Item 2. 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 53**.

The terms “earnings” and “loss” as used in Management’s Discussion and Analysis refer to net income (loss).

Business Environment and Executive Overview

ConocoPhillips is the world’s largest independent E&P company with operations and activities in 13 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 June 30, 2022, we employed approximately 9,400 people worldwide and had total assets of $94 billion.

Overview

Commodity prices continued to increase during the second quarter of 2022, in part due to the continued impacts associated with the Russian invasion of Ukraine and sanctions levied against Russia as a result of the conflict. We anticipate that prices will continue to be cyclical and volatile, and our view is that a successful business strategy in the E&P industry must be resilient in lower price environments, while also retaining full upside exposure during periods of higher prices. As such, we are unhedged, remain highly disciplined in our investment decisions and continue to monitor market fundamentals including the impacts associated with the conflict in Ukraine, OPEC plus supply updates, global demand for our products, oil and gas inventory levels, inflation, supply chain disruptions and the fluctuating global COVID-19 impacts.

The macro-environment, including the energy transition, also continues to evolve. We believe ConocoPhillips is playing a valued role in the energy transition. We are guided by our triple mandate that simultaneously calls for us to reliably and responsibly deliver oil and gas production to meet energy transition pathway demand, deliver competitive returns on and of capital, and do so with a resilient and sustainable portfolio enabling us to achieve our net-zero operating emissions ambition. Our triple mandate is supported by financial principles and capital allocation priorities designed to 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 investments and demonstrating ESG leadership, all of which are in service to generating competitive financial returns through the price cycles.

In the second quarter, total company production was 1,692 MBOED, resulting in cash provided by operating activities of $7.9 billion, with $1 billion returned to shareholders through our ordinary dividend and a VROC and $2.3 billion through share repurchases. We ended the quarter with cash, cash equivalents and short-term investments totaling $8.2 billion.

In May 2022, we announced an increase to our 2022 expected distributions through our three-tier return of capital framework to $10 billion for the year. Additionally, in August we increased our targeted distributions further, to a new total of $15 billion for the year. This framework includes our ordinary dividend, share repurchases and the VROC tier that was introduced last December. In August, we declared our third quarter ordinary dividend of $0.46 per share and a fourth quarter VROC payment of $1.40 per share.

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Management’s Discussion and Analysis			Table of Contents

Demonstrating our commitment to enhance balance sheet strength, in May 2022, we retired $1,250 million principal amount of our 4.95 percent Notes due 2026 and $500 million principal amount of floating rate notes. Both retirements were sourced from available cash. Additionally, in the first quarter we executed a debt refinancing comprised of concurrent transactions including new debt issuances, a cash tender offer and debt exchange offers. In aggregate, these transactions reduced the company's total debt by $3 billion. These activities facilitate our ability to achieve our previously announced $5 billion debt reduction target by the end of 2026, while also reducing the company's annual cash interest expense. See Note 6.

In 2022, we have taken several steps to expand our global LNG business. In the first quarter, we increased our equity share in Asia Pacific LNG (APLNG). In the second quarter, we signed an agreement for a new joint venture with QatarEnergy that will participate with a 12.5 percent interest in the North Field East LNG project. Subject to regulatory approvals, we will hold a 25 percent interest in this joint venture. Domestically, in July 2022, we announced a Heads of Agreement (HOA) with Sempra to potentially acquire a 30 percent direct equity holding in Port Arthur Liquefaction Holdings, LLC and an LNG offtake equivalent to approximately 5 million tonnes per annum from the Port Arthur LNG project. The HOA is a preliminary, non-binding arrangement, with development of the Port Arthur LNG project subject to concluding definitive agreements and resolving a number of risks and uncertainties, including, among others, signing engineering and construction contracts, obtaining financing and reaching a final investment decision between the parties.

As part of our ongoing portfolio high-grading and optimization efforts, in April 2022, we completed the sale of certain noncore assets in the Lower 48 segment for $370 million after customary adjustments. In July 2022, we entered into agreements to sell our interests in additional noncore assets in the Lower 48 segment for $265 million, before customary adjustments. These transactions are expected to close in the third quarter of 2022. See Note 3.

Operationally, we remain focused on safely executing the business. Production was 1,692 MBOED in the second quarter of 2022, an increase of 104 MBOED from the same period a year ago. After adjusting for closed acquisitions and dispositions and the conversion of previously acquired Concho contracted volumes from a two-stream to a three-stream basis, second-quarter 2022 production decreased by 69 MBOED or 4 percent from the same period a year ago. Organic growth from Lower 48 and other development programs more than offset decline; however, production was lower overall primarily due to planned and unplanned downtime.

We re-invested $2 billion into the business in the form of capital expenditures and investments during the second quarter of 2022, with over half of the expenditures focused on flexible, short-cycle unconventional plays in the Lower 48 segment, where our production has access to both domestic and export markets.

In further support of our commitment to ESG leadership and excellence, in July 2022, we announced that ConocoPhillips joined the Oil and Gas Methane Partnership (OGMP) 2.0 initiative. The initiative's mission is to improve industry transparency in methane emissions reporting and encourage progress in reducing those emissions. We believe that applying the rigorous OGMP 2.0 reporting standards across our global assets will be a vital step towards meeting our Paris-aligned climate-risk commitments, including our net-zero ambition for operational emissions by 2050, and will allow us to credibly demonstrate how we are delivering against our methane improvement objectives and targets.

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Management’s Discussion and Analysis			Table of Contents

Business Environment

Commodity prices are the most significant factor impacting our profitability and related returns on and of capital to our shareholders. Dynamics that could influence world energy markets and commodity prices are global economic health, supply or demand disruptions or fears thereof caused by civil unrest, global pandemics, military conflicts, actions taken by OPEC plus and other major oil producing countries, environmental laws, tax regulations, governmental policies and weather-related disruptions. Our strategy is to create value through price cycles by delivering on the financial, operational and ESG priorities that underpin our value proposition.

Our earnings and operating cash flows generally correlate with price levels for crude oil and natural gas, which are subject to factors external to the company and over which we have no control. The following graph depicts the trend in average benchmark prices for WTI crude oil, Brent crude oil and Henry Hub natural gas:

Brent crude oil prices averaged $113.78 per barrel in the second quarter of 2022, an increase of 65 percent compared with $68.83 per barrel in the second quarter of 2021. WTI at Cushing crude oil prices averaged $108.41 per barrel in the second quarter of 2022, an increase of 64 percent compared with $66.07 per barrel in the second quarter of 2021. Oil prices increased as a result of the ongoing global economic recovery following COVID-related impacts as well as supply constraints due to Russia's invasion of Ukraine, OPEC plus adherence to agreed production quotas, other disruptions and supply chain bottlenecks limiting growth.

Henry Hub natural gas prices averaged $7.17 per MMBTU in the second quarter of 2022, an increase of 153 percent compared with $2.83 per MMBTU in the second quarter of 2021. Henry Hub prices have increased due to low inventories, healthy domestic demand and strong exports via pipelines and LNG.

Our realized bitumen price averaged $75.42 per barrel in the second quarter of 2022, an increase of 101 percent compared with $37.60 per barrel in the second quarter of 2021. The increase in the second quarter of 2022 was driven by higher blend prices for Surmont sales, largely attributed to a strengthening of WTI price. We continue to optimize bitumen price realizations through the utilization of downstream transportation solutions and implementation of alternate blend capability which results in lower diluent costs.

