|
First quarter advances
ConocoPhillips Alaska reaches Willow milestones, construction camp open
Kay Cashman Petroleum News
In a May 8 first quarter earnings conference call in Houston, Texas, ConocoPhillips Senior Vice President Kirk Johnson described key milestones reached on the Willow project in the National Petroleum Reserve-Alaska, milestones that were required to ensure that the project "remains on track, fully in support of first oil in 2029."
His comments were in response to a question from an analyst asking for a detailed description of the milestones mentioned in presentations.
"We ramped to roughly 2,400 people on the North Slope, which again reaffirms that this was our peak winter construction season," Johnson said.
"So on ... winter construction, we're now roughly 50%, if not slightly better, on completion of all of our civil scopes -- roads, pads, bridges -- and we've got about 80 miles of pipeline installed."
And "very importantly," Johnson said the project team executed a horizontal directional drill underneath "one of the key waterways and that allows us to connect east-west pipelines. ... Again, we continued build out of that infrastructure."
He offered kudos to the people working on the project saying they had a "really strong safety performance. We saw some really strong efficiencies in a broad span of work across those activities."
As Johnson has previously mentioned, "really critical this year as well was that operations center pad. ... Those modules that we sealifted up there last year, those are now set on the pad."
Project operator and subsidiary ConocoPhillips Alaska also opened its Willow Construction Camp, "and that becomes important because it allows us to begin construction work on the North Slope a bit more throughout the year as opposed to being completely confined to the winter season," Johnson said.
Outside of Alaska, engineering and fabrication on Willow's processing modules continues to go well, he said.
"And then, of course, key for us there this year being our second major season on this project is procurement activities and sourcing activities. ... we do expect to source and receive a bulk of the engineered equipment that's required to procure, again, for those process modules as well as all this forward-looking work that we have on the Slope," Johnson said, noting that by year end, the company will have 90% to 95% of that work sourced.
About one-third of capital spend for 2025 has been in the first three or four months of the year with capital spending tapering down through the remainder of the year, he said.
West of Willow In ConocoPhillips' fourth-quarter 2024 earnings conference call on Feb. 6, an analyst noted that the state has "gotten a lot of attention from the Trump administration so far and even had its own executive order. ... Could you remind us how you're thinking about the western North Slope opportunity set and whether or not the policy environment creates more of an opportunity to move forward ...over the next few years?"
Johnson responded to that query, saying "Yeah, there's certainly been quite a bit of press out there around NPR-A. ... we're pleased to see that President Trump and that administration issued an executive order to, in essence, reverse what came about here late last year. ... Yes, we're looking forward to partnering with the Department of Interior and especially with the state of Alaska. "Fundamentally, we believe that continued exploration west of Willow ... is the right thing to do for energy. It's the right thing to do for the state of Alaska and its stakeholders. And clearly, we're in a really good position. We're putting ourselves in a position to continue exploring west of Willow, as that's enabled for us."
Alaska earnings In connection with ConocoPhillips' first quarter 2025 earnings, ConocoPhillips Alaska reported a net income of $327 million.
During the quarter, ConocoPhillips Alaska incurred an estimated $362 million in taxes and royalties, which includes $251 million to the state of Alaska and $111 million to the federal government.
Additionally, in the first quarter of 2025, ConocoPhillips Alaska invested more than $1 billion in capital.
"We completed the largest winter construction season on the Willow project and achieved critical milestones, keeping the project on track for first oil in 2029," stated Erec Isaacson, president of ConocoPhillips Alaska.
"We continue to deepen our Alaska portfolio through optimization and exploration. We have a strong pipeline of resource opportunities across our operated assets which will drive growth in Kuparuk through Nuna, Coyote and viscous developments, and in Western North Slope satellite reservoirs. This continuing activity underscores our commitment to Alaska and demonstrates the effectiveness of ... fiscal stability in our state," Isaacson added.
Since 2007, ConocoPhillips Alaska has incurred more than $46 billion in taxes and royalties to the state of Alaska and the federal government. Of that amount, approximately $36 billion went directly to the state. In that same period, ConocoPhillips Alaska's earnings were approximately $28 billion.
ConocoPhillips Alaska has been a leader within Alaska's oil industry for more than 50 years.
Parent company earnings ConocoPhillips highlights for first quarter were as follows:
*Reported first-quarter 2025 earnings per share of $2.23 and adjusted earnings per share of $2.09.
*Generated cash provided by operating activities of $6.1 billion and cash from operations of $5.5 billion.
*Lowered both full-year capital expenditures and adjusted operating cost guidance while maintaining full-year production guidance.
*Declared second-quarter ordinary dividend of $0.78 per share.
"ConocoPhillips continued to demonstrate strong execution in the first quarter, and we reduced our full-year capital and operating cost guidance," said Ryan Lance, chairman and chief executive officer. "Amid a volatile macro environment, we remain confident in the competitive advantages provided by our differentiated portfolio, strong balance sheet and disciplined capital allocation framework that prioritizes returns on and of capital to shareholders."
| 