Why ConocoPhillips Is Outperforming Peers This Year


Sep. 18 2018, Updated 10:30 a.m. ET

Recent market performance

So far in this series, we’ve compared ConocoPhillips’s (COP), EOG Resources’ (EOG), Occidental Petroleum’s (OXY), and Anadarko Petroleum’s (APC) proven reserves, recent operating performance, and capital expenditure guidance. In this article, we’ll look at their recent market performance.

US independent upstream companies have been volatile recently. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which comprises 56 independent upstream companies, has fallen 2.9% this month.

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The recent volatility could be due to crude oil and natural gas prices, which have been volatile. US crude oil, which started the month weakly, rose after the EIA (U.S. Energy Information Administration) reported a high inventory draw and looming Iran sanctions. These gains were short-lived, reversed by the recent sell-off due to global economic concerns amid trade tension. For more on crude oil prices’ recent outlook, read Will Brent-WTI Divergence Help US Crude Oil Rise?

Market performance this year

ConocoPhillips has outperformed XOP and all of its peers this year, gaining 32.2%. Meanwhile, XOP has gained 10.7%, and EOG Resources and Occidental Petroleum have gained just 8.1% and 4.1%, respectively. Anadarko Petroleum has gained 16.4%.

COP’s strong performance could be due to its financial position improving significantly due to asset sales, its high capex target, and buybacks driven by its strong free cash flow. In the next article, we’ll compare the four peers’ valuation.


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