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 “ambition,” “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 50**.

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 one of the world’s leading E&P companies based on production and reserves, with operations and activities in 15 countries. Our diverse, low cost of supply portfolio includes resource-rich unconventional plays in North America; conventional assets in North America, Europe, Africa and Asia; global LNG developments; oil sands in Canada; and an inventory of global exploration prospects. Headquartered in Houston, Texas, at March 31, 2025, we employed approximately 11,800 people worldwide and had total assets of $124 billion.

Overview

At ConocoPhillips, we anticipate that commodity 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 upside during periods of higher prices. As such, we are unhedged, remain committed to our disciplined investment framework and continually monitor market fundamentals, including the impacts associated with geopolitical tensions and conflicts, global demand for our products, oil and gas inventory levels, governmental policies, tariffs, inflation and supply chain disruptions.

In the second quarter of 2025, we began to see the price of crude oil decline due to several macroeconomic market impacts. This includes the U.S. announcing the imposition of broad-ranging tariffs on several U.S. trade partners and the related reactions to such tariffs, including retaliatory tariffs. There is significant uncertainty as to the scope and duration of these or any future tariffs. Other macroeconomic market impacts include actions taken by OPEC Plus and other major oil producing countries. We are continuing to closely monitor the macroeconomic environment, and despite ongoing market volatility in the energy landscape and across global markets, we believe our business strategy will continue providing value in volatile environments; however, the ultimate impact on the company's results of operations and financial condition remains uncertain.

The global energy industry continues to evolve. We believe ConocoPhillips plays an essential role in responsibly meeting the global demand for energy, while continuing to deliver competitive returns on and of capital and working to meet our previously established emissions-reduction targets. We call this our Triple Mandate, and it represents our commitment to create long-term value for stockholders. Our value proposition to deliver competitive returns to stockholders through price cycles is guided by our foundational principles which consist of maintaining balance sheet strength, providing peer-leading distributions, making disciplined investments, and demonstrating responsible and reliable ESG performance.

31			ConocoPhillips 2025 Q1 10-Q

Management’s Discussion and Analysis			Table of Contents

In November 2024, we completed our acquisition of Marathon Oil Corporation (Marathon Oil). In the first quarter of 2025, we continued to integrate the acquired assets into our portfolio. We expect to capture greater than $1 billion in synergies on a run rate basis within the first full year following the close of the transaction. See Note 3.

In conjunction with our acquisition of Marathon Oil, we communicated a disposition proceeds target of $2 billion across the portfolio. Through May 2025, we have closed definitive agreements to dispose of certain assets in the Lower 48 segment for proceeds of approximately $1.3 billion. This is inclusive of noncore assets in our Lower 48 segment disposed of in the first quarter of 2025 as well as the disposition of the Ursa and Europa Fields, and Ursa Oil Pipeline Company LLC in the second quarter of 2025. See Note 3.

In May 2025, we declared a second-quarter ordinary dividend of $0.78 per share.

Operationally, we remain focused on safely executing the business while also progressing key strategic initiatives. At Willow, we made significant progress during the winter construction season and achieved critical milestones. In the Lower 48, we continued to execute our program as well as integrate Marathon Oil assets into our portfolio, focusing on operating and capital efficiencies. Internationally, we became the sole operator of the Kebabangan Cluster (KBBC) PSC in Malaysia in January 2025, extending the PSC to 2050 and making KBBC our first operated producing asset in Malaysia. We also achieved first oil at partner-operated Gumusut Phase 4 in February 2025.

Production was 2,389 MBOED in the first quarter of 2025, an increase of 487 MBOED from the same period a year ago. After adjusting for impacts from closed acquisitions and dispositions, first-quarter 2025 production increased by 115 MBOED or five percent from the same period a year ago.

First-quarter 2025 production resulted in $6.1 billion of cash provided by operating activities. We returned $2.5 billion to shareholders, consisting of $1.5 billion through share repurchases and $1 billion through our ordinary dividend. We ended the quarter with cash, cash equivalents, restricted cash and short-term investments totaling $7.5 billion and long-term investments in debt securities of $1.0 billion.

Also in the first quarter of 2025, we re-invested $3.4 billion into the business in the form of capital expenditures and investments, with over half of the expenditures related to flexible, short-cycle unconventional plays in the Lower 48 segment, where our production has access to both domestic and export markets.

