ConocoPhillips (COP) — Agentic Tribune

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data from SEC XBRL filings. Values are as-reported; restatements supersede originals.

From 10-Q filed 2026-04-30 (period ending 2026-03-31).

Management’s Discussion and Analysis

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis is the company’s analysis of its financial performance and of significant trends that may affect future performance. It should be read in conjunction with the financial statements and notes. It contains forward-looking statements including, without limitation, statements relating to the company’s plans, strategies, objectives, expectations and intentions that are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The words “ambition,” “anticipate,” “believe,” “budget,” “continue,” “could,” “effort,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “intend,” “may,” “objective,” “outlook,” “plan,” “potential,” “predict,” “projection,” “seek,” “should,” “target,” “will,” “would” and similar expressions identify forward-looking statements. The company does not undertake to update, revise or correct any of the forward-looking information unless required to do so under the federal securities laws. Readers are cautioned that such forward-looking statements should be read in conjunction with the company’s disclosures under the heading: “CAUTIONARY STATEMENT FOR THE PURPOSES OF THE ‘SAFE HARBOR’ PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995,” beginning on page 43.

The terms “earnings” and “loss” as used in Management’s Discussion and Analysis refer to net income (loss).

Business Environment and Executive Overview

ConocoPhillips is one of the world’s leading E&P companies based on production and reserves, with operations and activities in 14 countries. Our diverse, low cost of supply portfolio includes resource-rich unconventional plays in North America; conventional assets in North America, Europe, Africa and Asia; global LNG developments; oil sands in Canada; and an inventory of global exploration prospects. Headquartered in Houston, Texas, at March 31, 2026, we employed approximately 9,700 people worldwide and had total assets of $123 billion.

Overview

At ConocoPhillips, we anticipate that commodity prices will continue to be cyclical and volatile, and our view is that a successful business strategy in the E&P industry must be resilient in lower price environments while also retaining upside during periods of higher prices. As such, we are unhedged, remain committed to our disciplined investment framework and continually monitor market fundamentals, including the impacts associated with geopolitical tensions and conflicts, global demand for our products, oil and gas inventory levels, governmental policies, tariffs, inflation and supply chain disruptions. We continue to closely monitor the macroeconomic environment and the ongoing market volatility in the energy landscape and across global markets for implications to our business, results of operations and financial condition.

Geopolitical tensions in the Middle East, including the ongoing conflict involving Iran, have increased volatility in global energy markets and may elevate risks to regional operations, infrastructure and shipping routes. We have investments in LNG facilities in Qatar, including one producing asset and two projects under construction. In March 2026, due to the conflict, QatarEnergy constrained LNG production at its major Ras Laffan facilities. Our investments have not been damaged, and there are no indications of impairment. However, further escalation could adversely affect operations, LNG transportation and construction and have broader supply chain impacts. Production from our Qatar investments was approximately four percent of total company production volumes in 2025. The company continues to monitor developments and prioritize the safety of personnel and the integrity of our operations. See Note 3.

As the global energy industry continues to evolve, we remain committed to creating long-term value for our stockholders. We believe ConocoPhillips plays an essential role in responsibly meeting the global demand for energy, while continuing to deliver competitive returns on and of capital and working to meet our previously established emissions-reduction targets. Our value proposition to deliver competitive returns to stockholders through price cycles is guided by our foundational principles which consist of maintaining balance sheet strength, providing peer-leading distributions, making disciplined investments and demonstrating responsible and reliable ESG performance.

In 2025, we made clear commitments to enhance portfolio value and structural profitability, and we remain focused on

seeing those commitments through to completion. In the second half of 2025, we announced incremental cost reductions

and margin enhancements exceeding $1 billion anticipated on a run-rate basis by year-end 2026, reflecting continued

progress toward delivering sustainable improvements in our cost structure and margins.

ConocoPhillips 2026 Q1 10-Q

Management’s Discussion and Analysis

Table of Contents

Production was 2,309 MBOED in the first quarter of 2026, a decrease of 80 MBOED from the same period a year ago. After adjusting for impacts from closed acquisitions and dispositions, first-quarter 2026 production decreased by 14 MBOED or one percent from the same period a year ago.

