Stephen Richardson

Stephen Richardson questioned how ConocoPhillips evaluates new international opportunities, such as the extended Libya concession and Equatorial Guinea, against its existing portfolio, focusing on risk-adjusted cost of supply.

Answer

Ryan Lance, Chairman and CEO, clarified that the Libya concession extension is an organic opportunity to improve an existing asset's competitiveness. He noted that new opportunities, like Equatorial Guinea (acquired via Marathon), are evaluated based on their risk-adjusted cost of supply and ability to compete for capital within the company's financial framework, aiming to be additive to long-term plans.

Stephen Richardson inquired about ConocoPhillips' broader strategy for evaluating international opportunities, including the recent Libya concession extension, and how these options are weighed against the existing portfolio based on risk-adjusted cost of supply and other factors.

Answer

Ryan Lance, Chairman and CEO of ConocoPhillips, clarified that the Libya concession extension is an organic opportunity to enhance an existing asset's competitiveness. More broadly, he explained that new international opportunities, such as Equatorial Guinea from the Marathon acquisition, are evaluated based on risk-adjusted cost of supply and their ability to compete for capital within the company's long-term financial framework, leveraging their diverse portfolio and business development capabilities.

Stephen Richardson asked about incremental opportunities in Alaska, specifically regarding regulatory and permit changes for legacy operations or extending Willow's resource, and also about improving the Surmont asset with minimal capital now that ConocoPhillips has full ownership.

Answer

Ryan Lance (Chairman and CEO) discussed working with the administration to streamline permitting in Alaska, citing new rules for NPRA development as a start, aiming for faster and more durable approvals. He also mentioned debottlenecking the Surmont plant to increase gross productive capacity and exploring future steam generation to accelerate development of its large, low-cost resource. Lance emphasized the company's deep inventory in the Lower 48 and other conventional opportunities globally, positioning them for decades of growth.

Stephen Richardson inquired about incremental capital-efficient opportunities within the portfolio, specifically in Alaska regarding regulatory and permit changes for legacy operations or extending Willow's resource, and at Surmont concerning incremental steam potential and other asset improvements with minimal capital.

Answer

Ryan Lance, Chairman and CEO, highlighted ongoing efforts with the administration to streamline permitting in Alaska, citing new NPRA rules as a start, aiming for faster and more durable approvals. He also mentioned debottlenecking the Surmont plant now that ConocoPhillips owns 100%, increasing gross productive capacity and exploring future steam generation to accelerate development of the sub-$40 cost of supply resource.

Stephen Richardson of Evercore ISI inquired about the significantly increased $5 billion asset divestiture target, asking for perspective on the acquisitions market and the types of assets being considered for sale.

Answer

Chairman and CEO Ryan Lance stated that the increased target resulted from a rigorous annual planning process that identifies assets not competing for internal capital. He cited the successful Anadarko Basin sale as an example that provided confidence in the market's appetite for such assets. Lance affirmed they see a reasonable market to sell into, allowing them to high-grade the portfolio and accelerate value.

Stephen Richardson asked for ConocoPhillips's current views on its cost structure, opportunities for further improvements, and how it approaches costs as the industry matures.

Answer

Chairman and CEO Ryan Lance described continuous cost evaluation as part of the company's DNA, involving constant benchmarking. He highlighted that the Marathon Oil integration created a new opportunity to review processes and drive efficiencies across the entire organization, which is crucial for maintaining a competitive edge in a volatile macroeconomic environment.

Stephen Richardson from Evercore ISI inquired about the outlook for long-cycle capital expenditures, seeking details on projects in Alaska and Qatar, the strategy for Port Arthur Phase 2, and confirmation that 2025 represents peak spending.

Answer

Andy O'Brien, SVP of Strategy, confirmed that 2025 is the peak spending year for long-cycle projects at approximately $3 billion, driven by the largest winter construction season for the Willow project. He stated that major project spending will step down annually thereafter, with a steady stream of project start-ups from 2026 to 2029. Regarding Port Arthur Phase 2, O'Brien noted that while ConocoPhillips is keen to see it completed, their primary focus is on building out offtake capacity rather than taking more equity. CEO Ryan Lance added these projects are expected to add over $6 billion in incremental free cash flow relative to 2025.

Stephen Richardson requested more detail on the 2025 capital allocation plan, particularly how the company is balancing long-cycle projects like Willow against the current commodity price environment.