For the second quarter of 2022 our total average realized price increased to $88.57 per BOE compared with

$50.03 per BOE in the second quarter of 2021.

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Management’s Discussion and Analysis			Table of Contents

Key Operating and Financial Summary

Significant items during the second quarter of 2022 and recent announcements included the following:

• Announced a $5 billion increase in expected 2022 returns of capital to shareholders to a total of $15 billion.

• Distributed $3.3 billion to shareholders through a three-tier framework, including $1.0 billion in cash through the ordinary dividend and VROC and $2.3 billion through share repurchases.

• Expanded global LNG portfolio through participation in QatarEnergy's North Field East LNG project and announced a non-binding Heads of Agreement with Sempra Infrastructure with opportunities to participate in large-scale LNG projects, an LNG offtake of approximately 5 million tonnes per annum and related carbon capture activities.

• As part of our ongoing commitment to ESG excellence and leadership, we joined the OGMP 2.0 initiative.

• Generated cash provided by operating activities of $7.9 billion.

• Delivered second-quarter production of 1,692 MBOED while successfully completing planned maintenance turnarounds.

• Continued progress toward the company's $5 billion debt reduction target through $1.8 billion of debt retirements during the quarter, now totaling $3 billion since announcing the target.

• Completed $0.4 billion of noncore asset sales during the quarter.

• Ended the quarter with cash, cash equivalents and restricted cash of $7.2 billion and short-term investments of $1.3 billion.

Outlook

Capital and Production

Third-quarter 2022 production is expected to be 1.70 to 1.76 MBOED, reflecting the impacts of seasonal turnarounds planned primarily in Alaska and the Asia Pacific region. Full-year production is expected to be approximately

1.74 MMBOED reflecting uncertainty in Libya and modest updates across the portfolio.

Guidance regarding capital is unchanged.

Depreciation, Depletion and Amortization

Full-year guidance for depreciation, depletion and amortization has decreased to $7.6 billion.

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Results of Operations			Table of Contents

Results of Operations

Unless otherwise indicated, discussion of results for the three- and six-month periods ended June 30, 2022, is based on a comparison with the corresponding period of 2021.

Consolidated Results

A summary of the company's net income (loss) by business segment follows:

			Millions of Dollars
			Three Months Ended June 30									Six Months Ended June 30
			2022			2021						2022			2021
Alaska			$	687		371						1,271			530
Lower 48			3,581			1,175						6,371			1,643
Canada			316			102						607			112
Europe, Middle East and North Africa			385			207						797			360
Asia Pacific			525			175						1,661			492
Other International			—			(5)						—			(9)
Corporate and Other			(349)			66						197			(55)
Net income			$	5,145		2,091						10,904			3,073

Net income in the second quarter of 2022 increased $3,054 million. Second quarter earnings were positively impacted by:

• Higher realized commodity prices.

• Higher sales volumes, primarily due to our Shell Permian acquisition, partly offset by assets divested. See Note 3.

• Higher equity in earnings of affiliates, primarily due to higher LNG sales prices.

• Gain on dispositions primarily due the divestiture of noncore assets in the Lower 48 segment and recognizing higher contingent payments related to prior dispositions in our Canada and Lower 48 segments. See Note 3.

Second quarter 2022 earnings were negatively impacted by:

• Higher production and operating expenses and taxes other than income taxes, primarily due to higher prices and production volumes.

• Higher income tax provision.

• Absence of mark to market gains associated with Cenovus Energy (CVE) shares. See Note 5.

Net income in the six-month period ended June 30, 2022, increased $7,831 million. In addition to the items mentioned above, earnings in the six-month period were positively impacted by:

• Previously unrecognized $515 million tax benefit related to the closing of an IRS audit in the first quarter.

See Note 18.

• Gain on dispositions primarily due to a $462 million after-tax gain related to the divestiture of our Indonesia assets. See Note 3.

• Absence of restructuring and transaction expenses of $243 million after-tax related to our Concho acquisition.

• Absence of realized losses on hedges of $233 million after-tax related to derivative positions acquired in our Concho acquisition. See Note 10.

• Lower DD&A expenses caused by lower rates driven by price-related reserve revisions due to higher commodity prices, partially offset by higher production volumes.

• After-tax gain of $62 million associated with refinancing transactions. See Note 6.

In addition to the items mentioned above, earnings in the six-month period were negatively impacted by:

• Absence of $194 million after-tax gain recognized in conjunction with our Australia-West divestiture. See Note 9.

See the “Segment Results” section for additional information.

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Income Statement Analysis

Unless otherwise indicated, all results in Income Statement Analysis are before-tax.

Sales and other operating revenues for the three- and six-month periods of 2022 increased $11,605 million and

$19,541 million, respectively, mainly due to higher realized commodity prices and higher sales volumes.

Equity in earnings of affiliates for the three- and six-month periods of 2022 increased $385 million and $689 million, respectively, primarily due to higher earnings driven by higher LNG and crude prices as well as higher sales volumes inclusive of the additional 10 percent interest in APLNG we acquired in the first quarter of 2022. See Note 3.

Gain on dispositions in the second quarter of 2022 increased due to a gain of $80 million for the sale of noncore assets in the Lower 48 segment. For the six-month period of 2022, we recognized a gain of $534 million from our Indonesia divestiture. For both the three- and six-month periods of 2022, we recognized higher contingent payments associated with previous dispositions in our Canada and Lower 48 segments than the same periods of 2021. Offsetting the increase in gains in the six-month period of 2022 was the absence of a $200 million gain associated with our Australia-West divestiture recognized in the first quarter of 2021. See Note 3.

Other income for the three- and six-month periods of 2022 decreased $415 million and $507 million, respectively, primarily due to the absence of mark to market gains associated with our CVE common shares which were fully divested in the first quarter of 2022. See Note 5.

Purchased commodities for the three- and six-month periods of 2022 increased $6,236 million and $8,504 million, respectively, primarily due to higher gas and crude prices and volumes.

Production and operating expenses for the three- and six-month periods of 2022 increased $362 million and $560 million, respectively, primarily due to higher production volumes.

Selling, general and administrative expenses decreased $145 million in the six-month period primarily due to the absence of transaction and restructuring expenses associated with our Concho acquisition in 2021.

DD&A for the three- and six-month periods of 2022 decreased $57 million and $120 million, respectively, mainly due to lower rates from positive price-related reserve revisions and the absence of DD&A from disposed assets offset by higher overall production volumes primarily associated with our Shell Permian acquisition.

Taxes other than income taxes for the three- and six-month periods of 2022 increased $639 million and $1,083 million, respectively, caused by higher commodity prices and higher production volumes.

Other expenses for the second quarter of 2022 increased $49 million primarily related to premiums paid to repurchase debt. For the six-month period of 2022, other expenses decreased $111 million primarily related to a gain of $127 million associated with extinguishment of debt from the first quarter of 2022. See Note 6.

See Note 18—Income Taxes for information regarding our Income tax provision and effective tax rate.

