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How ConocoPhillips’s Low-Cost Reserves Evolved in 2016

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ConocoPhillips’s low-cost reserves

On November, 2016, ConocoPhillips’s (COP) low-cost reserves totaled ~18 Bboe (billion barrels of oil equivalent), an increase of ~5 Bboe from December 31, 2015. ConocoPhillips defines low-cost reserves as those reserves that have a cost of supply (or COS) below $50 per barrel of Brent-equivalent. These reserves do not represent total proved reserves.

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ConocoPhillips’s low-cost reserves types

On November 5, 2016, ConocoPhillips (COP) had ~5 Bboe (or ~28%) of low-cost LNG and oil sands reserves, ~6 Bboe (or ~33%) of low-cost conventional reserves, and ~7 Bboe (or ~39%) of low-cost unconventional reserves.

ConocoPhillips’s low-cost LNG and oil sands reserves have an aggregate cost of supply of ~$40 per barrel of Brent-equivalent. ConocoPhillips’s low-cost LNG and oil sands assets consist of QG3 in Qatar, Darwin LNG in Australia, APLNG on Curtis Island, and the oil sands in Canada (Surmont and FCCL). Alaska LNG is not included in these numbers because its cost of supply is still too uncertain.

ConocoPhillips’s low-cost conventional reserves have an aggregate cost of supply below $35 per barrel of Brent-equivalent. ConocoPhillips’s conventional assets are located in the UK, Norway, Alaska, China, Indonesia, Malaysia, the continental US, and Canada.

ConocoPhillips’s low-cost unconventional reserves have an aggregate cost of supply below $35 per barrel of Brent-equivalent. ConocoPhillips’s unconventional assets are located in the United States in the Eagle Ford Shale, the Permian Basin, the Bakken Shale, and the Niobrara Shale, as well as in Canada in Montney and Falher-Wilrich.

Other oil and gas producers

On December 31, 2015, other upstream companies Denbury Resources (DNR), Pioneer Natural Resources (PXD), and Devon Energy (DVN) had proved reserves of ~289 MMboe,[1. million barrels of oil equivalent] ~664 MMboe, and ~2,180 MMboe, respectively.

The Energy Select Sector SPDR ETF (XLE) typically invests at least 95% of its total assets in oil and gas–related equities from the S&P 500.

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