First-quarter 2026 production resulted in $4.3 billion of cash provided by operating activities. We returned $2.0 billion to shareholders, consisting of $1.0 billion through share repurchases and $1.0 billion through our ordinary dividend. We ended the quarter with cash, cash equivalents, restricted cash and short-term investments totaling $6.7 billion and long-term investments in debt securities of $1.2 billion.

Also in the first quarter of 2026, we re-invested $2.9 billion into the business in the form of capital expenditures and investments, with over half of the expenditures related to flexible, short-cycle unconventional plays in the Lower 48 segment.

In April 2026, we declared a second-quarter ordinary dividend of $0.84 per share.

ConocoPhillips 2026 Q1 10-Q

Management’s Discussion and Analysis

Table of Contents

Business Environment

Commodity prices are the most significant factor impacting our profitability and related returns on and of capital to our shareholders. Dynamics that could influence world energy markets and commodity prices include, but are not limited to, global economic health, supply or demand disruptions or fears thereof caused by civil unrest, global pandemics, military conflicts, actions taken by OPEC Plus and other major oil producing countries, environmental laws, tariffs, governmental policies and weather-related disruptions. Our strategy is to create value through price cycles by delivering on the financial, operational and ESG priorities that underpin our value proposition.

Our earnings and operating cash flows generally correlate with price levels for crude oil and natural gas, which are subject to factors external to the company and over which we have no control. The following graph depicts the trend in average benchmark prices for WTI crude oil, Brent crude oil and U.S. Henry Hub natural gas:

The following table presents average prices for the first quarter of 2026 compared to the first quarter of 2025.

	Three Months Ended March 31
Industry Prices	2026	2025	Change
Brent ($ per BBL)	80.61	75.66	7	%
WTI ($ per BBL)	71.93	71.42	1	%
Henry Hub ($ per MMBTU)	5.05	3.65	38	%
Average Realized Prices
Crude ($ per BBL)	73.47	71.65	3	%
Bitumen ($ per BBL)	50.37	45.29	11	%
Gas ($ per MCF)	4.09	5.62	(27)	%
Total ($ per BOE)	50.36	53.34	(6)	%

Oil and bitumen prices were higher in the first quarter of 2026 compared to the same period of 2025 as Middle East supply disruptions corresponded to higher market prices.

U.S. Henry Hub prices improved due to Winter Storm Fern impacts on market supplies. The risk of volatility in regional markers remains throughout 2026.

Total realized prices were lower in the first quarter of 2026 compared to the same period of 2025 despite increased commodity prices, primarily due to lower realized gas prices in the Permian.

ConocoPhillips 2026 Q1 10-Q

Management’s Discussion and Analysis

Table of Contents

Key Operating and Financial Summary

•Reported first-quarter 2026 earnings per share of $1.78;

•Generated cash provided by operating activities of $4.3 billion;

•Declared second-quarter ordinary dividend of $0.84 per share;

•Updated full-year production and capital guidance, operating cost guidance unchanged;

•Delivered total company and Lower 48 production of 2,309 MBOED and 1,453 MBOED, respectively;

•Distributed $2.0 billion to shareholders, including $1.0 billion through share repurchases and $1.0 billion through the ordinary dividend;

•Conducted successful Willow winter construction season with project achieving 50% completion;

•Completed four-well Alaska winter exploration program with evaluation underway and secured high-priority acreage in National Petroleum Reserve in Alaska (NPR-A) lease sale;

•Enhanced Lower 48 capital efficiency by more than doubling percentage of 3-mile plus lateral length wells drilled compared with prior year;

•Executed LNG tolling agreement for third-party operated gas volumes in Equatorial Guinea, extending life of LNG facility well into the next decade; and

•Ended the quarter with cash, cash equivalents, restricted cash and short-term investments of $6.7 billion and long-term investments of $1.2 billion.

Outlook

Production and Capital

For the second quarter, the company is excluding Qatar from production guidance, given uncertainty surrounding the conflict in the Middle East. Second-quarter production is expected to be 2.185 to 2.215 MMBOED.

Full-year production is expected to be 2.295 to 2.325 MMBOED. This reflects a 20 MBOED annual adjustment for Qatar, given the exclusion of Qatar production from second-quarter guidance, as well as a 15 MBOED annual royalty rate adjustment at Surmont due to higher oil prices.