			ConocoPhillips 2025 Q1 10-Q			32

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 include, but are not limited to, 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, tariffs, 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 U.S. Henry Hub natural gas:

Brent crude oil prices averaged $75.66 per barrel in the first quarter of 2025, a decrease of nine percent compared with $83.24 per barrel in the first quarter of 2024. WTI at Cushing crude oil prices averaged $71.42 per barrel in the first quarter of 2025, a decrease of seven percent compared with $76.96 per barrel in the first quarter of 2024. Oil prices were lower in the first quarter of 2025 due to higher than expected global oil supplies and elevated geopolitical uncertainties impacting markets.

U.S. Henry Hub natural gas prices averaged $3.65 per MMBTU in the first quarter of 2025, an increase of 62 percent compared with $2.25 per MMBTU in the first quarter of 2024. U.S. Henry Hub prices improved due to cold winter weather and stronger demand. Lower 48 segment realized gas prices improved in the first quarter of 2025 primarily due to fewer third-party pipeline constraints. Volatility in regional markers is expected throughout 2025.

Our realized bitumen price averaged $45.29 per barrel in the first quarter of 2025, an increase of two percent compared with $44.30 per barrel in the first quarter of 2024. The increase in the first quarter of 2025 was driven by narrowing WCS differentials due to increased egress at the Trans Mountain Pipeline Expansion. We continue to optimize bitumen price realizations through enhanced diluent recovery unit operations, blending and transportation strategies.

For the first quarter of 2025, our total average realized price was $53.34 per BOE compared with $56.60 per BOE in the first quarter of 2024.

33			ConocoPhillips 2025 Q1 10-Q

Management’s Discussion and Analysis			Table of Contents

Key Operating and Financial Summary

• Reported first-quarter 2025 earnings per share of $2.23;

• Generated cash provided by operating activities of $6.1 billion;

• Lowered full-year capital expenditure guidance while maintaining full-year production guidance;

• Declared second-quarter ordinary dividend of $0.78 per share;

• Delivered total company and Lower 48 production of 2,389 MBOED and 1,462 MBOED, respectively;

• Achieved record Eagle Ford drilling performance from leveraging combined best practices;

• Completed the largest winter construction season at Willow and achieved critical milestones;

• Completed $1.3 billion of noncore Lower 48 asset sales, including $0.6 billion during the quarter and $0.7 billion in May with the close of Ursa and associated assets;

• Distributed $2.5 billion to shareholders, including $1.5 billion through share repurchases and $1.0 billion through the ordinary dividend;

• Retired $0.5 billion of debt at maturity; and

• Ended the quarter with cash, cash equivalents, restricted cash and short-term investments of $7.5 billion and long-term investments of $1.0 billion.

Outlook

Production and Capital

Second-quarter 2025 production is expected to be 2.34 to 2.38 MMBOED.

Full-year capital expenditure guidance is lowered to $12.3 to $12.6 billion versus prior guidance of approximately $12.9 billion.

All other guidance remains unchanged. Guidance includes the impact from closed dispositions.

			ConocoPhillips 2025 Q1 10-Q			34

Results of Operations			Table of Contents

Results of Operations

Unless otherwise indicated, discussion of consolidated results for the three-month period ended March 31, 2025, is based on a comparison with the corresponding period of 2024.

Consolidated Results

Summary Operating Statistics

			Three Months Ended March 31
			2025			2024
Average Net Production
Crude oil (MBD)
Consolidated operations			1,153			928
Equity affiliates			13			16
Total crude oil			1,166			944
Natural gas liquids (MBD)
Consolidated operations			394			271
Equity affiliates			8			8
Total natural gas liquids			402			279
Bitumen (MBD)			143			129
Natural gas (MMCFD)
Consolidated operations			2,840			2,035
Equity affiliates			1,230			1,267
Total natural gas			4,070			3,302
Total Production (MBOED)			2,389			1,902
Total Production (MMBOE)			215			173

			Dollars Per Unit
Average Sales Prices
Crude oil (per bbl)
Consolidated operations			$	71.61		78.67
Equity affiliates			75.57			76.94
Total crude oil			71.65			78.64
Natural gas liquids (per bbl)
Consolidated operations			24.86			23.35
Equity affiliates			52.34			52.09
Total natural gas liquids			25.40			24.25
Bitumen (per bbl)			45.29			44.30
Natural gas (per MCF)
Consolidated operations			4.76			2.91
Equity affiliates			7.56			8.26
Total natural gas			$	5.62		5.02

35			ConocoPhillips 2025 Q1 10-Q

Results of Operations			Table of Contents

			Millions of Dollars
			Three Months Ended March 31
			2025			2024
Exploration Expenses
General administrative, geological and geophysical, lease rental and other			$	56		93
Leasehold impairment			18			—
Dry holes			43			19
			$	117		112

Total Company Production

We explore for, produce, transport and market crude oil, bitumen, natural gas, LNG and NGLs on a worldwide basis. In the quarter ended March 31, 2025, our operations were producing in the U.S., Australia, Canada, China, Equatorial Guinea, Libya, Malaysia, Norway and Qatar.

