In what may be the most important message Conoco delivered, the company said it has increased its total resource base in its Eagle Ford acreage from 1.8 billion barrels to 2.5 billion barrels. The number represents original oil in place, not recoverable barrels or proved reserves. Conoco also said that it expects to increase production in the Eagle Ford play to 250,000 barrels of oil equivalent a day by 2017.
Conoco plans to increase its annual capital spending over the “next several years” to $16 billion, with a boost of 60% in the amount it commits to development so that the company can achieve its reserve replacement goal of more than 100% a year. Some 95% of Conoco’s spending will be directed at areas that deliver a minimum margin of $30 per barrel of oil equivalent. That includes everything the company produces except North American natural gas.
Of the annual $16 billion in capex, some $5.5 billion will be spent on North American unconventional (shale) plays, including the Eagle Ford, Bakken, Permian Basin and Niobrara plays. Finding and development costs in the Eagle Ford and Bakken plays is $20 to $25 per barrel of oil equivalent. That is not the full production cost, however, which could conceivably add another $30 to $50 a barrel to total costs.
A believer in Conoco is Warren Buffet, who still owns more than 11 million shares of the company’s stock, although that is less than half the stake he had in the middle of last year.
Conoco may not have picked the best day to hold its meeting. The oil and gas sector traded down about 1% in the early afternoon, and the exploration and production group was down about 1.4%. Conoco traded down 1.9% at $70.17, in a 52-week range of $56.38 to $74.59. At that price the company’s dividend yield is about 3.9%.
Cash Back Credit Cards Have Never Been This Good
Credit card companies are at war, handing out free rewards and benefits to win the best customers. A good cash back card can be worth thousands of dollars a year in free money, not to mention other perks like travel, insurance, and access to fancy lounges. See our top picks for the best credit cards today. You won’t want to miss some of these offers.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