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Results of Operations			Table of Contents

Summary Operating Statistics

			Three Months Ended June 30						Six Months Ended June 30
			2022			2021			2022			2021
Average Net Production
Crude oil (MBD)
Consolidated operations			857			836			880			820
Equity affiliates			14			13			13			13
Total crude oil			871			849			893			833
Natural gas liquids (MBD)
Consolidated operations			236			120			227			113
Equity affiliates			8			8			7			8
Total natural gas liquids			244			128			234			121
Bitumen (MBD)			59			68			63			69
Natural gas (MMCFD)
Consolidated operations			1,872			2,209			1,999			2,142
Equity affiliates			1,235			1,051			1,181			1,066
Total natural gas			3,107			3,260			3,180			3,208
Total Production (MBOED)			1,692			1,588			1,720			1,558

			Dollars Per Unit
Average Sales Prices
Crude oil (per bbl)
Consolidated operations			$	111.49		65.54			102.97			61.60
Equity affiliates			111.97			64.10			105.20			62.03
Total crude oil			111.50			65.51			103.00			61.60
Natural gas liquids (per bbl)
Consolidated operations			42.20			25.62			41.61			25.06
Equity affiliates			72.44			44.12			69.99			46.53
Total natural gas liquids			43.26			26.87			42.57			26.68
Bitumen (per bbl)			75.42			37.60			70.25			34.09
Natural gas (per MCF)
Consolidated operations			10.19			4.25			9.46			4.56
Equity affiliates			10.08			3.97			9.51			3.76
Total natural gas			10.15			4.16			9.48			4.29

			Millions of Dollars
Exploration Expenses
General administrative, geological and geophysical, lease rental and other			$	46		56			108			134
Leasehold impairment			10			1			16			1
Dry holes			87			—			88			6
			$	143		57			212			141

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We explore for, produce, transport and market crude oil, bitumen, natural gas, LNG and NGLs on a worldwide basis. In the quarter ending June 30, 2022, our operations were producing in the U.S., Norway, Canada, Australia, China, Malaysia, Qatar and Libya.

Total production of 1,692 MBOED increased 104 MBOED or 7 percent in the second quarter of 2022 and 162 MBOED or 10 percent in the six-month period of 2022, primarily due to:

• New wells online in the Lower 48, Alaska, Malaysia and Canada.

• Higher volumes in the Lower 48 due to our Shell Permian acquisition.

• Conversion of previously acquired Concho contracted volumes from a two-stream to a three-stream basis.

Production increases in the second quarter and in the six-month period of 2022 were partly offset due to:

• Normal field decline.

• Divestitures of Indonesia and noncore assets in the Lower 48 segment.

Production for the second quarter of 2022 was 1,692 MBOED, an increase of 104 MBOED from the same period a year ago. After adjusting for closed acquisitions and dispositions and the conversion of previously acquired Concho contracted volumes from a two-stream to a three-stream basis, second-quarter 2022 production decreased by 69 MBOED or 4 percent from the same period a year ago. Organic growth from Lower 48 and other development programs more than offset decline; however, production was lower overall primarily due to planned and unplanned downtime.

Production for the first six months of 2022 was 1,720 MBOED, an increase of 162 MBOED from the same period a year ago. After adjusting for closed acquisitions and dispositions, the conversion of previously acquired Concho contracted volumes from a two-stream to a three-stream basis, and 2021 Winter Storm Uri impacts, production decreased

53 MBOED or 3 percent from the same period a year ago. Organic growth from Lower 48 and other development programs more than offset decline; however, production was lower overall primarily due to planned and unplanned downtime.

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Results of Operations			Table of Contents

Segment Results

Alaska

			Three Months Ended June 30						Six Months Ended June 30
			2022			2021			2022			2021
Net Income ($MM)			$	687		371			1,271			530
Average Net Production
Crude oil (MBD)			177			184			180			187
Natural gas liquids (MBD)			16			15			17			16
Natural gas (MMCFD)			34			11			34			10
Total Production (MBOED)			199			201			203			205
Average Sales Prices
Crude oil ($ per bbl)			$	114.77		67.87			105.26			63.93
Natural gas ($ per MCF)			3.34			4.53			3.66			3.17

The Alaska segment primarily explores for, produces, transports and markets crude oil, NGLs and natural gas. As of June 30, 2022, Alaska contributed 18 percent of our consolidated liquids production and two percent of our consolidated natural gas production.

Net Income

Earnings from Alaska increased $316 million and $741 million in the three- and six-month periods of 2022, respectively. Increases to earnings include:

• Higher realized crude oil prices.

Offsets to the earnings increase include:

• Higher taxes other than income taxes associated with higher realized crude oil prices.

In addition to the items detailed above, in the six-month period of 2022, earnings also increased due to:

• Lower DD&A expenses primarily driven by lower rates from price-related reserve revisions and lower production.

Production

Average production decreased slightly in the three- and six-month periods of 2022, respectively. Decreases to production include:

• Normal field decline.

• Higher downtime and lower base performance primarily in our Greater Kuparuk Area.

Offsets to the production decreases include:

• New wells online at our Western North Slope assets.

• Higher gas volumes in our Greater Prudhoe Area.

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Results of Operations			Table of Contents

Lower 48

			Three Months Ended June 30						Six Months Ended June 30
			2022			2021			2022			2021
Net Income ($MM)			$	3,581		1,175			6,371			1,643
Average Net Production
Crude oil (MBD)			528			454			533			435
Natural gas liquids (MBD)*			214			97			203			89
Natural gas (MMCFD)*			1,411			1,459			1,419			1,389
Total Production (MBOED)			977			794			972			755
Average Sales Prices
Crude oil ($ per bbl)			$	109.14		64.13			101.34			60.17
Natural gas liquids ($ per bbl)			42.00			24.62			41.26			24.34
Natural gas ($ per MCF)			6.85			3.27			5.74			3.88

*2022 includes the conversion of previously acquired Concho two-stream contracts to three-stream initiated in the fourth quarter of 2021.

The Lower 48 segment consists of operations located in the U.S. Lower 48 states, as well as producing properties in the Gulf of Mexico. As of June 30, 2022, the Lower 48 contributed 67 percent of our consolidated liquids production and

71 percent of our consolidated natural gas production.

Net Income

Earnings from the Lower 48 increased $2,406 million and $4,728 million in the three- and six-month periods of 2022, respectively. Increases to earnings include:

• Higher realized prices.

• Higher sales volumes of crude oil and NGLs primarily related to our Shell Permian Acquisition. See Note 3.

• After-tax gains on disposition of $63 million related to the sale of certain noncore assets as well as contingent payments of $16 million and $32 million in the three- and six-month periods of 2022, respectively, associated with previous asset sales. See Note 3.

Offsets to the earnings increase include:

• Higher production and operating expenses, taxes other than income taxes and DD&A expenses primarily due to higher production volumes. Partially offsetting the increase in DD&A expenses were lower rates from price-related reserve revisions.

In addition to the items detailed above, in the six-month period of 2022, earnings also increased due to the absence of realized losses on hedges related to derivative positions acquired in our Concho acquisition. See Note 10.

Production

Average production increased 183 MBOED and 217 MBOED in the three- and six-month periods of 2022, respectively. Increases to production include:

• New wells online from our development programs in Permian, Eagle Ford and Bakken.

• Higher volumes due to our Shell Permian acquisition. See Note 3.

