of investments
2,846
(1,089)
Collection of advances/loans—related parties
Other
(386)
(31)
Net Cash Provided by (Used in) Investing
Activities
(3,578)
Cash Flows From Financing Activities
Issuance of debt
-
Repayment of debt
(363)
(234)
Issuance of company common stock
(2)
Repurchase of company common
stock
(2,224)
(726)
Dividends paid
(1,750)
(1,367)
Other
(27)
Net Cash Used in Financing Activities
(4,304)
(2,056)
Effect of Exchange
Rate Changes on Cash, Cash Equivalents
and Restricted Cash
(3)
(62)
Net Change in Cash, Cash Equivalents and
Restricted Cash
6,872
(2,566)
Cash, cash equivalents and restricted
cash at beginning of period
3,315
5,362
Cash, Cash Equivalents and Restricted
Cash at End of Period
$
10,187
2,796
Restricted cash of $
million and $
million are included in the "Prepaid expenses and other current assets" and "Other
assets" lines,
respectively, of our Consolidated Balance Sheet as of September 30, 2021.
Restricted cash of $
million and $
million are included in the "Prepaid expenses and other current assets" and "Other assets"
lines,
respectively, of our Consolidated Balance Sheet as of December 31, 2020.
See Notes to Consolidated Financial Statements.
Notes to Consolidated Financial Statements
ConocoPhillips
2021 Q3 10-Q
Notes to Consolidated
Financial Statements
Note 1—Basis of Presentation
The interim-period financial information
presented in the financial statements
included in this report is unaudited
and, in the opinion of management, includes all known accruals and
adjustments necessary for a fair presentation
of the consolidated financial
Showing the first 8K of 88K characters. Open the full section
Item 2. Management’s Discussion and Analysis of Financial Condition and
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
Management’s Discussion and Analysis is the company’s
analysis of its financial performance and of significant
trends that may affect future performance.
It should be read in conjunction with the financial statements
and
notes.
It contains forward-looking statements
including, without limitation, statements
relating to the company’s
plans, strategies, objectives, expectations
and intentions that are made pursuant to
the “safe harbor” provisions of
the Private Securities Litigation Reform Act of 1995.
The words “anticipate,”
“believe,” “budget,”
“continue,”
“could,”
“effort,”
“estimate,”
“expect,”
“forecast,”
“goal,”
“guidance,”
“intend,”
“may,”
“objective,”
“outlook,”
“plan,” “potential,”
“predict,” “projection,”
“seek,” “should,”
“target,”
“will,” “would,”
and similar expressions
identify forward-looking statements.
The company does not undertake
to update, revise or correct any of the
forward-looking information unless required to do so under
the federal securities laws.
Readers are cautioned that
such forward-looking statements
should be read in conjunction with the company’s
disclosures under the heading:
“CAUTIONARY STATEMENT
FOR THE PURPOSES OF THE ‘SAFE HARBOR’ PROVISIONS
OF THE PRIVATE
SECURITIES
LITIGATION REFORM
ACT OF 1995,”
beginning on page 57.
The terms “earnings” and “loss” as used in Management’s
Discussion and Analysis refer to net income (loss)
attributable to ConocoPhillips.
Business Environment and Executive Overview
ConocoPhillips is the world’s
largest independent E&P company
with operations and activities in 14 countries.
Our
diverse, low cost of supply portfolio
includes resource-rich unconventional
plays in North America; conventional
assets in North America, Europe, and Asia; LNG
developments; oil sands in Canada; and an inventory
of global
conventional and unconventional
exploration prospects.
Headquartered in Houston, Texas,
at September 30,
2021, we employed approximately
9,900 people worldwide and had total assets
of $87 billion.
Completed and Announced Acquisitions
On January 15, 2021, we completed our acquisition
of Concho Resources Inc. (Concho), an independent
oil and gas
exploration and production
company with operations across
New Mexico and West Texas.
The addition of
complementary acreage in the Delaware
and Midland Basins resulted in a significant
Permian presence to augment
our leading unconventional positions
in the Eagle Ford, Bakken and
Montney.
In September 2021, we signed a definitive agreement
to acquire Shell Enterprises LLC
’s assets in
the Delaware
Basin (Shell Permian Acquisition) in an all-cash transaction
for $9.5 billion before customary
adjustments.