Capital spending for 2026 is expected to be $12 to $12.5 billion.

All other guidance remains unchanged.

ConocoPhillips 2026 Q1 10-Q

Results of Operations

Table of Contents

Results of Operations

Unless otherwise indicated, discussion of consolidated results for the three-month period ended March 31, 2026, is based on a comparison with the corresponding period of 2025. Throughout the document, certain totals and percentages may differ from the precise sum of the underlying components due to rounding.

Consolidated Results

Summary Operating Statistics

	Three Months Ended March 31
	2026	2025
Average Net Production
Crude oil (MBD)
Consolidated operations	1,100	1,153
Equity affiliates	11	13
Total crude oil	1,111	1,166
Natural gas liquids (MBD)
Consolidated operations	408	394
Equity affiliates	7	8
Total natural gas liquids	415	402
Bitumen (MBD)	118	143
Natural gas (MMCFD)
Consolidated operations	2,822	2,840
Equity affiliates	1,166	1,230
Total natural gas	3,988	4,070
Total Production (MBOED)	2,309	2,389
Total Production (MMBOE)	208	215

	Dollars Per Unit
Average Sales Prices
Crude oil (per BBL)
Consolidated operations	$	73.52	71.61
Equity affiliates	68.79		75.57
Total crude oil	73.47		71.65
Natural gas liquids (per BBL)
Consolidated operations	20.06		24.86
Equity affiliates	46.27		52.34
Total natural gas liquids	20.42		25.40
Bitumen (per BBL)	50.37		45.29
Natural gas (per MCF)
Consolidated operations	3.34		4.76
Equity affiliates	5.87		7.56
Total natural gas	$	4.09	5.62

ConocoPhillips 2026 Q1 10-Q

Results of Operations

Table of Contents

	Millions of Dollars
	Three Months Ended March 31
	2026		2025
Exploration Expenses
General administrative, geological and geophysical, lease rental and other	$	75	56
Leasehold impairment	25		18
Dry hole	9		43
Total exploration expenses	$	109	117

Total Company Production

We explore for, produce, transport and market crude oil, bitumen, natural gas, LNG and NGLs on a worldwide basis. In the quarter ended March 31, 2026, our operations were producing in the U.S., Australia, Canada, China, Equatorial Guinea, Libya, Malaysia, Norway and Qatar.

Total production in the first quarter of 2026 was 2,309 MBOED, a decrease of 80 MBOED or three percent from the same period a year ago. Production decreases were primarily driven by normal field decline.

Production decreases were partly offset by new wells online in the Lower 48, Canada, Alaska, China, Australia and Libya.

After adjusting for impacts from closed acquisitions and dispositions, first-quarter 2026 production decreased by 14 MBOED or one percent from the same period a year ago.

ConocoPhillips 2026 Q1 10-Q

Results of Operations

Table of Contents

Income Statement Analysis

Unless otherwise indicated, all results in Income Statement Analysis are before-tax.

Below is select financial data provided on a consolidated basis. The full Income Statement can be found in Item 1. Financial Statements.

	Millions of Dollars
	Three Months Ended March 31
	2026		2025
Sales and other operating revenues	$	15,761	16,517
Equity in earnings of affiliates	247		392
Purchased commodities	6,283		6,188
Production and operating expenses	2,276		2,506
Depreciation, depletion and amortization	2,906		2,746
Taxes other than income taxes	607		551

Sales and other operating revenues for the three-month period of 2026 decreased $756 million. Decreases include lower volumes of $420 million and lower realized natural gas and NGL prices of $537 million. These decreases were partly offset by higher crude and bitumen prices of $243 million.

Equity in earnings of affiliates for the three-month period of 2026 decreased $145 million due to lower earnings primarily driven by lower prices and production. There were no impairment indicators identified during the quarter, and we continue to monitor the recoverability of our equity method investments.

Purchased commodities for the three-month period of 2026 increased $95 million, primarily due to higher power prices, higher power and gas volumes and higher LNG activity. These increases were partly offset by lower derivatives impacts and crude volumes.

Production and operating expenses for the three-month period of 2026 decreased $230 million, primarily due to lower activity levels and increased efficiencies.