• Conversion of previously acquired Concho contracted volumes from a two-stream to a three-stream basis.

Offsets to the production increases include:

• Normal field decline.

Completed and Planned Dispositions

On April 1, 2022, we completed our divestiture of certain noncore assets for $370 million, after customary adjustments. Production from these assets averaged approximately 10 MBOED in the three-months ended March 31, 2022. In July 2022, we entered into agreements to sell our interests in certain noncore assets in the Lower 48 segment for $265 million, before customary adjustments. These transactions are expected to close in the third quarter of 2022. See Note 3.

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Results of Operations			Table of Contents

Canada

			Three Months Ended June 30						Six Months Ended June 30
			2022			2021			2022			2021
Net Income ($MM)			$	316		102			607			112
Average Net Production
Crude oil (MBD)			5			9			6			10
Natural gas liquids (MBD)			3			4			3			4
Bitumen (MBD)			59			68			63			69
Natural gas (MMCFD)			66			84			65			87
Total Production (MBOED)			78			95			83			98
Average Sales Prices
Crude oil ($ per bbl)			$	94.79		56.87			88.04			51.66
Natural gas liquids ($ per bbl)			44.93			27.14			43.44			26.19
Bitumen ($ per bbl)			75.42			37.60			70.25			34.09
Natural gas ($ per MCF)			4.47			2.26			3.88			2.32

Average sales prices include unutilized transportation costs.

Our Canadian operations mainly consist of the Surmont oil sands development in Alberta and the liquids-rich Montney unconventional play in British Columbia. As of June 30, 2022, Canada contributed one percent of our consolidated liquids production and three percent of our consolidated natural gas production.

Net Income

Earnings from Canada increased $214 million and $495 million in the three- and six-month periods of 2022, respectively. Increases to earnings include:

• Higher realized prices.

• Higher after-tax gains on disposition related to contingent payments of $118 million and $294 million in the three- and six-month periods of 2022, respectively, associated with the prior sale of certain assets to CVE, compared with $52 million and $72 million in the same periods of 2021, respectively. See Note 3.

Offsetting the earnings increases were lower sales volumes.

Production

Average production decreased 17 MBOED and 15 MBOED in the three- and six-month periods of 2022, respectively. Decreases to production include:

• Normal field decline.

• Planned turnaround at the Surmont Central Processing Facility 1 during the second quarter of 2022.

• Higher royalty rates across the segment due to higher commodity prices.

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Results of Operations			Table of Contents

Europe, Middle East and North Africa

			Three Months Ended June 30						Six Months Ended June 30
			2022			2021			2022			2021
Net Income ($MM)			$	385		207			797			360
Consolidated Operations
Average Net Production
Crude oil (MBD)			90			120			101			118
Natural gas liquids (MBD)			3			4			4			4
Natural gas (MMCFD)			306			297			318			303
Total Production (MBOED)			144			173			158			172
Average Sales Prices
Crude oil ($ per bbl)			$	115.61		66.34			103.21			62.48
Natural gas liquids ($ per bbl)			68.00			39.49			60.49			38.21
Natural gas ($ per MCF)			28.32			7.17			28.77			6.58

The Europe, Middle East and North Africa segment consists of operations principally located in the Norwegian sector of the North Sea and the Norwegian Sea, Qatar, Libya and commercial operations in the U.K. During the current period, we have increased our capacity and supply arrangements on future gas purchases, which are primarily offset by future gas sales contracts, primarily in Europe. As of June 30, 2022, our Europe, Middle East and North Africa operations contributed nine percent of our consolidated liquids production and 16 percent of our consolidated natural gas production.

Net Income

Earnings from Europe, Middle East and North Africa increased by $178 million and $437 million in the three- and

six-month periods of 2022, respectively. Increases to earnings include:

• Higher realized prices.

• Higher LNG sales prices, reflected in equity in earnings of affiliates.

• Foreign exchange gains as the USD strengthened against the Norwegian Kroner.

Offsetting the earnings increases include:

• Lower sales volumes primarily due to turnaround activity in Norway in the second quarter.

• Changes to the Petroleum Tax System in Norway. See Note 18.

In addition to the items detailed above, in the six-month period of 2022, earnings impacts include:

• Increase due to lower DD&A expenses primarily driven by lower volumes and lower rates from price-related reserve revisions.

• Decrease due to lower sales volumes primarily due to turnaround activity in Qatar in the first quarter, reflected in equity in earnings of affiliates.

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Results of Operations			Table of Contents

Consolidated Production

Average consolidated production decreased 29 MBOED and 15 MBOED in the three- and six-month periods of 2022, respectively. Decreases to production include:

• Fieldwide turnarounds in the Greater Ekofisk Area of Norway in the second quarter of 2022.

• Normal field decline.

• Curtailed production in Libya due to the force majeure at the Es Sider export terminal in June.

Offsets to the production decreases include:

• New wells online and improved performance in Norway.

Force Majeure in Libya

Production ceased the last week of June 2022, due to a forced shutdown of the Es Sider export terminal after a period of civil unrest. Force majeure was lifted on July 15, 2022, and production has resumed.

Exploration Activity

Three wells from our 2022 four well exploration and appraisal campaign in Norway have been drilled and determined to be dry holes, increasing exploration expenses by approximately $76 million including the Slagugle appraisal well, which is in an area we are continuing to evaluate.

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Asia Pacific

			Three Months Ended June 30						Six Months Ended June 30
			2022			2021			2022			2021
Net Income ($MM)			$	525		175			1,661			492
Consolidated Operations
Average Net Production
Crude oil (MBD)			57			69			60			70
Natural gas (MMCFD)			55			358			163			353
Total Production (MBOED)			66			129			87			129
Average Sales Prices
Crude oil ($ per bbl)			$	117.14		67.72			110.89			64.01
Natural gas ($ per MCF)			4.17			6.32			6.53			6.10

The Asia Pacific segment has operations in China, Malaysia, Australia and commercial operations in Singapore and Japan. As of June 30, 2022, Asia Pacific contributed five percent of our consolidated liquids production and eight percent of our consolidated natural gas production.

Net Income

Earnings from Asia Pacific increased $350 million and $1,169 million in the three- and six-month periods of 2022, respectively. Increases to earnings include:

• Higher equity in earnings of affiliates reflecting higher LNG sales prices as well as our increased interest in APLNG.

• Higher realized crude oil prices.

• Lower DD&A expenses associated with lower production volumes due to the divestiture of our Indonesia assets and lower rates from positive price-related reserve revisions.

Offsets to the earnings increase include:

• Lower sales volumes primarily due to the divestiture of our Indonesia assets.

• Higher taxes other than income taxes primarily due to higher realized crude oil prices.

In addition to the items detailed above, in the six-month period of 2022, earnings impacts include:

• Increase due to an after-tax gain of $534 million associated with the divestiture of our Indonesia assets. See Note 3.

• Decrease due to absence of an after-tax gain of $200 million recognized in the first quarter of 2021 related to a contingent payment from our Australia-West divestiture in 2020. See Note 9.

Consolidated Production

Average consolidated production decreased 63 MBOED and 42 MBOED in the three- and six-month periods of 2022, respectively. Decreases to production include:

• Divestiture of our Indonesia assets in the first quarter of 2022.

• Normal field decline.