Assets
to be acquired include approximately
225,000 net acres and producing properties
located entirely in Texas,
as well
as over 600 miles of operated crude, gas
and water pipelines and infrastructure.
This acquisition further enhances
our already sizeable Permian
position, and we believe that our development,
operational and commercial
expertise will deliver significant incremental
value.
This acquisition is expected to close in the
fourth quarter of
2021, subject to regulatory approval
and other customary closing conditions.
Factors” for further discussion of the risks related to the Shell Permian Acquisition.
Overview
While commodity prices in the third quarter of 2021 improve
d
to pre-pandemic levels,
we expect that they will
continue to be cyclical and volatile.
Our view is that a successful business strategy
in the E&P industry must be
resilient in lower price environments,
while also retaining upside during periods
of higher prices.
As such, we are
unhedged, remain highly disciplined in our investment
decisions and continually monitor market
fundamentals
including OPEC plus updates regarding
supply guidance and inventory
levels.
Demand continues to recover but
has yet to regain pre
-pandemic levels.
The speed and extent of this recovery
will be influenced by continual easing
of COVID-19 restrictions that have
reduced economic activity and depressed
the demand for our products globally.
Management’s Discussion and Analysis
ConocoPhillips
2021 Q3 10-Q
The energy macro-environment
,
including energy transition, continues
to evolve.
We believe ConocoPhillips can
play a valued role in the energy
transition.
We have adopted a triple mandate
that simultaneously calls for
meeting energy pathway demand,
delivering competitive returns of and on
capital, and achieving our net-zero
ambition on operational (scope 1 and 2) emissions.
Our triple mandate is supported by financial principles
and capital allocation priorities that
should allow us to
deliver superior returns through the price cycles
.
Our financial principles consist of maintaining
balance sheet
strength, providing peer-leading
distributions, making disciplined investment
s, and delivering ESG excellence,
all of
which are in service to delivering competitive financial
returns.
Our completed and announced acquisitions
this
year further reinforce our value
proposition.
In the third quarter,
total company production
was 1,544 MBOED
resulting in cash provided by operating
activities of $4.8 billion.
In the nine-month period ended September 30,
2021, we generated $11.1 billion in
cash provided by operating activities,
returning $1.8 billion to shareholders
through dividends and $2.2 billion through share
repurchases.
We ended the quarter with cash,
cash equivalents
and short-term investments totaling
$10.5 billion.
In February
2021, we resumed our share repurchase
program at an annualized
level of $1.5 billion, which we
increased in the second quarter to an annualized
level of $2.5 billion for 2021.
Additionally, in
May 2021 we announced a paced monetization
program related to the
208 million shares of
Cenovus Energy (CVE) common shares
owned at that time.
We plan to fully dispose of our CVE shares
by year-end
2022, however,
the sales pace for the remaining shares will
be guided by market conditions,
and we retain
discretion to adjust accordingly.
During the third quarter of 2021, we sold 47 million shares
for $404 million and
inception to date have sold
67 million shares for $584 million.
Proceeds from the disposition of CVE shares
will be
deployed toward incremental
share repurchases.
In September 2021, we declared an increase
in the company’s quarterly
ordinary dividend from 43 cents per share
to 46 cents per share, representing
a 7 percent increase.
The dividend is payable on December 1, 2021,
to
stockholders of record
at the close of business on October 28, 2021.
Planned distributions for 2021 amount to
a total of approximately $6 billion
between dividends
and share
repurchases combined.
Additionally in September 2021, we demonstrated
our commitment to preserving our ‘A’
-rated balance sheet by
restating our intent
to reduce the company’s
gross debt by $5 billion over five years
through natural and
accelerated maturities.
In conjunction with our Shell Permian Acquisition announcement
,
we also communicated an increase
to our
planned disposition target that was
initially set in June at $2 to $3 billion by 2022.
We are now targeting
$4 to $5
billion in disposition proceeds by 2023, with the additional
$2 billion sourced primarily from the Permian
Basin as
part of our ongoing portfolio high-grading and
optimization efforts.
To date,
we have generated
$0.2 billion in
disposition proceeds.
The proceeds from these transactions will be used
in accordance with the company’s
priorities, including returns of capital
to shareholders and reduction of gross
debt.