Total production in the first quarter of 2025 was 2,389 MBOED, an increase of 487 MBOED or 26 percent from the same period a year ago. Production increases include:

• New wells online in the Lower 48, Alaska, Australia, Canada, China, Libya, Malaysia and Norway.

• Our acquisition of Marathon Oil, which closed in November 2024. See Note 3.

Production increases were partially offset by normal field decline.

After adjusting for impacts from closed acquisitions and dispositions, first-quarter 2025 production increased by 115 MBOED or five percent from the same period a year ago.

			ConocoPhillips 2025 Q1 10-Q			36

Results of Operations			Table of Contents

Income Statement Analysis

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

Below is select financial data provided on a consolidated basis. The full Income Statement can be found in Item 1. Financial Statements.

			Millions of Dollars
			Three Months Ended March 31
			2025			2024
Sales and other operating revenues			$	16,517		13,848
Purchased commodities			6,188			5,334
Production and operating expenses			2,506			2,015
Depreciation, depletion and amortization			2,746			2,211
Taxes other than income taxes			551			555

Sales and other operating revenues in the first quarter of 2025 increased $2,669 million due to higher volumes of $2,027 million inclusive of sales volumes from our acquisition of Marathon Oil; higher gas, bitumen and NGL realized prices of $539 million and timing of sales as compared to the prior period. The increases in sales and other operating revenue were partly offset by lower crude realized prices of $733 million. See Note 3.

Purchased commodities in the first quarter of 2025 increased $854 million due to higher volumes associated with our acquisition of Marathon Oil, higher crude volumes and gas prices, partly offset by lower crude prices. See Note 3.

Production and operating expenses in the first quarter of 2025 increased $491 million primarily due to impacts from our acquisition of Marathon Oil in the fourth quarter of 2024. See Note 3.

DD&A expenses in the first quarter of 2025 increased $535 million mainly due to impacts from our acquisition of Marathon Oil in the fourth quarter of 2024. See Note 3.

37			ConocoPhillips 2025 Q1 10-Q

Results of Operations			Table of Contents

Segment Results

Unless otherwise indicated, discussion of segment results for the three-month period ended March 31, 2025, is based on a comparison with the corresponding period of 2024 and are shown after-tax.

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

			Millions of Dollars
			Three Months Ended March 31
			2025			2024
Alaska			$	327		346
Lower 48			1,790			1,381
Canada			256			180
Europe, Middle East and North Africa			419			304
Asia Pacific			311			512
Other International			2			(1)
Corporate and Other			(256)			(171)
Net income (loss)			$	2,849		2,551

For further discussion of segment results, see the following pages.

			ConocoPhillips 2025 Q1 10-Q			38

Results of Operations			Table of Contents

Alaska

			Three Months Ended March 31
			2025			2024
Select financial data by segment before-tax ($MM)
Sales and other operating revenues			$	1,610		1,670
Production and operating expenses			506			479
Depreciation, depletion and amortization			355			324
Taxes other than income taxes			60			134
Net Income (Loss) ($MM)			$	327		346
Average Net Production
Crude oil (MBD)			184			180
Natural gas liquids (MBD)			16			14
Natural gas (MMCFD)			48			42
Total Production (MBOED)			208			201
Total Production (MMBOE)			19			18
Average Sales Prices
Crude oil ($ per bbl)			$	76.58		83.59
Natural gas ($ per MCF)			3.87			3.91

The Alaska segment primarily explores for, produces, transports and markets crude oil, NGLs and natural gas. As of March 31, 2025, Alaska contributed 12 percent of our consolidated liquids production and two percent of our consolidated natural gas production.

Net Income (Loss)

Alaska reported earnings of $327 million in the first quarter of 2025 compared with earnings of $346 million in the first quarter of 2024.

Earnings in the first quarter of 2025 included lower revenues resulting from lower realized prices of $89 million, partly offset by higher volumes of $22 million. Decreases to earnings included higher DD&A expenses of $22 million. Increases to earnings included lower taxes other than income taxes of $52 million driven by an impact from the settlement of a contingent matter and lower exploration expenses primarily due to absence of seismic work of $26 million from the first quarter of 2024.

Production

Average production increased seven MBOED in the three-month period of 2025. Increases to production were primarily due to new wells online, less downtime and production from our fourth quarter of 2024 acquisition of additional working interest in the Kuparuk River Unit and Prudhoe Bay Unit.

