Comparing ConocoPhillips’s Capital Requirements to Its Peers



ConocoPhillips’s relative capital requirement

The chart below shows the capital required to keep ConocoPhillips’s (COP) 2017 production levels flat for various US oil and gas producers. At $50.00 per barrel of WTI (West Texas Intermediate) crude oil (USO) prices, ConocoPhillips’s fiscal 2018 capital requirement is the lowest among its peer group at ~$3.0 per boe (barrel of oil equivalent) of production.

COP’s peer group is depicted in the chart below.

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Let’s look at ConocoPhillips’s (COP) fiscal 2018 capital requirement to keep its 2017 production flat. When this figure is compared with other large US E&P (exploration and production) companies from the SPDR S&P 500 ETF (SPY), COP’s relative capital requirement is the lowest among the group depicted in the chart above.

This group includes Apache (APA), Anadarko Petroleum (APC), Devon Energy (DVN), EOG Resources (EOG), Pioneer Natural Resources (PXD), and Occidental Petroleum (OXY). Low capital requirements allow more headroom for free cash flow generation, and it helps generate high-grade investment returns.


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