Oil & Gas Giant ConocoPhillips Hikes Dividend, Says Not Surprised By Consolidation Wave

ConocoPhillips COP reported third-quarter FY23 adjusted EPS of $2.16, down from $3.60 a year ago, beating the consensus of $1.97.

Revenues of $14.87 billion fell from $ 21.61 billion a year ago and missed the consensus of $15.07 billion. 

Total production was 1,806 thousand barrels of oil equivalent per day (MBOED), an increase of 52 MBOED from the same period a year ago.

Lower 48 production averaged 1,083 MBOED in Q3, which includes 722 MBOED from the Permian, 232 MBOED from the Eagle Ford, and 111 MBOED from the Bakken assets.

The average realized price declined 28% Y/Y to $60.05 per barrel of oil equivalent (BOE).

Q3 Operating cash flow stood at $5.4 billion. COP funded $2.5 billion of capital expenditures and investments, paid $1.3 billion in ordinary dividends and VROC and repurchased $1.3 billion of shares.

Dividend Increase: ConocoPhillips has announced a 14% increase in the quarterly ordinary dividend to $0.58 per share. Payable Dec. 1, 2023, to stockholders of record at the close of business on Nov. 14, 2023.

The company ended the quarter with cash and short-term investments of $9.7 billion.

ConocoPhillips CEO, on the conference call, says the company has a high bar for M&A and is not surprised by the consolidation wave in the industry, referring to Chevron's CVX acquisition of Hess Corp HES.

4Q23 Outlook: ConocoPhillips expects production to be 1.86 to 1.90 MMBOED.

FY23 Outlook: COP reaffirmed production guidance of 1.80 to 1.81 MMBOED. Sees adjusted operating cost of $8.6 billion versus the prior guidance of $8.3 billion, reflecting the increased working interest at Surmont, increased Lower 48 non-operated activity and inflationary impacts primarily in the Lower 48.

Price Action: COP shares are trading higher by 5.27% at $122.82 on the last check Thursday.