The production increases were partly offset by normal field decline.

39			ConocoPhillips 2025 Q1 10-Q

Results of Operations			Table of Contents

Lower 48

			Three Months Ended March 31
			2025			2024
Select financial data by segment before-tax ($MM)
Sales and other operating revenues			$	11,548		9,308
Production and operating expenses			1,491			1,083
Depreciation, depletion and amortization			1,904			1,432
Taxes other than income taxes			429			350
Net Income (Loss) ($MM)			$	1,790		1,381
Average Net Production
Crude oil (MBD)			753			553
Natural gas liquids (MBD)			363			247
Natural gas (MMCFD)			2,080			1,479
Total Production (MBOED)			1,462			1,046
Total Production (MMBOE)			132			95
Average Sales Prices
Crude oil ($ per bbl)			$	69.47		75.51
Natural gas liquids ($ per bbl)			24.84			22.67
Natural gas ($ per MCF)			2.65			1.57

The Lower 48 segment consists of operations located in the U.S. Lower 48 states and commercial operations. As of March 31, 2025, the Lower 48 contributed 66 percent of our consolidated liquids production and 73 percent of our consolidated natural gas production.

Net Income (Loss)

Lower 48 reported earnings of $1,790 million in the first quarter of 2025 compared with earnings of $1,381 million in the first quarter of 2024.

Earnings in the first quarter of 2025 included higher revenues resulting from higher volumes of $1,305 million, which included volumes from our acquisition of Marathon Oil. Additional increases to revenues included timing of sales, partly offset by lower overall realized prices of $109 million, driven by lower crude prices. Decreases to earnings in the first quarter of 2025 included higher DD&A expenses of $378 million and higher production and operating expenses of $326 million, primarily from our acquisition of Marathon Oil. See Note 3.

Production

Average production increased 416 MBOED in the three-month period of 2025. Increases to production were primarily due to new wells online from our development programs in the Delaware Basin, Eagle Ford, Midland Basin and Bakken. Production also increased due to our acquisition of Marathon Oil in November 2024. See Note 3.

Production increases were partly offset by normal field decline.

Asset Dispositions and Held For Sale

Through May 2025, we have completed divestitures of noncore assets totaling approximately $1.3 billion in proceeds. Production from these assets averaged approximately 26 MBOED in 2024. This is inclusive of noncore assets disposed of in the first quarter of 2025 as well as the disposition of the Ursa and Europa Fields, and Ursa Oil Pipeline Company LLC in the second quarter of 2025. See Note 3.

			ConocoPhillips 2025 Q1 10-Q			40

Results of Operations			Table of Contents

Canada

			Three Months Ended March 31
			2025			2024
Select financial data by segment before-tax ($MM)
Sales and other operating revenues			$	985		936
Production and operating expenses			201			217
Depreciation, depletion and amortization			131			158
Taxes other than income taxes			9			11
Net Income (Loss) ($MM)			$	256		180
Average Net Production
Crude oil (MBD)			17			18
Natural gas liquids (MBD)			6			6
Bitumen (MBD)			143			129
Natural gas (MMCFD)			109			100
Total Production (MBOED)			184			170
Total Production (MMBOE)			17			15
Average Sales Prices
Crude oil ($ per bbl)			$	62.41		64.40
Natural gas liquids ($ per bbl)			27.96			35.47
Bitumen ($ per bbl)			45.29			44.30
Natural gas ($ per MCF)*			1.35			1.01

*Average sales prices include unutilized transportation costs.

The Canada segment operations include the Surmont oil sands development in Alberta, the Montney unconventional play in British Columbia and commercial operations. As of March 31, 2025, Canada contributed 10 percent of our consolidated liquids production and four percent of our consolidated natural gas production.

Net Income (Loss)

Canada reported earnings of $256 million in the first quarter of 2025 compared with earnings of $180 million in the first quarter of 2024.

Earnings in the first quarter of 2025 included higher revenues driven primarily by higher volumes of $33 million. Additional increases to earnings resulted from lower DD&A expenses of $20 million driven by year-end upward reserve revisions and lower production and operating expenses of $12 million, driven by lower workover activity.

Production

Average production increased 14 MBOED in the three-month period of 2025. Increases to production resulted from new wells online in the Montney and Surmont.

Production increases were partly offset by normal field decline.