• Decrease in crude oil entitlement percentage and PSC adjustments in Malaysia.

Offsets to the production decreases includes Bohai Bay development activity in China.

Asset Acquisitions and Dispositions

In the first quarter of 2022, we completed the acquisition of an additional 10 percent interest in APLNG increasing our ownership to 47.5 percent. Also in the first quarter, we completed the divestiture of our subsidiaries that held our Indonesia assets and operations. Production from the disposed assets averaged approximately 33 MBOED in the

three-months ended March 31, 2022. See Note 3.

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Results of Operations			Table of Contents

Other International

			Three Months Ended June 30						Six Months Ended June 30
			2022			2021			2022			2021
Net Loss ($MM)			$	—		(5)			—			(9)

The Other International segment consists of exploration and appraisal activities in Colombia as well as contingencies associated with prior operations in other countries. As a result of recent acquisitions, we refocused our exploration program and announced our intent to pursue managed exits from certain areas.

Earnings from our Other International operations improved $5 million in the second quarter of 2022 and $9 million in the six-month period ended June 30, 2022, compared with the same periods of 2021.

Corporate and Other

			Millions of Dollars
			Three Months Ended June 30						Six Months Ended June 30
			2022			2021			2022			2021
Net Income (Loss)
Net interest expense			$	(164)		(181)			(382)			(451)
Corporate general and administrative expenses			(16)			(65)			(95)			(194)
Technology			(9)			(4)			49			37
Other income (expense)			(160)			316			625			553
			$	(349)		66			197			(55)

Net interest expense consists of interest and financing expense, net of interest income and capitalized interest. Net interest expense improved by $17 million and $69 million in the three- and six-month periods of 2022, respectively, primarily as a result of our debt reduction transactions. Improvement in the six-month period also includes the absence of a prior year tax adjustment.

Corporate G&A expenses include compensation programs and staff costs. These expenses decreased by $49 million and $99 million in the three- and six-month periods ended June 30, 2022, respectively, due to mark to market adjustments associated with certain compensation programs. Additionally, in the six-month period of 2022 Corporate G&A expenses decreased due to the absence of restructuring expenses associated with our 2021 acquisition of Concho Resources Inc.

Technology includes our investment in new technologies or businesses, as well as licensing revenues. Activities are focused on both conventional and tight oil reservoirs, shale gas, heavy oil, oil sands, enhanced oil recovery, as well as LNG. See Note 16.

Other income (expense) or “Other” includes certain corporate tax-related items, foreign currency transaction gains and losses, environmental costs associated with sites no longer in operation, other costs not directly associated with an operating segment, gains/losses on the early retirement of debt, holding gains or losses on equity securities, and pension settlement expense. In the second quarter of 2022, “Other” decreased $476 million primarily due to the absence of unrealized gains associated with our CVE common shares which were fully divested in the first quarter of 2022 and premiums paid to repurchase debt. For the six-month period of 2022, "Other" increased $72 million. In addition to the items mentioned previously, during the first quarter of 2022, the IRS closed the 2017 audit of our U.S. federal income tax return, resulting in $474 million federal tax benefit. Also in the first quarter, we recognized an after-tax gain of $62 million associated with the debt restructuring transactions, partly offset by a $101 million tax impact associated with the disposition of our Indonesia assets. See Note 5 for information on our CVE common shares, Note 18 for information about the tax benefit, Note 6 for information regarding debt and Note 3 for information on our Indonesia divestiture.

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Capital Resources and Liquidity

Financial Indicators

			Millions of Dollars
			June 30 2022			December 31 2021
Cash and cash equivalents			$	6,909		5,028
Short-term investments			1,272			446
Total debt			16,971			19,934
Total equity			50,202			45,406
Percent of total debt to capital*			25		%	31
Percent of floating-rate debt to total debt			2		%	4

*Capital includes total debt and total equity.

To meet our short- and long-term liquidity requirements, we look to a variety of funding sources, including cash generated from operating activities, our commercial paper and credit facility programs, and our ability to sell securities using our shelf registration statement. During the first six months of 2022, the primary uses of our available cash were

$5.1 billion to support our ongoing capital expenditures and investments program, $3.7 billion to repurchase common stock, $2.9 billion net to reduce debt as part of refinancing transactions and retirements, $1.9 billion to pay dividends, including the ordinary dividend and a VROC, and $1.1 billion net purchases of investments.

At June 30, 2022, we had total liquidity of $13.7 billion, including cash and cash equivalents of $6.9 billion, short-term investments of $1.3 billion, and available borrowing capacity under our credit facility of $5.5 billion. We believe current cash balances and cash generated by operating activities, together with access to external sources of funds as described below in the “Significant Changes in Capital” section, will be sufficient to meet our funding requirements in the near- and long-term, including our capital spending program, acquisitions, dividend payments and debt obligations.

Significant Changes in Capital

Operating Activities

Cash provided by operating activities was $13.0 billion for the first six months of 2022, compared with $6.3 billion for the corresponding period of 2021. The increase in cash provided by operating activities is primarily due to higher realized commodity prices, higher sales volumes mostly due to our acquisition of Shell Permian assets, and the absence of the 2021 settlement of all oil and gas hedging positions acquired from Concho. The increase in cash provided by operating activities was partly offset by the timing of Libya tax and royalty payments occurring in the first quarter of 2022 as well as U.S. tax payments in the second quarter.

Our short- and long-term operating cash flows are highly dependent upon prices for crude oil, bitumen, natural gas, LNG and NGLs. Prices and margins in our industry have historically been volatile and are driven by market conditions over which we have no control. Absent other mitigating factors, as these prices and margins fluctuate, we would expect a corresponding change in our operating cash flows.

The level of production volumes, as well as product and location mix, impacts our cash flows. Future production is subject to numerous uncertainties, including, among others, the volatile crude oil and natural gas price environment, which may impact investment decisions; the effects of price changes on production sharing and variable-royalty contracts; acquisition and disposition of fields; field production decline rates; new technologies; operating efficiencies; timing of startups and major turnarounds; political instability; impacts of a global pandemic; weather-related disruptions; and the addition of proved reserves through exploratory success and their timely and cost-effective development. While we actively manage for these factors, production levels can cause variability in cash flows, although generally this variability has not been as significant as that caused by commodity prices.

To maintain or grow our production volumes, we must continue to add to our proved reserve base. See the “Capital Expenditures and Investments” section.

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Investing Activities

For the first six months of 2022, we invested $5.1 billion in capital expenditures and investments; $1.4 billion of which was acquisition capital for the additional 10 percent interest in APLNG, and the remainder funding our operating capital program. Our 2022 operating plan capital expenditures are currently expected to be $7.8 billion. This guidance excludes $1.4 billion of capital associated with increasing our APLNG interest. Our 2021 capital expenditures and investments were $5.3 billion. See the “Capital Expenditures and Investments” section.

In May 2021, we initiated the monetization of our investment in CVE common shares with the plan to direct proceeds toward our existing share repurchase program. We began disposing of our CVE shares in May 2021, and by the end of the first quarter, we fully divested of our investment, recognizing proceeds of $1.4 billion in the first quarter of 2022. Since inception, we have generated total proceeds of $2.5 billion. See Note 5. Other proceeds from dispositions received in the current year include our divestitures in Asia Pacific and Lower 48 segments for approximately $1.1 billion after customary adjustments and $362 million in contingent payments associated with prior divestitures. See Note 3.

