School of Business Investment Program September 18, 2018 Mark Wold Portfolio Analytics Caleb Garrity Private Equity Analyst ConocoPhillips Footnotes
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School of BusinessInvestment Program
September 18, 2018
Mark Wold Portfolio AnalyticsCaleb Garrity Private Equity Analyst
ConocoPhillips
Footnotes
School of BusinessInvestment Program
Table of ContentsConocoPhillips
Footnotes
Investment Thesis
Company Overview and History
Leadership Sector Overview
Competitive Landscape
Strategy
Recommendation
Valuation/Models
Financial Highlights
SWOT Analysis
School of BusinessInvestment Program
Investment ThesisConocoPhillips
Footnotes
Strong balance sheet
Price cycle management
Low Cost of Supply Portfolio <$35/bbl
Shareholder friendly value proposition
School of BusinessInvestment Program
Company OverviewConocoPhillips
Footnotes
Explore
- Geophysics- Reservoir
Engineering- Seismic Imaging
Technology
Produce
Oil & Gas- Hydraulic Fracturing- Horizontal Drilling
Oil Sands- Surface mining- Steam-assisted
gravity drainage
Transport
- Tankers- Pipelines- Trucks- Rail
School of BusinessInvestment Program
Company HistoryConocoPhillips
Footnotes
School of BusinessInvestment Program
LeadershipConocoPhillips
Footnotes
Ryan Lance - Chairman and CEO of
ConocoPhillips- Petroleum engineer with 33
years of oil and natural gas industry experience.
Don Wallette, Jr,- CFO and EVP of Finance
and Commercial functions- More than 30 years in
technical, commercial, and international leadership.
- Joined Phillips in 1981 as staff drilling engineer in Houston.
Matt Fox- EVP of Strategy,
Exploration and Technology- Over 30 years of oil and
natural gas industry experience.
- Began career with Conoco in 1983 as a reservoir engineer in London U.K.
School of BusinessInvestment Program
StrategyConocoPhillips
Source: ConocoPhillips
School of BusinessInvestment Program
StrategyConocoPhillips
Source: ConocoPhillips
School of BusinessInvestment Program
- Integrated Oil and gas company.
- Large number of patented technologies that will position Exxon to be a leader in the Oil and Gas industry far into the future.
- Large global presence gives them a diversified portfolio.
Competitive LandscapeConocoPhillips
Footnotes
- Large integrated oil and gas company.
- Large stake in the Gorgon LNG project in Australia.
- Permian’s largest net acreage holders with 2.2 million net acres.
- A leading independent oil and natural gas exploration and production company.
- Only operate in North America.
- Total company net acreage of 4.2B.
School of BusinessInvestment Program
Competitive LandscapeConocoPhillips
Footnotes
Growing Oil Prices(increases COP revenue by over $100MM per $1)
Oil & Gas Exploration(most growth from tax incentives)
School of BusinessInvestment Program
Competitive LandscapeConocoPhillips
Footnotes
Stable Oil Prices above $60/BBL
School of BusinessInvestment Program
ConocoPhillips
Footnotes
SWOT Analysis
Strengths- Strong balance sheet- Low cost-of-supply portfolio- Low sustaining price <$40 bbl- Strong free cash flow generation
Threats- Environmental regulations- Ongoing trade war- Weakening emerging markets
Opportunities- New low cost-of-supply assets- Investments in new technology ventures- Commodity pricing- Asian LNG demand
Weaknesses- Dependent on commodity prices- Heavily reliant on steel- Bottlenecked in the Permian Basin
School of BusinessInvestment Program
Financial Highlights
Footnotes
School of BusinessInvestment Program
Financial Highlights
Footnotes
School of BusinessInvestment Program
Financial Highlights
School of BusinessInvestment Program
Financial Highlights
School of BusinessInvestment Program
Valuation Overview
Two Year Price Target (with tax incentive)
5 Year Price Target(without tax incentive but continued growth)
School of BusinessInvestment Program
Valuation Overview
School of BusinessInvestment Program
Ratio Analysis
Footnotes
Low Cost of Production
Higher Revenue Worldwide
Reduced Overall Acreage
School of BusinessInvestment Program
 Mean Price $94.22 Median Price $87.66
Monte Carlo Simulation
Footnotes
School of BusinessInvestment Program
Portfolio VaR
Footnotes
School of BusinessInvestment Program
Recommendation
Footnotes
School of BusinessInvestment Program
Thank You!
Footnotes
School of BusinessInvestment Program
Appendix
Footnotes
School of BusinessInvestment Program
Resources by Cost of SupplyConocoPhillips
Source: ConocoPhillips
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