DD&A for the three-month period of 2026 increased $160 million, primarily due to higher DD&A rates, driven by higher net book values from the finalized allocations of our Marathon Oil purchase price to specific assets and lower proved developed reserves as of December 31, 2025.

ConocoPhillips 2026 Q1 10-Q

Results of Operations

Table of Contents

Segment Results

Unless otherwise indicated, discussion of segment results for the three-month period ended March 31, 2026, is based on a comparison with the corresponding period of 2025 and are shown after-tax.

A summary of the company's net income (loss) by business segment follows:

	Millions of Dollars
	Three Months Ended March 31
	2026		2025
Alaska	$	294	327
Lower 48	1,403		1,790
Canada	85		256
Europe, Middle East and North Africa	265		419
Asia Pacific	295		311
Segment Totals	2,342		3,103
Corporate and Other	(159)		(254)
Net income (loss)	$	2,183	2,849

For further discussion of segment results, see the following pages.

ConocoPhillips 2026 Q1 10-Q

Results of Operations

Table of Contents

Alaska

	Three Months Ended March 31
	2026		2025
Select financial data by segment before-tax ($MM)
Sales and other operating revenues	$	1,523	1,610
Production and operating expenses	475		506
Depreciation, depletion and amortization	352		355
Taxes other than income taxes	148		60
Net income (loss) ($MM)	$	294	327
Average Net Production
Crude oil (MBD)	176		184
Natural gas liquids (MBD)	15		16
Natural gas (MMCFD)	25		48
Total Production (MBOED)	195		208
Total Production (MMBOE)	18		19
Average Sales Prices
Crude oil ($ per BBL)	$	81.77	76.58
Natural gas ($ per MCF)	3.73		3.87

The Alaska segment primarily explores for, produces, transports and markets crude oil, NGLs and natural gas. As of March 31, 2026, Alaska contributed 12 percent of our consolidated liquids production and one percent of our consolidated natural gas production.

Net Income (Loss)

Alaska reported earnings of $294 million in the first quarter of 2026, compared with earnings of $327 million in the first quarter of 2025.

Earnings in the first quarter of 2026 included lower sales revenues resulting from lower produced volumes of $53 million and timing of sales. These decreases were partly offset by higher realized prices of $68 million. Additional decreases to earnings included higher taxes other than income taxes of $67 million, driven by the absence of an impact from the settlement of a contingent matter, and higher exploration expenses of $20 million, primarily driven by increased seismic work. Increases to earnings included lower production and operating expenses of $24 million driven by lower workover activity.

Production

Average production decreased 13 MBOED in the three-month period of 2026 primarily driven by normal field decline.

The production decreases were partly offset by new wells online in the second half of 2025.

ConocoPhillips 2026 Q1 10-Q

Results of Operations

Table of Contents

Lower 48

	Three Months Ended March 31
	2026		2025
Select financial data by segment before-tax ($MM)
Sales and other operating revenues	$	11,080	11,548
Production and operating expenses	1,253		1,491
Depreciation, depletion and amortization	2,051		1,904
Taxes other than income taxes	394		429
Net income (loss) ($MM)	$	1,403	1,790
Average Net Production
Crude oil (MBD)	731		753
Natural gas liquids (MBD)	377		363
Natural gas (MMCFD)	2,067		2,080
Total Production (MBOED)	1,453		1,462
Total Production (MMBOE)	131		132
Average Sales Prices
Crude oil ($ per BBL)	$	70.30	69.47
Natural gas liquids ($ per BBL)	19.82		24.84
Natural gas ($ per MCF)	1.19		2.65

The Lower 48 segment consists of operations located in the U.S. Lower 48 states and commercial operations. As of March 31, 2026, the Lower 48 contributed 68 percent of our consolidated liquids production and 73 percent of our consolidated natural gas production.

Net Income (Loss)

Lower 48 reported earnings of $1,403 million in the first quarter of 2026, compared with earnings of $1,790 million in the first quarter of 2025.

Earnings in the first quarter of 2026 included lower sales revenues resulting from lower overall realized prices of $303 million, driven by lower gas realizations and NGL prices, and lower volumes of $85 million. Additional decreases to earnings include higher DD&A of $115 million, primarily driven by higher rates, due to higher net book values from the finalized allocations of our Marathon Oil purchase price to specific assets, and lower proved developed reserves as of December 31, 2025. Increases to earnings in the first quarter of 2026 included lower production and operating expenses of $186 million, primarily driven by efficiencies and decreased activity.

