In 2016, ConocoPhillips (COP) stock saw a significant reversal. It was in a downtrend from July 2014 to February 2016 due to falling crude oil prices. During those 19 months, COP stock lost ~62.0% of its market capitalization.
But since February 2016, due to higher trending crude oil prices, ConocoPhillips stock has been rising. Since crude oil prices hit bottom in February 2016, they’ve risen ~106.0%. This strong rise in crude oil prices added fuel to ConocoPhillips’s rally and saw its stock rise ~67.0%.
In the graph below, you can see the price dynamics between crude oil prices and the rise in COP stock.
After a disastrous 2015, ConocoPhillips stock rallied ~10.0% in 2016. Other oil and gas producers such as Occidental Petroleum (OXY), Range Resources (RRC), and Energen (EGN) have risen ~10.0%, ~40.0%, and ~41.0%, respectively, during the same period.
The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) rose ~38.0% in 2016.
In this series
Is this bounce in ConocoPhillips sustainable from a fundamentals point of view? What are COP’s operational strategies in light of the recent rise in crude oil prices? How have rising crude oil prices affected ConocoPhillips’s production, realized prices, and margins in the most recent quarter? Did COP benefit from its hedges in 3Q16?
We’ll try to answer all these questions in the rest of this series. We’ll look at COP’s operational strategies, production, production mix, costs, and margins.
Let’s start with the ConocoPhillips’s operational strategies.