Showing the first 8K of 86K characters. Open the full section
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Quantitative and Qualitative Disclosures about Market Risk
Information about market
risks for the nine months ended September
30, 2021, does not differ materially from
that discussed under Item 7A in our 2020 Annual Report
on Form 10-K.
ConocoPhillips
2021 Q3 10-Q
Item 4. Controls and Procedures
Controls and Procedures
We maintain disclosure
controls and procedures
designed to ensure information required
to be disclosed in
reports we file or submit under the Securities Exchange
Act of 1934, as amended (the Act), is recorded, processed,
summarized and reported within the
time periods specified in SEC rules and forms, and
that such information is
accumulated and communicated
to management, including our principal executive
and principal financial officers,
as appropriate, to allow timely decisions
regarding required disclosure.
At September 30, 2021, with the
participation of our management, our Chairman and
Chief Executive Officer (principal executive
officer) and our
Executive Vice President and Chief
Financial Officer (principal financial officer) carried
out an evaluation, pursuant
to Rule 13a-15(b) of the Act, of ConocoPhillips’ disclosure
controls and procedures
(as defined in Rule 13a-15(e) of
the Act).
Based upon that evaluation, our Chairman
and Chief Executive Officer and our Executive
Vice President
and Chief Financial Officer concluded our disclosure
controls and procedures were
operating effectively
at
September 30, 2021.
There have been no changes in our internal
control over financial reporting, as defined in
Rule 13a-15(f) of the Act,
in the period covered by this report that
have materially affected,
or are reasonably likely to
materially affect, our
internal control over financial
reporting.
PART
II.
Other Information
Item 1.
Legal Proceedings
The interim-period financial information
presented in the financial statements
included in this report is unaudited.
There are no new material legal
proceedings or material developments
with respect to matters
previously
disclosed in Item 3 of our 2020 Annual Report on Form
10-K.
Item 1A. Risk Factors
Risk Factors
Other than the risk factors set forth
below, there
have been no material changes
to the risk factors disclosed
in our
Annual Report on Form 10-K for the
fiscal year ended December 31, 2020.
Risks Related to the Proposed Shell Permian
Acquisition
Our ability to complete the Shell Permian
Acquisition is subject to various closing conditions,
including regulatory
clearance, which may impose conditions that could adversely
affect us or cause the acquisition not to be
completed.
The Shell Permian Acquisition is subject to a number of conditions
to closing as specified in the definitive
agreement signed on September 20, 2021 (Purchase
Agreement), including but not limited to
the expiration or
termination of the waiting period under the Hart-Scott
-Rodino Antitrust Improvements
Act of 1976, as
amended. No assurance can be given that
the required regulatory clearance
will be obtained or that the other
required conditions to closing will be satisfied,
and, if the regulatory clearance is obtained
and the required
conditions are satisfied, no assurance
can be given as to the terms, conditions and
timing of such clearance,
including whether any required conditions
will materially adversely affect
ConocoPhillips following the Shell
Permian Acquisition.
Any delay in closing the Shell Permian
Acquisition could cause ConocoPhillips not to
realize,
or to be delayed in realizing, some or all of the benefits that
we expect to achieve if the Shell Permian
Acquisition
is successfully closed within its expected time frame.
ConocoPhillips
2021 Q3 10-Q
The termination of the Purchase Agreement could negatively
impact our business and in some circumstances, we
could forfeit a portion of the purchase price.
If the Shell Permian Acquisition is not completed
for any reason, including if the above
closing conditions are not
satisfied, our ongoing business may be adversely
affected and, without realizing
any of the expected benefits of
having completed the Shell Permian
Acquisition, we would be subject to a number
of risks, including the following:
●
We may experience negative
reactions from the financial markets,
including negative impacts on the
trading price of our common stock; and
●
We will be required to pay
our costs relating to the Shell Permian Acquisition,
such as legal and
accounting costs and associated
fees and expenses, whether or not the Shell Permian
Acquisition is
completed.
Additionally, upon
entry into the Purchase Agreement, 5%
(the Deposit) of the $9.5 billion (Base Purchase Price)
was paid to Shell.
If the Purchase Agreement is terminated
solely as a result of the material breach or failure
of
any of our representations,
warranties or covenants
included in the Purchase Agreement, the Deposit will not
be
refunded.