41			ConocoPhillips 2025 Q1 10-Q

Results of Operations			Table of Contents

Europe, Middle East and North Africa

			Three Months Ended March 31
			2025			2024
Select financial data by segment before-tax ($MM)
Sales and other operating revenues			$	1,940		1,457
Production and operating expenses			224			154
Depreciation, depletion and amortization			219			180
Taxes other than income taxes			12			11
Net Income (Loss) ($MM)			$	419		304
Consolidated Operations
Average Net Production
Crude oil (MBD)			136			118
Natural gas liquids (MBD)			9			4
Natural gas (MMCFD)			538			358
Total Production (MBOED)			235			182
Total Production (MMBOE)			21			17
Average Sales Prices
Crude oil ($ per bbl)			$	74.60		84.83
Natural gas liquids ($ per bbl)			23.76			46.32
Natural gas ($ per MCF)			13.16			8.81

Production and sales prices exclude equity affiliates. See Summary Operating Statistics for equity affiliate totals.

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, Equatorial Guinea and commercial and terminalling operations in the U.K. As of March 31, 2025, our Europe, Middle East and North Africa operations contributed eight percent of our consolidated liquids production and 19 percent of our consolidated natural gas production.

Net Income (Loss)

Europe, Middle East and North Africa reported earnings of $419 million in the first quarter of 2025 compared with earnings of $304 million in the first quarter of 2024.

Earnings in the first quarter of 2025 included higher revenues resulting from higher volumes of $90 million, which included volumes added from our acquisition of Marathon Oil and higher realized prices of $21 million impacted by higher gas prices. See Note 3.

Consolidated Production

Average consolidated production increased 53 MBOED in the three-month period of 2025. Increases to production were due to the impact from assets acquired from Marathon Oil as well as new wells online in Norway and Libya. See Note 3.

Production increases were partly offset by normal field decline.

			ConocoPhillips 2025 Q1 10-Q			42

Results of Operations			Table of Contents

Asia Pacific

			Three Months Ended March 31
			2025			2024
Select financial data by segment before-tax ($MM)
Sales and other operating revenues			$	424		474
Production and operating expenses			65			79
Depreciation, depletion and amortization			119			110
Taxes other than income taxes			17			28
Net Income (Loss) ($MM)			$	311		512
Consolidated Operations
Average Net Production
Crude oil (MBD)			63			59
Natural gas (MMCFD)			65			56
Total Production (MBOED)			74			68
Total Production (MMBOE)			7			6
Average Sales Prices
Crude oil ($ per bbl)			$	76.64		85.05
Natural gas ($ per MCF)			3.67			3.68

Production and sales prices exclude equity affiliates. See Summary Operating Statistics for equity affiliate totals.

The Asia Pacific segment has operations in China, Malaysia, Australia and commercial operations in China, Singapore and Japan. As of March 31, 2025, Asia Pacific contributed four percent of our consolidated liquids production and two percent of our consolidated natural gas production.

Net Income (Loss)

Asia Pacific reported earnings of $311 million in the first quarter of 2025 compared with earnings of $512 million in the first quarter of 2024.

Earnings in the first quarter of 2025 included lower revenues resulting from lower realized prices of $40 million, partly offset by higher volumes of $24 million. Decreases to earnings included the absence of a $76 million tax benefit associated with a deepwater investment tax incentive for Malaysia blocks J and G; lower earnings from equity affiliates of $76 million, primarily due to lower LNG sales prices; and higher exploration expenses of $37 million driven primarily by dry hole expenses associated with certain suspended wells. See Note 7 and Note 19.

Consolidated Production

Average consolidated production increased six MBOED in the three-month period of 2025. Increases to production were primarily due to development activity in Bohai Bay in China and Gumusut in Malaysia; an increase in crude oil entitlement percentage and higher gas demand in Malaysia.

Production increases were partly offset by normal field decline.

Gumusut Phase 4 First Production in Malaysia

In February 2025, Phase 4 of the partner-operated Gumusut field which straddles the Malaysia-Brunei border, reached first production.

43			ConocoPhillips 2025 Q1 10-Q

Results of Operations			Table of Contents

Other International

			Three Months Ended March 31
			2025			2024
Net Income (Loss) ($MM)			$	2		(1)

The Other International segment consists of activities associated with prior operations in other countries.

Corporate and Other

			Millions of Dollars
			Three Months Ended March 31
			2025			2024
Net Income (Loss)
Net interest expense			$	(111)		(93)
Corporate G&A expenses			(110)			(105)
Technology			(18)			(24)
Other income (expense)			(17)			51
			$	(256)		(171)

Net interest expense consists of interest and debt expense, net of interest income and capitalized interest. Net interest expense was impaired due to higher interest expense of $60 million driven by our acquisition of Marathon Oil, partly offset by an impact to interest expense of $36 million from the settlement of a contingent matter.

