Analyzing ConocoPhillips’s Lifting Costs

Lifting costs, also referred to as production costs, are expenses incurred to operate wells during production. Lifting costs also include any maintenance expenses during a well’s production lifespan after drilling is complete. Lifting cost is derived by adding LOE (lease operating expenses), workover costs, and production taxes.

In 3Q16, ConocoPhillips (COP) reported lifting costs of ~$11.78 per boe (barrel of oil equivalent), which is ~17.0% lower than 3Q15. Sequentially, ConocoPhillips’s lifting costs in 3Q16 rose ~1.0% compared to 2Q16.

S&P 500 (SPY) upstream companies such as California Resources (CRC) and Murphy Oil (MUR) have lifting costs of $16.78 and $8.26 per boe, respectively. Stone Energy (SGY), a smaller player, has a lifting cost of $7.91 per boe.