In April 2022, we completed the sale of certain noncore assets in the Lower 48 segment for $370 million after customary adjustments. In July 2022, we entered into agreements to sell our interests in additional noncore assets in the Lower 48 segment for $265 million, before customary adjustments. These transactions are expected to close in the third quarter of 2022.

We invest in short-term investments as part of our cash investment strategy, the primary objective of which is to protect principal, maintain liquidity and provide yield and total returns; these investments include time deposits, commercial paper, as well as debt securities classified as available for sale. Funds for short-term needs to support our operating plan and provide resiliency to react to short-term price volatility are invested in highly liquid instruments with maturities within the year. Funds we consider available to maintain resiliency in longer term price downturns and to capture opportunities outside a given operating plan may be invested in instruments with maturities greater than one year.

Investing activities in the first six months of 2022 included net purchases of $1,104 million of investments. We had net purchases of $640 million of short-term instruments and $464 million of long-term instruments*.* See Note 13.

Financing Activities

In February 2022, we refinanced our revolving credit facility from a total aggregate principal amount of $6.0 billion to $5.5 billion with an expiration date of February 2027. The credit facility may be used for direct bank borrowings, the issuance of letters of credit totaling up to $500 million, or as support for our commercial paper program. With no commercial paper outstanding and no direct borrowings or letters of credit, we had access to $5.5 billion in available borrowing capacity under our revolving credit facility at June 30, 2022.

Our debt balance at June 30, 2022, was $17.0 billion compared with $19.9 billion at December 31, 2021. The current portion of debt, including payments for finance leases, is $0.7 billion. Payments will be made using current cash balances and cash generated by operating activities. In the second quarter of 2022, we repurchased notes and retired floating rate debt and in the first quarter of 2022, we executed a debt refinancing comprised of concurrent transactions including new debt issuances, a cash tender offer and debt exchange offers. In aggregate, the transactions reduced the company's total debt by $3.0 billion. The refinancing facilitates our ability to achieve our previously announced $5 billion debt reduction target by the end of 2026 while also reducing the company's annual cash interest expense.

The current credit ratings on our long-term debt are:

• Fitch: “A” with a “stable” outlook

• S&P: “A-” with a “stable” outlook

• Moody’s: “A3” with a “positive” outlook

See Note 6 for additional information on debt, revolving credit facility and credit ratings.

Certain of our project-related contracts, commercial contracts and derivative instruments contain provisions requiring us to post collateral. Many of these contracts and instruments permit us to post either cash or letters of credit as collateral. At June 30, 2022 and December 31, 2021, we had direct bank letters of credit of $320 million and $337 million, respectively, which secured performance obligations related to various purchase commitments incident to the ordinary conduct of business. In the event of credit ratings downgrades, we may be required to post additional letters of credit.

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Shelf Registration

We have a universal shelf registration statement on file with the SEC under which we have the ability to issue and sell an indeterminate number of various types of debt and equity securities.

Capital Requirements

For information about our capital expenditures and investments, see the “Capital Expenditures and Investments” section.

In 2021, as part of our objective to maintain a strong balance sheet, we announced our intention to reduce our total debt by $5 billion by 2026. In the first half of 2022, we executed concurrent debt refinancing transactions, repurchased existing notes, and retired floating rates notes upon natural maturity, that in aggregate reduced the company's total debt by

$3 billion and progressed the achievement of our debt reduction target while also lowering our annual cash interest expense and extending the weighted average maturity of our debt portfolio. See Note 6.

In December 2021, we announced our expected 2022 return of capital program and the initiation of a three-tier return of capital framework. The framework is structured to deliver a compelling, growing ordinary dividend and through-cycle share repurchases. In addition to the ordinary dividend and share repurchases, beginning in December 2021, the framework includes the addition of a discretionary VROC tier. The VROC will provide a flexible tool for meeting our commitment of returning greater than 30 percent of cash from operating activities during periods where commodity prices are meaningfully higher than our planning price range. Our expected 2022 total capital return is $15 billion, an increase of $5 billion from our previously announced target.

In the first six months of 2022, we paid ordinary dividends of $0.92 per common share. In addition, we paid VROC dividends of $0.50 per common share for dividends declared in the fourth quarter of 2021 and the first quarter of 2022. In the first six months of 2021, we paid ordinary dividends of $0.86 per common share. On August 4, 2022, we declared both a third-quarter ordinary dividend and a fourth-quarter VROC. The ordinary dividend is $0.46 per share payable September 1, 2022, to shareholders of record on August 16, 2022. The VROC is $1.40 per share, payable October 14, 2022 to shareholders of record on September 29, 2022

In late 2016, we initiated our current share repurchase program with Board of Director’s authorization of $25 billion of our common stock. As of June 30, 2022, share repurchases since the inception of our current program totaled 285 million shares and $17.9 billion. In the six months ended June 30, 2022, we repurchased 37.7 million shares for a cost of

$3.7 billion. Repurchases are made at management’s discretion, at prevailing prices, subject to market conditions and other factors.

See Part I—Item 1A—Risk Factors – “Our ability to execute our capital return program is subject to certain considerations” in our 2021 Annual Report on Form 10-K.

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Capital Expenditures and Investments

			Millions of Dollars
			Six Months Ended June 30
			2022			2021
Alaska			471			463
Lower 48			2,347			1,480
Canada			247			68
Europe, Middle East and North Africa			364			257
Asia Pacific			1,664			148
Other International			—			18
Corporate and Other			36			31
Capital expenditures and investments			5,129			2,465

During the first six months of 2022, capital expenditures and investments supported key operating activities and acquisitions, primarily:

• Development activities in the Lower 48, primarily Permian, Eagle Ford and Bakken.

• Appraisal and development activities in Alaska related to the Western North Slope and development activities in the Greater Kuparuk Area.

• Appraisal and development activities in the Montney and optimization of oil sands development in Canada.

• Development, exploration, and appraisal activities across assets in Norway.

• Continued development activities in Malaysia and China.

• Acquisition capital associated with 10 percent additional interest in APLNG.

Our 2022 operating plan capital expenditures is currently expected to be $7.8 billion compared with $5.3 billion in 2021.

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Guarantor Summarized Financial Information

We have various cross guarantees among our Obligor group; ConocoPhillips, ConocoPhillips Company and Burlington Resources LLC, with respect to publicly held debt securities. ConocoPhillips Company is 100 percent owned by ConocoPhillips. Burlington Resources LLC is 100 percent owned by ConocoPhillips Company. ConocoPhillips and/or ConocoPhillips Company have fully and unconditionally guaranteed the payment obligations of Burlington Resources LLC, with respect to its publicly held debt securities. Similarly, ConocoPhillips has fully and unconditionally guaranteed the payment obligations of ConocoPhillips Company with respect to its publicly held debt securities. In addition, ConocoPhillips Company has fully and unconditionally guaranteed the payment obligations of ConocoPhillips with respect to its publicly held debt securities. All guarantees are joint and several.

The following tables present summarized financial information for the Obligor Group, as defined below:

• The Obligor Group will reflect guarantors and issuers of guaranteed securities consisting of ConocoPhillips, ConocoPhillips Company and Burlington Resources LLC.