Integrating the assets acquired in the Shell Permian Acquisition
may be more difficult, costly or time-consuming
than expected and we may fail to realize
the full anticipated benefits of the transaction, which may adversely
affect our business results and negatively affect the value of our common stock.
We may encounter difficulties
integrating the assets acquired
from Shell into our business and realizing the
anticipated benefits of the transaction
or such benefits may take longer
to realize than expected.
The Shell
Permian Acquisition is expected to
add approximately 225,000 net acres,
thereby increasing our unconventional
position in Permian by nearly 30 percent.
There are a large number of processes,
policies, procedures, operations
and technologies and systems
that must be integrated
in connection with the Shell Permian Acquisition and the
integration of Shell’s
assets.
It is possible that the integration process
could result in the disruption of our ongoing
business; inconsistencies in standards,
controls, procedures and
policies; unexpected integration
issues; higher
than expected integration
costs and an overall post
-completion integration process
that takes longer than
originally anticipated.
We will be required to devote
management attention
and resources to integrating
the
business practices and operations,
and prior to closing the transaction, management attention
and resources will
be required to plan for such integration.
An inability to realize the full extent
of the anticipated benefits of the
Shell Permian Acquisition, as well as any delays
encountered in the integration
process, could have an adverse
effect on our revenues or
on our level of expenses and operating
results, which may adversely affect
the value of
our common stock.
In addition, the actual integration may
result in additional and unforeseen expenses.
Although
we expect that the strategic
benefits, and additional income, as well as the realization
of other efficiencies related
to the integration of the Shell assets,
may offset incremental
transaction-related costs
over time, if we are not able
to adequately address integration
challenges, we may be unable to successfully
integrate operations
or realize the
anticipated benefits of the integration
of the Shell assets.
ConocoPhillips
2021 Q3 10-Q
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
Millions of Dollars
Period
Total
Number of
Shares
Purchased
Average Price Paid
per Share
Total
Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
Approximate Dollar
Value of Shares That
May Yet Be Purchased
Under the Plans or
Programs
July 1-31, 2021
7,118,526
$
58.18
7,118,526
$
13,088
August 1-31, 2021
7,530,282
55.61
7,530,282
12,669
September 1-30, 2021
6,990,322
58.70
6,990,322
12,259
21,639,130
21,639,130
*There were no repurchases of common stock from company employees in connection with the company's broad-based
employee incentive plans.
In late 2016, we initiated our current
share repurchase program,
which has a total program authorization
of $25
billion of our common stock.
At September 30, 2021, we had repurchased
$12.7 billion of shares, with $12.3
billion remaining under our current authorization.
Repurchases are made at management’s
discretion, at
prevailing prices, subject to market
conditions and other factors.
Except as limited by applicable legal
requirements, repurchases
may be increased, decreased or discontinued
at any time without prior notice.
Shares
of stock repurchased under the plan are
held as treasury shares.
See the “Our ability to declare and pay
dividends
and repurchase shares is subject to certain
considerations” section in Risk Factors
on page 31 of our 2020 Annual
Report on Form 10-K.
ConocoPhillips
2021 Q3 10-Q
Item 6. Exhibits
Exhibits
10.1*
Purchase and Sale Agreement, dated as of September 20, 2021, by and between Shell Enterprises
LLC and ConocoPhillips Company.
31.1*
31.2*
32*
Certifications pursuant to 18 U.S.C. Section 1350.
101.INS*
Inline XBRL Instance Document.
101.SCH*
Inline XBRL Schema Document.
101.CAL*
Inline XBRL Calculation Linkbase Document.
101.LAB*
Inline XBRL Labels Linkbase Document.
101.PRE*
Inline XBRL Presentation Linkbase Document.
101.DEF*
Inline XBRL Definition Linkbase Document.
104*
Cover Page Interactive
Data File (formatted
as Inline XBRL and contained in Exhibit 101).
- Filed herewith.
ConocoPhillips
2021 Q3 10-Q
Signature
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 thereunto
duly authorized.
CONOCOPHILLIPS
/s/ Kontessa S. Haynes-Welsh
Kontessa S. Haynes-Welsh
Chief Accounting Officer
November 4, 2021