Production

Average production decreased nine MBOED in the three-month period of 2026. Production decreases were primarily driven by normal field decline and dispositions of assets in 2025.

Decreases to production were partly offset by new wells online from our development programs in the Delaware Basin, Eagle Ford, Midland Basin and Bakken.

ConocoPhillips 2026 Q1 10-Q

Results of Operations

Table of Contents

Canada

	Three Months Ended March 31
	2026		2025
Select financial data by segment before-tax ($MM)
Sales and other operating revenues	$	1,017	985
Production and operating expenses	189		201
Depreciation, depletion and amortization	152		131
Taxes other than income taxes	10		9
Net income (loss) ($MM)	$	85	256
Average Net Production
Crude oil (MBD)	16		17
Natural gas liquids (MBD)	7		6
Bitumen (MBD)	118		143
Natural gas (MMCFD)	131		109
Total Production (MBOED)	164		184
Total Production (MMBOE)	15		17
Average Sales Prices
Crude oil ($ per BBL)	$	64.13	62.41
Natural gas liquids ($ per BBL)	29.33		27.96
Bitumen ($ per BBL)	50.37		45.29
Natural gas ($ per MCF)*	1.68		1.35

*Average sales prices include unutilized transportation costs.

The Canada segment operations include the Surmont oil sands development in Alberta, the Montney unconventional play in British Columbia and commercial operations. As of March 31, 2026, Canada contributed nine percent of our consolidated liquids production and five percent of our consolidated natural gas production.

Net Income (Loss)

Canada reported earnings of $85 million in the first quarter of 2026, compared with earnings of $256 million in the first quarter of 2025.

Earnings in the first quarter of 2026 included higher sales revenues resulting from higher realized prices of $46 million and timing of sales. These increases were partly offset by lower volumes of $78 million and a pending claim of $63 million. Additional decreases to earnings included lower other income of $56 million primarily from a change in the fair value measurement associated with the Surmont contingent consideration arrangement. See Note 8.

Production

Average production decreased 20 MBOED in the three-month period of 2026. Decreases to production resulted from higher variable royalties in Surmont following a post-payout event in 2025 and a rate increase due to higher prices, as well as normal field decline. The Surmont royalties are based on a sliding scale ranging from 25 percent to 40 percent, calculated under the oil sands royalty regime as a percentage of gross revenue, net of allowable deductions post-payout, indexed to WTI prices between $55 CAD and $120 CAD.

Production decreases were partly offset by new wells online in the Montney area.

ConocoPhillips 2026 Q1 10-Q

Results of Operations

Table of Contents

Europe, Middle East and North Africa

	Three Months Ended March 31
	2026		2025
Select financial data by segment before-tax ($MM)
Sales and other operating revenues	$	1,627	1,940
Production and operating expenses	257		224
Depreciation, depletion and amortization	239		219
Taxes other than income taxes	15		12
Net income (loss) ($MM)	$	265	419

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Next expected filings

~2026-08-06 10-Q expected by 2026-08-12 (in 97 days)
~2026-11-05 10-Q expected by 2026-11-11 (in 188 days)
~2027-02-16 10-K expected by 2027-03-01 (in 291 days)
~2027-04-29 10-Q expected by 2027-05-05 (in 363 days)

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Recent SEC filings

2026-04-30 8-K Earnings Release; Financial Statements and Exhibits
2026-04-30 10-Q Quarterly Report
2026-02-17 10-K Annual Report
2026-02-05 8-K Earnings Release; Financial Statements and Exhibits
2025-11-06 10-Q Quarterly Report
2025-11-06 8-K Earnings Release; Financial Statements and Exhibits
2025-08-07 10-Q Quarterly Report
2025-08-07 8-K Earnings Release; Financial Statements and Exhibits
2025-07-01 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
2025-05-08 10-Q Quarterly Report
2025-05-08 S-4 Registration (Merger)
2025-05-08 8-K Earnings Release; Officer/Director Change; Financial Statements and Exhibits
2025-02-18 10-K Annual Report
2025-02-06 8-K Earnings Release; Financial Statements and Exhibits
2025-01-28 8-K Officer/Director Change

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