Answer

Chairman and CEO Ryan Lance reiterated the pro forma 2025 CapEx guidance of less than $13 billion. Andy O'Brien, SVP of Strategy, elaborated that this figure, down from a combined $13.5 billion in 2024, is primarily driven by Marathon synergies. He confirmed that 2025 will be the peak construction year for Willow while Port Arthur LNG spending will decrease, with all factors incorporated into the sub-$13 billion guidance.

Stephen Richardson inquired about Phillips 66's Central Corridor outlook, specifically regarding Mid-Continent products and feedstock opportunities following the WRB joint venture consolidation, and then followed up on the company's 2026 priorities for controllable refining costs, especially given improved utilization and clean product yields.

Answer

Brian Mandell, EVP of Marketing and Commercial, highlighted PADD 2's maximum integration, Phillips 66's position as a major Canadian crude importer, and the tailwind from widening heavy crude differentials. Rich Harbison, EVP of Refining, detailed the Q4 controllable cost performance of $5.96/barrel, noting that excluding Los Angeles refinery idling costs, it was closer to $5.50-$5.57/barrel. He outlined 2026 priorities including a $0.30/barrel positive impact from the LA idling and a targeted $0.15/barrel reduction from continuous improvement initiatives.

Stephen Richardson asked about Phillips 66's Central Corridor outlook, focusing on Mid-Continent product demand, feedstock opportunities, and the impact of the WRB joint venture consolidation on Canadian heavy crude differentials.

Answer

Brian Mandell, EVP of Marketing and Commercial, highlighted PADD 2's maximum integration, Phillips 66's position as a large Canadian crude importer, and the $4/barrel widening of heavy differentials since the WRB acquisition, translating to $140 million in yearly earnings per dollar. He also noted robust demand growth for diesel and jet in PADD 2. Rich Harbison, EVP of Refining, discussed Q4 2025 controllable refining costs at $5.96/barrel, improving to $5.50-$5.57/barrel excluding Los Angeles refinery idling costs. He outlined 2026 priorities, including a $0.30/barrel positive impact from the LA refinery idling and a target of an additional $0.15/barrel reduction through over 300 continuous improvement initiatives, emphasizing structural changes and reliability.

Stephen Richardson followed up on changing international fiscal terms and opportunities, asking how Chevron plans to maintain its leverage to the upside while developing future opportunities and instilling discipline in the organization.

Answer

Chairman and CEO Mike Wirth explained that Chevron has high-graded its portfolio by adding strong assets and divesting others, which has lowered its break-even and operating costs. He emphasized growing cash flow, driving down break-evens, and applying base business excellence across assets like the consolidated shale businesses. The strategy focuses on resilience, a strong balance sheet, consistent dividend growth, share buybacks, and reinvestment to strengthen the business over time.

Stephen Richardson followed up on changing international fiscal terms and opportunities, asking how Chevron plans to maintain leverage to the upside while developing future opportunities and instilling discipline within the organization.

Answer

Chairman and CEO Mike Wirth explained that Chevron has high-graded its portfolio by adding strong assets and divesting others, strengthening the company's break-even and cost structure. He emphasized growing cash flow, driving down break-evens, and applying base business excellence, citing the consolidation of shale businesses as an example of driving efficiency and value across the portfolio to enhance resilience and consistent shareholder returns.

Stephen Richardson asked for Chevron's perspective on the California refining market, considering recent shutdowns, proposed pipeline projects for product imports, and the policy backdrop, and how these factors impact Chevron's business in the state.

Answer

Chairman and CEO Mike Wirth stated that the tightening supply in the California refining market is a direct result of policy, leading to refinery conversions or closures. He noted discussions about policy reconsideration but no significant changes. He highlighted the increasing reliance on marine imports and the ambitious, complex nature of proposed pipeline projects, which will have broader market implications. He affirmed Chevron's strong refining and marketing presence can currently compete and deliver acceptable returns, but policy shifts will continue to challenge this.

Stephen Richardson sought Mike Wirth's perspective on the California refining market, considering recent shutdowns, proposed pipeline projects for product imports, the policy backdrop, and its implications for Chevron's business in the state.

Answer

Chairman and CEO Mike Wirth stated that the tightening supply in California is a direct function of policy, with refineries converting or closing. He noted that while policy is being reconsidered, no significant changes have occurred. Wirth explained that California will become short on supply, necessitating more regular marine imports and ambitious pipeline projects, which are complicated to permit and build. He acknowledged that Chevron has a strong refining and marketing presence that can compete, but policy moves will continue to impact decisions.

Stephen Richardson from Evercore ISI asked about the strategic role of the combined tight oil portfolio (Permian, DJ, Bakken) post-Hess integration, specifically how Chevron will balance growth versus free cash generation from these assets.

