Lloyd Byrne

Lloyd Byrne asked for an update on ConocoPhillips' stance regarding re-entry into Venezuela and whether recent events would impact the ongoing Citgo sale process.

Answer

Ryan Lance, Chairman and CEO of ConocoPhillips, reiterated that the company's primary focus in Venezuela is on recovering owed funds from existing judgments. He mentioned assisting the current administration with insights but stressed the need for improved security, constructive government relations, and policy durability for any potential re-entry. Regarding Citgo, he saw no change to the sale process, noting the administration's preference for U.S. ownership and ConocoPhillips' expectation to collect part of its judgment through this process.

Lloyd Byrne asked for an update on ConocoPhillips' conditions for re-entering Venezuela and whether recent events impact the ongoing Citgo sale process.

Answer

Ryan Lance, Chairman and CEO, stated that ConocoPhillips' priority remains focused on recovering the significant amount owed from Venezuela through existing judgments. Conditions for re-entry include improved security, constructive government relations, and policy durability. Regarding Citgo, the company sees no change to the sale process, is encouraged by the administration's stance on U.S. ownership, and expects to collect part of its judgment through this process.

Lloyd Byrne asked for more details on the $400 million improvement in operating expenses (OpEx) for 2026, noting it's the second reduction this year, and sought to understand the big factors driving these improvements and the potential for further reductions.

Answer

Andy O’Brien, Chief Financial Officer and Executive Vice President of Strategy and Commercial, attributed the OpEx reduction to strong execution and capturing savings, noting 75% of Marathon synergies are now achieved and will be fully integrated by year-end. He emphasized that the 2026 reduction includes the full-year benefit of these synergies and other cost improvements announced last quarter. Ryan Lance, Chairman and CEO, reinforced that these are real, non-capital-related reductions that will directly impact the bottom line and free cash flow.

Lloyd Byrne asked for more detail on the $400 million OpEx improvement, noting it's the second cut this year, inquiring about the changing factors and potential for further improvements.

Answer

Andy O’Brien (CFO and EVP of Strategy and Commercial) attributed the OpEx reduction to strong execution and capturing savings, noting that 75% of Marathon synergies have been achieved and will be fully integrated by year-end. He stated that 2026 will see the full-year benefit of these synergies and other cost improvements announced last quarter. Ryan Lance (Chairman and CEO) emphasized that these are real, non-capital-related reductions that will directly impact the bottom line and free cash flow.

Lloyd Byrne of Jefferies LLC asked about the company's LNG strategy, specifically regarding expectations for future regasification sales deals and their contribution to performance.

Answer

CFO and EVP Andy O’Brien responded by highlighting recent commercial successes, including a 1.5 MTPA regasification capacity deal in France and a sales agreement with an Asian buyer. He proudly stated that these deals mean the entire 5 MTPA of offtake from the Port Arthur LNG project has now been placed. O'Brien indicated that commercial discussions are ongoing and to 'watch this space' for future announcements.

Lloyd Byrne asked if ConocoPhillips would leverage its balance sheet or asset sales to increase shareholder returns beyond the guided 45% of CFO, given its strong free cash flow outlook.

Answer

Chairman and CEO Ryan Lance responded that the 45% of CFO target feels appropriate for the current part of the cycle. He acknowledged this may require using some cash on the balance sheet at current commodity prices but reiterated that the company does not plan to borrow gross debt for this purpose. He affirmed that share repurchases remain an important part of their capital return strategy.

Lloyd Byrne sought an update on the Western Gateway pipeline project, including the second open season, the extension to the Los Angeles market, and any permitting hurdles or next steps. He also asked about the sustainability of Phillips 66's strong clean product yields and the role of Central Corridor assets.

Answer

Don Baldridge, EVP of Midstream and Chemicals, reported a positive response to the first open season with multiple shipper commitments. He explained the second open season extends delivery points to the L.A. market and connects to Gulf Coast supply via the Explorer Pipeline, emphasizing the project's liquidity and strong support from regulatory and elected officials. Rich Harbison, EVP of Refining, attributed record clean product yields to a structural change driven by detailed evaluation of conversion units and smart, small capital investments, indicating continued progress and sustainability.

Lloyd Byrne requested an update on the Western Gateway pipeline project, including the open season, extension to Los Angeles, and any permitting hurdles. He also inquired about the sustainability of Phillips 66's strong clean product yields and the role of catalyst optimization and the Central Corridor.

Answer

Don Baldridge, EVP of Midstream and Chemicals, reported a positive response to the first open season for Western Gateway, with the second open season focused on extending delivery points to the California market (L.A.) and connecting to Gulf Coast supply via the Explorer Pipeline. He noted strong support from regulatory and elected officials. Rich Harbison, EVP of Refining, affirmed that strong clean product yields are a structural and sustainable change, driven by detailed evaluation of conversion units and smart-small capital investments, with continued progress expected.

Lloyd Byrne of Jefferies LLC asked about the sustainability of the current dividend level, suggesting a potential reduction to fund more buybacks or debt repayment. He also asked for details on the timing and opportunities for cost reductions, particularly in the DJ Basin.

Answer

CFO & Treasurer Marianella Foschi affirmed the company's commitment to the base dividend, stating no changes are being considered. President & COO Clay Carrell detailed significant progress on the $100 million cost-saving initiative, with 80% of the run-rate savings captured. He noted that in the DJ Basin, well costs are now highly competitive at around $650 per foot, driven by drilling the basin's longest laterals and other efficiencies.

Lloyd Byrne from Jefferies LLC asked about ExxonMobil's strategy for North American gas, whether power generation could fit into its model, and for an update on the Golden Pass LNG project.

Answer

Chairman and CEO Darren Woods confirmed that Golden Pass is progressing well and is expected to deliver first gas around year-end 2025 or early 2026. He stated that ExxonMobil is not interested in the power generation business as a standalone venture, as it is not a core competency. The company's interest in power is only as an enabler for low-carbon solutions, where the primary value is derived from decarbonization services like CCS.

Lloyd Byrne inquired about the operational next steps and potential hurdles in ramping up production to 300,000 barrels per day in the Gulf of Mexico, following the Ballymore project coming online.

Answer

CEO Mike Wirth expressed satisfaction with the Ballymore startup, noting its prolific wells. He detailed the ramp-up plan, with two of three Ballymore wells online and two of four Anchor wells online, with the remainder scheduled for this year and next. He stated that besides weather, execution is in a 'very good posture' with all resources assigned.