Corporate G&A expenses include compensation programs and staff costs. Corporate G&A expenses increased $5 million in the first quarter of 2025, primarily due to transaction and integration expenses associated with our acquisition of Marathon Oil, partially offset by mark to market adjustments associated with certain compensation programs.

Technology includes our investments in low-carbon and other new technologies or businesses and licensing revenues. Other new technologies or businesses and licensing activities are focused on both conventional and tight oil reservoirs, shale gas, oil sands, enhanced oil recovery, as well as LNG.

Other income (expense) or “Other” includes certain consolidating 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. “Other” was impaired in the first quarter of 2025 primarily due to lower tax benefits related to stock compensation of $38 million and a first quarter 2025 consolidating tax adjustment of $28 million.

			ConocoPhillips 2025 Q1 10-Q			44

Capital Resources and Liquidity			Table of Contents

Capital Resources and Liquidity

Financial Indicators

			Millions of Dollars
			March 31 2025			December 31 2024
Cash and cash equivalents			$	6,309		5,607
Short-term investments			926			507
Total debt			23,784			24,324
Total equity			65,238			64,796
Percent of total debt to capital*			27		%	27
Percent of floating-rate debt to total debt			1		%	1

*Capital includes total debt and total equity.

To meet our short-term 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 three months of 2025, the primary uses of our available cash were $3.4 billion to support our ongoing capital expenditures and investments program, $1.5 billion to repurchase common stock, $1.0 billion to pay the ordinary dividend, $0.5 billion to retire debt at maturity and $0.4 billion net purchases of investments, partly offset by non-core asset sales of $0.6 billion and invoice payment timing of $1.3 billion.

At March 31, 2025, we had total liquidity of $12.7 billion, comprised of cash and cash equivalents of $6.3 billion, short-term investments of $0.9 billion and available borrowing capacity under our credit facility of $5.5 billion. In addition, we have $1.0 billion of long-term investments in debt securities. 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 $6.1 billion for the first three months of 2025, compared with $5.0 billion for the corresponding period of 2024. The increase in cash is primarily due to changes in operational working capital, driven by invoice and tax payment timing, and higher sales volumes from our acquisition of the Marathon Oil assets in the fourth quarter of 2024. See Note 3.

Our short-term 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 absolute production volumes, as well as product and location mix, is another significant factor impacting 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; government regulations; 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 monitor and manage these factors, changes in production levels can cause variability in cash flows, although we generally experience less variability in our cash flows due to changes in production levels than due to changes in 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.

45			ConocoPhillips 2025 Q1 10-Q

Capital Resources and Liquidity			Table of Contents

Investing Activities

For the first three months of 2025, we invested $3.4 billion in capital expenditures and investments. Our 2025 operating plan capital expenditures are currently expected to be $12.3 billion to $12.6 billion. Our 2024 capital expenditures and investments were $12.1 billion. See the “Capital Expenditures and Investments” section.

In the first three months of 2025, net cash used in investing activities was impacted by an increase in working capital changes associated with investing activities of $827 million, due to timing of invoice payments.

In the first quarter of 2025, we recognized proceeds from asset dispositions of $0.6 billion. Subsequent to the quarter, we closed our disposition of Ursa and Europa Fields, and Ursa Oil Pipeline Company for $0.7 billion. Through May 2025, total proceeds from these dispositions in our Lower 48 segment are approximately $1.3 billion. See Note 3.

We invest in short-term and long-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. Short-term funds needed to support our operating plan and provide resiliency to react to short-term price volatility are invested in highly liquid instruments with maturities less than one 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. See Note 10.

Investing activities in the first three months of 2025 included net purchases of $400 million of investments. We had net purchases of $261 million of short-term investments and net purchases of $139 million of long-term investments*.* See Note 13.

Financing Activities

In February 2025, we refinanced our revolving credit facility maintaining a total aggregate principal amount of $5.5 billion and extended the expiration to February 2030. 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 March 31, 2025.

Our debt balance at March 31, 2025, was $23.8 billion compared with $24.3 billion at December 31, 2024. The current portion of debt, including future payments for finance leases, is $0.6 billion at March 31, 2025. In the first quarter of 2025, the company retired $0.5 billion principal amount of debt at maturity, consisting of $0.4 billion of our 2.4% Notes and $0.1 billion of our 8.2% Debentures. Debt payments are expected to be made using current cash balances and cash provided by operating activities.