Answer

Chairman & CEO Michael Wirth highlighted that the 1.6 million barrels per day from shale and tight represents 40% of the company's production. He stated the strategy is to apply capital efficiencies to hold production at a plateau for years, generating significant free cash flow for the broader portfolio, dividends, and buybacks, emphasizing a shift from growth to cash generation.

Stephen Richardson asked for Chevron's current perspective on its CPChem joint venture, particularly its performance through the chemical cycle trough and the possibility of acquiring a larger stake.

Answer

CEO Mike Wirth expressed a positive long-term view on the chemicals business, despite the current trough. He praised CPChem's advantaged feedstock position and operational excellence. He confirmed that Chevron has advised its partner of its interest in acquiring the other half of the business 'at a reasonable value for both parties.'

Stephen Richardson asked about the strategic role of the Permian Basin as it nears 1 million barrels per day and how Chevron determines the appropriate mix of unconventional assets within its broader portfolio.

Answer

CEO Mike Wirth stated the plan is for the Permian to moderate its growth rate and become a core, durable free cash flow generator for many years. He noted that unconventionals (Permian, DJ, Bakken) could approach 50% of the portfolio, providing a large, stable production base that can be maintained with modest capital.

Stephen Richardson asked about the role of divestitures, contract expiries, and legacy assets in accelerating margin uplift, as well as ExxonMobil's approach to inorganic opportunities in the current robust asset market.

Answer

CEO Darren Woods stated that divestitures have been a concentrated focus over the last five years, aiming to sell assets that no longer compete within ExxonMobil's portfolio to buyers who value them more highly. He reported over $25 billion in divestments since 2019 across upstream and product solutions, emphasizing a continuous focus on maintaining a competitive, low-cost portfolio. Woods also noted that ExxonMobil actively seeks accretive inorganic opportunities that leverage its unique capabilities and are competitive with other investment options.

Stephen Richardson asked about the role of divestitures, contract expiries, and legacy assets in accelerating margin uplift, and ExxonMobil's approach to inorganic opportunities within the current robust asset market.

Answer

CEO Darren Woods stated that ExxonMobil rigorously divests assets that no longer compete in its portfolio, having completed $25 billion in divestments since 2019. This ensures the remaining portfolio is advantaged and low-cost. He also noted a continuous focus on accretive inorganic opportunities that leverage ExxonMobil's unique capabilities and are competitive with other investment options.

Stephen Richardson from Evercore ISI asked for insights on recent downstream project startups, including lessons learned and future growth ambitions in the refining sector.

Answer

Chairman and CEO Darren Woods described the recent project startups, like the China Chemical Complex and Singapore resid upgrade, as an 'extremely good success' due to the centralized projects organization. He highlighted the strategy of using new technology to convert low-value molecules into high-value products. Future investments will continue this trend, focusing on upgrading the product slate at integrated sites, including opportunities in biofuels and plastics recycling.

Stephen Richardson from Evercore ISI requested an update on the Baytown blue hydrogen project, asking if a Final Investment Decision (FID) is likely based on the current policy environment.

Answer

Chairman and CEO Darren Woods explained that an FID for the Baytown project depends on three factors: a competitive project, supportive policy, and customer offtake agreements. While the project economics are strong and the policy framework is largely in place, he identified securing firm sales commitments as the 'long pole in the tent'. A decision will be made once they are confident in the returns, hopefully later in the year.

Asked about the forward outlook on capital expenditures, suggesting that CapEx seems to be the biggest risk to achieving the company's return on capital employed (ROCE) target. He inquired about upside/downside risks and the nature of the spending.

Answer

The executive explained that the base CapEx profile is relatively flat and efficient, focused on replicating proven successes. The growth in spending is directed towards new ventures like low-carbon solutions and new products, and these investments are contingent on achieving high returns. The CFO added that their project execution capability is a key competitive advantage that provides confidence in hitting targets.

Stephen Richardson asked about the primary risks to achieving the 2030 Return on Capital Employed (ROCE) target, focusing specifically on potential upside and downside risks to the capital expenditure plan.

Answer

CEO Darren Woods explained that a large portion of CapEx is for proven, repeatable projects with a stable spending profile. He noted that growth in CapEx is for new businesses, and this spending is contingent on achieving high returns. CFO Kathy Mikells added that their global projects organization provides a competitive advantage in execution and capital efficiency, giving them confidence in their targets.

Stephen Richardson asked about the forward outlook on capital expenditures, framing it as a key risk to achieving ROCE targets and inquiring about upside/downside risks.