• Consolidating adjustments for elimination of investments in and transactions between the collective guarantors and issuers of guaranteed securities are reflected in the balances of the summarized financial information.

• Non-Obligated Subsidiaries are excluded from the presentation.

Transactions and balances reflecting activity between the Obligors and Non-Obligated Subsidiaries are presented below:

Summarized Income Statement Data

			Millions of Dollars
			Six Months Ended June 30, 2022
Revenues and Other Income			$	27,937
Income before income taxes*			10,478
Net Income			10,904

*Includes approximately $5.1 billion of purchased commodities expense for transactions with Non-Obligated Subsidiaries.

Summarized Balance Sheet Data

			Millions of Dollars
			June 30, 2022			December 31, 2021
Current assets			$	10,013		7,689
Amounts due from Non-Obligated Subsidiaries, current			2,268			1,927
Noncurrent assets			78,542			69,841
Amounts due from Non-Obligated Subsidiaries, noncurrent			8,343			7,281
Current liabilities			9,240			8,005
Amounts due to Non-Obligated Subsidiaries, current			4,624			3,477
Noncurrent liabilities			35,671			30,677
Amounts due to Non-Obligated Subsidiaries, noncurrent			20,343			13,007

Contingencies

We are subject to legal proceedings, claims, and liabilities that arise in the ordinary course of business. We accrue for losses associated with legal claims when such losses are considered probable and the amounts can be reasonably estimated. See Note 9.

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Legal and Tax Matters

We are subject to various lawsuits and claims including but not limited to matters involving oil and gas royalty and severance tax payments, gas measurement and valuation methods, contract disputes, environmental damages, climate change, personal injury, and property damage. Our primary exposures for such matters relate to alleged royalty and tax underpayments on certain federal, state and privately owned properties, claims of alleged environmental contamination and damages from historic operations, and climate change. We will continue to defend ourselves vigorously in these matters.

Our legal organization applies its knowledge, experience and professional judgment to the specific characteristics of our cases, employing a litigation management process to manage and monitor the legal proceedings against us. Our process facilitates the early evaluation and quantification of potential exposures in individual cases. This process also enables us to track those cases that have been scheduled for trial and/or mediation. Based on professional judgment and experience in using these litigation management tools and available information about current developments in all our cases, our legal organization regularly assesses the adequacy of current accruals and determines if adjustment of existing accruals, or establishment of new accruals, is required.

Environmental

We are subject to the same numerous international, federal, state and local environmental laws and regulations as other companies in our industry. For a discussion of the most significant of these environmental laws and regulations, including those with associated remediation obligations, see the “Environmental” section in Management’s Discussion and Analysis of Financial Condition and Results of Operations on pages 58–60 of our 2021 Annual Report on Form 10-K.

We occasionally receive requests for information or notices of potential liability from the EPA and state environmental agencies alleging that we are a potentially responsible party under the Federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) or an equivalent state statute. On occasion, we also have been made a party to cost recovery litigation by those agencies or by private parties. These requests, notices and lawsuits assert potential liability for remediation costs at various sites that typically are not owned by us, but allegedly contain waste attributable to our past operations. As of June 30, 2022, there were 15 sites around the U.S. in which we were identified as a potentially responsible party under CERCLA and comparable state laws.

At June 30, 2022, our balance sheet included a total environmental accrual of $178 million, compared with $187 million at December 31, 2021, for remediation activities in the U.S. and Canada. We expect to incur a substantial amount of these expenditures within the next 30 years.

Notwithstanding any of the foregoing, and as with other companies engaged in similar businesses, environmental costs and liabilities are inherent concerns in our operations and products, and there can be no assurance that material costs and liabilities will not be incurred. However, we currently do not expect any material adverse effect upon our results of operations or financial position as a result of compliance with current environmental laws and regulations.

See Part I—Item 1A—Risk Factors – "We expect to continue to incur substantial capital expenditures and operating costs as a result of our compliance with existing and future environmental laws and regulations" in our 2021 Annual Report on Form 10-K and Note 9 for information on environmental litigation.

Climate Change

Continuing political and social attention to the issue of global climate change has resulted in a broad range of proposed or promulgated state, national and international laws focusing on GHG reduction. These proposed or promulgated laws apply or could apply in countries where we have interests or may have interests in the future. Laws in this field continue to evolve, and while it is not possible to accurately estimate either a timetable for implementation or our future compliance costs relating to implementation, such laws, if enacted, could have a material impact on our results of operations and financial condition. For examples of legislation or precursors for possible regulation and factors on which the ultimate impact on our financial performance will depend, see the “Climate Change” section in Management’s Discussion and Analysis of Financial Condition and Results of Operations on pages 61–63 of our 2021 Annual Report on Form 10-K.

See Part I—Item 1A—Risk Factors – "Existing and future laws, regulations and internal initiatives relating to global climate changes, such as limitations on GHG emissions may impact or limit our business plans, result in significant expenditures, promote alternative uses of energy or reduce demand for our products" in our 2021 Annual Report on Form 10-K and Note 9 for information on climate change litigation.

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Company Response to Climate-Related Risks

The company has responded by putting in place a Sustainable Development Risk Management Standard covering the assessment and registration of significant and high sustainable development risks based on their consequence and likelihood of occurrence. We have developed a company-wide Climate Change Action Plan with the goal of tracking mitigation activities for each climate-related risk included in the corporate Sustainable Development Risk Register.

The risks addressed in our Climate Change Action Plan fall into four broad categories:

• GHG-related legislation and regulation.

• GHG emissions management.

• Physical climate-related impacts.

• Climate-related disclosure and reporting.

We announced in October 2020 the adoption of a Paris-aligned climate risk framework with the objective of implementing a coherent set of choices designed to facilitate the success of our existing exploration and production business through the energy transition. Given the uncertainties remaining about how the energy transition will evolve, the strategy aims to be robust across a range of potential future outcomes.

We announced in July 2022 that ConocoPhillips has joined the OGMP 2.0 initiative. The initiative's mission is to improve industry transparency in methane emissions reporting and encourage progress in reducing those emissions. We believe that applying the rigorous OGMP 2.0 reporting standards across our global assets will be a vital step towards meeting our Paris-aligned climate-risk commitments, including our net-zero ambition for operational emissions by 2050, and will allow us to credibly demonstrate how we are delivering against our methane improvement objectives and targets.

In 2022, we published our Plan for the Net-Zero Energy Transition (the ‘Plan’) focusing on meeting energy transition pathway demand, delivering competitive returns on and of capital and achieving our net-zero operational emissions ambitions.

Our Plan describes how we will:

• Build a resilient asset portfolio: Focus on low cost of supply and low GHG intensity resources.

• Commit to near, medium, and long-term targets: Reducing operational (Scope 1 and 2) emissions over which we have ownership and control with an ambition to become a net-zero company for Scope 1 and 2 emissions by 2050. These targets include:

• Strengthening our previously announced operational GHG emissions intensity reduction target to 40-50% by 2030 and expanding it to apply to both a gross operated and net equity basis.

• Meeting a further 10% reduction target for methane emissions intensity by 2025 from our 2019 baseline.

• Aiming to achieve zero routine flaring by 2025.