In February 2025, Moody's affirmed our long-term credit rating. The current long-term debt credit ratings are:

• Fitch: “A” with a “stable” outlook

• S&P: “A-” with a “stable” outlook

• Moody's: "A2" with a "stable" outlook

See Note 5 for additional information on debt and the revolving credit facility.

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 March 31, 2025, and December 31, 2024, we had direct bank letters of credit of $284 million and $278 million, respectively, which secured performance obligations related to various purchase commitments incident to the ordinary conduct of business. In the event of a credit rating downgrade, we may be required to post additional letters of credit.

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.

			ConocoPhillips 2025 Q1 10-Q			46

Capital Resources and Liquidity			Table of Contents

Capital Requirements

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

We believe in delivering value to our shareholders through our return of capital framework. The framework is structured to deliver a compelling, growing ordinary dividend and through-cycle share repurchases. We anticipate returning greater than 30 percent of cash from operating activities through cycles.

In the first three months of 2025, we paid ordinary dividends of $0.78 per share and in the first three months of 2024, we paid ordinary dividends of $0.58 per share and VROC payments of $0.20 per share.

In May 2025, we declared an ordinary dividend of $0.78 per share, payable June 2, 2025, to shareholders of record at the close of business on May 19, 2025.

In late 2016, we initiated our current share repurchase program. In October 2024, our Board of Directors approved an increase from our prior authorization of $45 billion by a total of the lesser of $20 billion or the number of shares issued in our acquisition of Marathon Oil, such that the Company is not to exceed $65 billion in aggregate purchases. Share repurchases are made at management’s discretion, at prevailing prices, subject to market conditions and other factors. As of March 31, 2025, share repurchases since the inception of our current program totaled 447.7 million shares and $35.8 billion. In the three months ended March 31, 2025, we repurchased 15.1 million shares for a cost of $1.5 billion.

See Part I—Item 1A—Risk Factors – “Our ability to execute our capital return program is subject to certain considerations” in our 2024 Annual Report on Form 10-K.

Capital Expenditures and Investments

			Millions of Dollars
			Three Months Ended March 31
			2025			2024
Alaska			$	1,046		720
Lower 48			1,814			1,616
Canada			165			152
Europe, Middle East and North Africa			274			219
Asia Pacific			54			45
Corporate and Other			25			164
Capital expenditures and investments			$	3,378		2,916

During the first three months of 2025, capital expenditures and investments supported key operating activities and acquisitions, primarily:

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

• Development activities in the Lower 48, primarily in the Delaware Basin, Eagle Ford, Midland Basin and Bakken.

• Appraisal and development activities in the Montney as well as development and optimization of Surmont in Canada.

• Development activities across assets in Norway and Libya.

• Continued development activities in China.

• Investments in our global LNG operations.

Our 2025 operating plan capital expenditure guidance is currently expected to be $12.3 billion to $12.6 billion. Our operating plan capital was $12.1 billion in 2024.

47			ConocoPhillips 2025 Q1 10-Q

Capital Resources and Liquidity			Table of Contents

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
			Three Months Ended March 31, 2025
Revenues and Other Income			$	10,238
Income (loss) before income taxes*			2,595
Net Income (Loss)			2,849

*Includes approximately $2.3 billion of purchased commodities expense for transactions with Non-Obligated Subsidiaries.

Summarized Balance Sheet Data

			Millions of Dollars
			March 31 2025			December 31 2024
Current Assets			$	7,062		6,077
Amounts due from Non-Obligated Subsidiaries, current			679			319
Noncurrent Assets			125,309			120,845
Amounts due from Non-Obligated Subsidiaries, noncurrent			14,774			11,719
Current Liabilities			4,845			4,504
Amounts due to Non-Obligated Subsidiaries, current			1,012			935
Noncurrent Liabilities			68,754			64,088
Amounts due to Non-Obligated Subsidiaries, noncurrent			46,565			41,826

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.

For more discussion of the below topics, please see the Contingencies section in Management's Discussion and Analysis of Financial Condition and Results of Operations of our 2024 Annual Report on Form 10-K.

			ConocoPhillips 2025 Q1 10-Q			48

Capital Resources and Liquidity			Table of Contents

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. We occasionally receive requests for information or notices of potential liability from the U.S. EPA and state environmental agencies alleging that we are a potentially responsible party under the 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 March 31, 2025, there were 16 sites around the U.S. in which we were identified as a potentially responsible party under CERCLA and comparable state laws. For remediation activities in the U.S. and Canada, our consolidated balance sheet included total accrued environmental costs of $210 million at March 31, 2025, compared with $206 million at December 31, 2024. 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.

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 emissions reduction. These 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.