Answer

CEO Darren Woods explained that a large portion of CapEx is for proven, repeatable projects with a stable spending profile, while growth in spending is for new businesses and is contingent on achieving high returns. CFO Kathy Mikells added that ExxonMobil's global projects organization provides a competitive advantage in execution and efficiency, giving them high confidence in their ability to improve capital returns.

Stephen Richardson from Evercore ISI inquired about SLB's capital expenditure (CapEx) outlook for 2026, seeking context on the trend line of CapEx and how the capital intensity of the forward business differs from the past. He also asked about the Middle East market, specifically the customer mix between IOCs and national companies driving optimism for improvement.

Answer

CEO Olivier Le Peuch explained that the slightly increased CapEx of $2.5 billion for 2026 is needed for operations and new opportunities as activity recovers, noting improved capital efficiency. He detailed that Reservoir Performance has the highest capital intensity, followed by Well Construction and Production Systems (especially with ChampionX's lower intensity). Regarding the Middle East, Mr. Le Peuch reinforced confidence in national companies, highlighting the V-shaped recovery expected in Saudi Arabia's drilling and workover activity. He also discussed growth momentum in Kuwait and UAE, and the increasing investment from international companies in Libya, Algeria, Egypt, and Iraq, as well as unconventional plays in UAE.

Stephen Richardson inquired about SLB's CapEx strategy for 2026, seeking context on the trend line and how the capital intensity of the forward business differs from historical patterns. He also asked about the Middle East customer mix, specifically the increasing opportunities for IOCs across North Africa and the Middle East, and how this influences SLB's optimism for improvement compared to traditional national oil company (NOC) customers.

Answer

CEO Olivier Le Peuch explained that the slightly increased CapEx of $2.5 billion for 2026 is necessary to capture new opportunities as activity recovers, particularly in international markets, noting improved capital efficiency. He reinforced confidence in NOC capital programs, highlighting the V-shaped recovery expected in Saudi Arabia's drilling and workover activity. Le Peuch also detailed growth drivers from IOCs in Libya, Algeria, Egypt, and Iraq, and unconventional plays in UAE, emphasizing SLB's strong exposure across these markets.

Stephen Richardson from Evercore ISI asked about EOG's natural gas marketing strategy, particularly regarding long-term contracts given rising demand and new Utica volumes. He also questioned the midstream strategy for improving pricing on Utica oil and liquids.

Answer

CEO Ezra Yacob stated EOG is well-positioned to serve long-term gas demand and seeks premium-priced, creative agreements with good partners. COO Jeff Leitzell added that the marketing team will leverage EOG's scale and track record to improve Utica's oil price differentials and GP&T rates over time, noting the asset's economics are already highly competitive.

Stephen Richardson inquired about EOG's new plan to optimize its balance sheet, asking about the timing of adding incremental debt, the redeployment of cash into buybacks, and whether this implies shareholder returns will sustainably exceed the minimum commitment. He also asked about the natural gas outlook and what signals EOG needs to increase capital investment in its low-cost Dorado asset.

Answer

Chairman and CEO Ezra Yacob explained that the decision to increase debt to a $5-6 billion target range is timed with maturing bonds and a more favorable market, making the capital structure more efficient. He confirmed this will likely push cash returns above the 70% free cash flow commitment, potentially exceeding 100% in the near term. Regarding Dorado, Yacob noted that while the long-term demand outlook is strong, near-term gas inventories remain high, so EOG will maintain a disciplined 1-rig program to capture efficiencies while awaiting a market inflection point in 2025.

Stephen Richardson asked about the impact of recent restructuring announcements by European industrial companies, inquiring about conversations with customers and how Linde views the risk of potential shutdowns.

Answer

CEO Sanjiv Lamba stated that Linde has not had discussions with any major customers in Europe regarding major plant closures at this time, though the company is monitoring the situation closely. He provided reassurance by emphasizing that Linde's investments are protected by solid contracts with termination provisions, safeguarding investor interests even if a customer decides to shut down.

Inquired about the potential synergy of using lower-grade carbonate from Olaroz to feed hydroxide plants, thereby freeing up high-quality Fenix carbonate for sale. Also asked if the company's growth program is self-funded at a $20,000 per tonne realized price.

Answer

Using Olaroz carbonate for hydroxide feed to sell more high-value Fenix battery-grade carbonate is a core part of the strategy and a key synergy, expected to be implemented next year after customer requalifications. The company confirmed its growth program is self-funded at a $20,000 per tonne price, and even at a slightly lower price.