• Address end-use emissions: Advocate for a well-designed, economy-wide price on carbon that would help shift consumer demand from high-carbon to low-carbon energy sources.

• Pursue transition opportunities: Evaluate potential investments in emerging energy transition and low-carbon technologies.

• In 2021, we established a multi-disciplinary Low-Carbon Technologies organization to identify and evaluate business opportunities that address end-use emissions and early-stage low-carbon technology opportunities that would leverage our existing expertise and adjacencies.

• In the 2022 capital budget, we allocated $200 million to advance energy transition activities, the majority of which will address Scope 1 and 2 emissions reduction projects across our global operations, with the rest allocated for early-stage low-carbon technology opportunities.

• Track the energy transition: Utilize a comprehensive scenario planning process to calibrate and understand alternative energy transition pathways.

• Maintain capital discipline: Use scenario analyses and a fully-burdened cost of supply, including an appropriate cost of carbon, as the primary basis for capital allocation.

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Cautionary Statement for the Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

This report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact included or incorporated by reference in this report, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected revenues, projected costs and plans, objectives of management for future operations are forward-looking statements. Examples of forward-looking statements contained in this report include our expected production growth and outlook on the business environment generally, our expected capital budget and capital expenditures, and discussions concerning future dividends. You can often identify our forward-looking statements by the words “anticipate,” “believe,” “budget,” “continue,” “could,” “effort,” “estimate,” “expect,” “forecast,” “intend,” “goal,” “guidance,” “may,” “objective,” “outlook,” “plan,” “potential,” “predict,” “projection,” “seek,” “should,” “target,” “will,” “would” and similar expressions.

We based the forward-looking statements on our current expectations, estimates and projections about ourselves and the industries in which we operate in general. We caution you these statements are not guarantees of future performance as they involve assumptions that, while made in good faith, may prove to be incorrect, and involve risks and uncertainties we cannot predict. In addition, we based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecast in the forward-looking statements. Any differences could result from a variety of factors and uncertainties, including, but not limited to, the following:

• The impact of public health crises, including pandemics (such as COVID-19) and epidemics and any related company or government policies or actions.

• Global and regional changes in the demand, supply, prices, differentials or other market conditions affecting oil and gas, including changes as a result of any ongoing military conflict, including the conflict between Russia and Ukraine, and the global response to such conflict, or from a public health crisis or from the imposition or lifting of crude oil production quotas or other actions that might be imposed by OPEC and other producing countries and the resulting company or third-party actions in response to such changes.

• Fluctuations in crude oil, bitumen, natural gas, LNG and NGLs prices, including a prolonged decline in these prices relative to historical or future expected levels.

• The impact of significant declines in prices for crude oil, bitumen, natural gas, LNG and NGLs, which may result in recognition of impairment charges on our long-lived assets, leaseholds and nonconsolidated equity investments.

• The potential for insufficient liquidity or other factors, such as those described herein, that could impact our ability to repurchase shares and declare and pay dividends, whether fixed or variable.

• Potential failures or delays in achieving expected reserve or production levels from existing and future oil and gas developments, including due to operating hazards, drilling risks and the inherent uncertainties in predicting reserves and reservoir performance.

• Reductions in reserves replacement rates, whether as a result of the significant declines in commodity prices or otherwise.

• Unsuccessful exploratory drilling activities or the inability to obtain access to exploratory acreage.

• Unexpected changes in costs, inflationary pressures or technical requirements for constructing, modifying or operating E&P facilities.

• Legislative and regulatory initiatives addressing environmental concerns, including initiatives addressing the impact of global climate change or further regulating hydraulic fracturing, methane emissions, flaring or water disposal.

• Lack of, or disruptions in, adequate and reliable transportation for our crude oil, bitumen, natural gas, LNG and NGLs.

• Inability to timely obtain or maintain permits, including those necessary for construction, drilling and/or development, or inability to make capital expenditures required to maintain compliance with any necessary permits or applicable laws or regulations.

• Failure to complete definitive agreements and feasibility studies for, and to complete construction of, announced and future E&P and LNG development in a timely manner (if at all) or on budget.

53			ConocoPhillips 2022 Q2 10-Q

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• Potential disruption or interruption of our operations due to accidents, extraordinary weather events, supply chain disruptions, civil unrest, political events, war, terrorism, cyber attacks, and information technology failures, constraints or disruptions.

• Changes in international monetary conditions and foreign currency exchange rate fluctuations.

• Changes in international trade relationships, including the imposition of trade restrictions or tariffs relating to crude oil, bitumen, natural gas, LNG, NGLs and any materials or products (such as aluminum and steel) used in the operation of our business, including any sanctions imposed as a result of any ongoing military conflict, including the conflict between Russia and Ukraine.

• Substantial investment in and development use of, competing or alternative energy sources, including as a result of existing or future environmental rules and regulations.

• Liability for remedial actions, including removal and reclamation obligations, under existing and future environmental regulations and litigation.

• Significant operational or investment changes imposed by existing or future environmental statutes and regulations, including international agreements and national or regional legislation and regulatory measures to limit or reduce GHG emissions.

• Liability resulting from litigation, including litigation directly or indirectly related to the transaction with Concho Resources Inc., or our failure to comply with applicable laws and regulations.

• General domestic and international economic and political developments, including armed hostilities; expropriation of assets; changes in governmental policies relating to crude oil, bitumen, natural gas, LNG and NGLs pricing; regulation or taxation; and other political, economic or diplomatic developments, including as a result of any ongoing military conflict, including the conflict between Russia and Ukraine.

• Volatility in the commodity futures markets.

• Changes in tax and other laws, regulations (including alternative energy mandates), or royalty rules applicable to our business.

• Competition and consolidation in the oil and gas E&P industry.

• Any limitations on our access to capital or increase in our cost of capital, including as a result of illiquidity or uncertainty in domestic or international financial markets or investment sentiment.

• Our inability to execute, or delays in the completion of, any asset dispositions or acquisitions we elect to pursue.

• Potential failure to obtain, or delays in obtaining, any necessary regulatory approvals for pending or future asset dispositions or acquisitions, or that such approvals may require modification to the terms of the transactions or the operation of our remaining business.

• Potential disruption of our operations as a result of pending or future asset dispositions or acquisitions, including the diversion of management time and attention.

• Our inability to deploy the net proceeds from any asset dispositions that are pending or that we elect to undertake in the future in the manner and timeframe we currently anticipate, if at all.

• The operation and financing of our joint ventures.

• The ability of our customers and other contractual counterparties to satisfy their obligations to us, including our ability to collect payments when due from the government of Venezuela or PDVSA.

• Our inability to realize anticipated cost savings and capital expenditure reductions.

• The inadequacy of storage capacity for our products, and ensuing curtailments, whether voluntary or involuntary, required to mitigate this physical constraint.

• The risk that we will be unable to retain and hire key personnel.

• Unanticipated integration issues relating to the acquisition of assets from Shell, such as potential disruptions of our ongoing business and higher than anticipated integration costs.

• Uncertainty as to the long-term value of our common stock.

• The diversion of management time on integration-related matters.

• The factors generally described in Part I—Item 1A in our 2021 Annual Report on Form 10-K and any additional risks described in our other filings with the SEC.

			ConocoPhillips 2022 Q2 10-Q			54

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