Company Response to Climate-Related Risks

The objective of our Climate Risk Strategy is to manage climate-related risk, optimize opportunities and equip the company to respond to changes in key uncertainties, including government policies around the world, technologies for emissions reduction, alternative energy technologies and changes in consumer trends. The strategy sets out our choices around portfolio composition, emissions reductions, targets and incentives, emissions-related technology development, and our climate-related policy and finance sector engagement.

Our Climate Risk Strategy is intended to enable us to responsibly meet the global demand for energy, deliver competitive returns on and of capital and work to meet our previously established emissions-reduction targets. First, meeting global energy demand requires a focus on delivering production that will best compete in any energy mix scenario. This production will be delivered from resources with a competitive cost of supply and low GHG intensity, as well as portfolio diversity by market and asset type. Next, in delivering competitive returns, ConocoPhillips has been a leader in shifting the exploration and production sector’s value proposition away from one focused on production toward one focused on returns. Finally, to drive accountability for the emissions that are within our control, we are progressing toward our Scope 1 and Scope 2 emissions intensity targets.

49			ConocoPhillips 2025 Q1 10-Q

			Table of Contents

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, costs and plans, objectives of management for future operations, the anticipated benefits of our acquisition of Marathon Oil, the anticipated impact of our acquisition of Marathon Oil on the combined company’s business and future financial and operating results and the expected amount and timing of synergies from our acquisition of Marathon Oil 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 development or replacement of reserves and future dividends. You can often identify our forward-looking statements by the words “ambition,” “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.

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 or inaccurate, and involve risks and uncertainties we cannot predict. 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:

• Effects of volatile commodity prices, including prolonged periods of low commodity prices, which may adversely impact our operating results and our ability to execute on our strategy and could result in recognition of impairment charges on our long-lived assets, leaseholds and nonconsolidated equity investments.

• 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 and the global response to such conflict; security threats on facilities and infrastructure; global health crises; the imposition or lifting of crude oil production quotas or other actions that might be imposed by OPEC and other producing countries; or the resulting company or third-party actions in response to such changes.

• 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 our reserve replacement rates, whether as a result of significant declines in commodity prices or otherwise.

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

• Failure to progress or complete announced and future development plans related to constructing, modifying or operating E&P and LNG facilities, or unexpected changes in costs, inflationary pressures or technical equipment related to such plans.

• Significant operational or investment changes imposed by legislative and regulatory initiatives and international agreements addressing environmental concerns, including initiatives addressing the impact of global climate change, such as limiting or reducing GHG emissions; regulations concerning hydraulic fracturing, methane emissions, flaring or water disposal; and prohibitions on commodity exports.

• Broader societal attention to and efforts to address climate change may cause substantial investment in and increased adoption of competing or alternative energy sources.

• Risks, uncertainties and high costs that may prevent us from successfully executing on our Climate Risk Strategy.

• Lack or inadequacy of, or disruptions in, 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.

			ConocoPhillips 2025 Q1 10-Q			50

			Table of Contents

• Potential disruption or interruption of our operations and any resulting consequences due to accidents; extraordinary weather events; supply chain disruptions; civil unrest; political events; war; terrorism; cybersecurity threats or information technology failures, constraints or disruptions.

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

• Liability resulting from pending or future litigation or our failure to comply with applicable laws and regulations.

• General domestic and international economic, political and diplomatic developments, including deterioration of international trade relationships; the imposition of trade restrictions or tariffs relating to commodities and material or products (such as aluminum and steel) used in the operation of our business; expropriation of assets; changes in governmental policies relating to commodity pricing, including the imposition of price caps; sanctions; or other adverse regulations or taxation policies.

• Competition and consolidation in the oil and gas E&P industry, including competition for sources of supply, services, personnel and equipment.

• Any limitations on our access to capital or increase in our cost of capital or insurance, including as a result of illiquidity, changes or uncertainty in domestic or international financial markets, foreign currency exchange rate fluctuations or investment sentiment.

• Challenges or delays to our execution of, or successful implementation of the acquisition of Marathon Oil or any future asset dispositions or acquisitions we elect to pursue; potential disruption of our operations, including the diversion of management time and attention; our inability to realize anticipated cost savings or capital expenditure reductions; difficulties integrating acquired businesses and technologies; or other unanticipated changes.

• 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 anticipate, if at all.

• The operation, financing and management of risks 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.

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

• The factors generally described in Part I—Item 1A in our 2024 Annual Report on Form 10-K and any additional risks described in our other filings with the SEC.

51			ConocoPhillips 2025 Q1 10-Q

			Table of Contents