uploads///COP Q Production Mix

Analyzing ConocoPhillips’s Production Mix

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Sep. 23 2016, Updated 10:04 a.m. ET

ConocoPhillips’s production mix

As you can see in the graph below, ConocoPhillips’s (COP) production mix for 2Q16 was ~38% crude oil, ~10% bitumen, ~10% natural gas liquids, and ~42% natural gas. These figures mean that ConocoPhillips (COP) is tilted more toward liquids production. Its total liquids production is ~58%. Typically, upstream companies with more liquids production have better operating margins.

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ConocoPhillips’s production mix trend

COP’s quarterly crude oil percentage in production mix has risen from ~44% in 4Q11 to ~49% in 2Q16, with an average rate of increase of ~0.6% quarter-over-quarter. In 2Q16, the crude oil percentage in its production mix fell by 1 percentage point to ~49%, from ~50% in 1Q16.

ConocoPhillips’s segment-wise 2Q16 production mix details

For 2Q16, ConocoPhillips’s Lower 48 operations reported a production mix of ~41% crude oil, ~18% natural gas liquids, and ~41% natural gas. These figures mean that ConocoPhillips’s 2Q16 production from Lower 48 operations contains ~59% liquids and is tilted toward liquids production.

COP’s Canada operations reported ~59% bitumen in their production mix with total liquids production of ~68% and natural gas production of ~32%. All of ConocoPhillips’s bitumen production comes from its Canada operations.

For 2Q16, ConocoPhillips’s Europe and North Africa operations reported a production mix of ~56% crude oil, ~3% natural gas liquids, and ~41% natural gas.

ConocoPhillips’s Asia Pacific and Middle East operations are tilted toward natural gas production with a natural gas mix of ~68% in its production mix.

Other upstream companies

Other upstream companies with a higher liquids percentage in their production mixes are Diamondback Energy (FANG), Occidental Petroleum (OXY), Devon Energy (DVN), and Murphy Oil (MUR). These companies had ~87%, ~73%, ~60%, and ~64% liquids, respectively, in their 2Q16 production mixes.

The volatility in oil prices also impacts ETFs and ETNs such as the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), the Vanguard Energy ETF (VDE), and the VelocityShares 3x Long Crude Oil ETN (UWTI).

Next, let’s take a look at ConocoPhillips’s oil and gas revenue mix for 2Q16.

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