ConocoPhillips grows in Alaska

Fourth quarter report, conference call: $9 billion Willow Project nearing 50% complete

Kay Cashman

Petroleum News

ConocoPhillips touted its growing presence in Alaska on Feb. 5 in an earnings call, with company officials emphasizing that the $9 billion Willow Project is nearing 50% complete and on schedule to produce oil in early 2029.

They also pointed out that further developing the company's Alaska assets is a top priority this year.

(See slide in the online issue PDF)

"We remain focused on infrastructure-led exploration and are shifting our focus this year to Alaska where we have four wells fully permitted and are looking to unlock additional resources near to our infrastructure hubs, building on our decade of disciplined exploration and appraisal spend in Alaska," said Andy O'Brien, chief financial officer of ConocoPhillips.

"We anticipate realizing approximately $1 billion of incremental free cash flow in each year from '26 through '28, with another $4 billion from Willow coming online in 2029. And that's a growth profile that's unmatched in our industry," said ConocoPhillips Chairman and Chief Executive Officer Ryan Lance.

In the Q&A part of the Feb. 5 conference call, Betty Jiang, Barclays analyst said: "I want to ask about the Alaska exploration program. So we just started this year, the first of a multiyear program. Can you speak to the objective of that exploration program? What's the risk; how big is the scale of the resource being targeted? And if successful, are we talking about extending the plateau for Willow? Or is it more upside to the ultimate production capacity of that project?"

Kirk Johnson, ConocoPhillips Executive Vice President, Global Operations and Technical Functions responded as follows: "Yes, certainly pleased to report that we're out in front of this winter season here. We got an early start, just based on weather under ice road activity. And of course, we have all of the permits required for both the wells as well as the seismic that we have planned up there ... this year. And even to that end, we were able to spud the first of those four wells just within the last couple of days.

"So strong progress that we're seeing on those four. But again, to your question around intent and objectives here, we're out there exploring to the west of Willow and actually to the south. And so as you've certainly heard from us before, our objective is to continue to find what we might describe even though it's onshore as tieback opportunities into both Willow and actually into our WNS Alpine asset as well.

"So to your point, this is an opportunity for us to identify continued volumes, continued resource plays to bring into this existing infrastructure and Willow being the next hub, if you will.

"And when we look back on our performance history there in Alaska, we have and continue to project or expect we'll produce well over double the volumes through those existing facilities through that existing infrastructure over double what we originally premised when we took FID on those. And so naturally, then that's our same objective here for Willow specifically as we explore to the west, we'll be looking for those resource opportunities to just keep that infrastructure full.

"Obviously, a bit early to start making a call on total resource size, et cetera. But naturally, we have some pretty high aspirations and targets that we're pursuing, and we'll be going after this for several years here. We've got four wells here premised this year but we've got a multiyear plan that we intend to carry out again, so that we can maximize as we do globally the infrastructure that we have and our ability to bring new volumes into that, that creates this advantaged cost of supply for us using the existing kit," Johnson finished.

Fourth quarter report

Excluding special items, fourth-quarter 2025 adjusted earnings were $1.3 billion, or $1.02 per share, compared with fourth-quarter 2024 adjusted earnings of $2.4 billion, or $1.98 per share. Special items for the quarter primarily relate to a gain on asset sales and restructuring costs.

Full-year 2025 earnings were $8.0 billion, or $6.35 per share, compared with full-year 2024 earnings of $9.2 billion, or $7.81 per share. Excluding special items, full-year 2025 adjusted earnings were $7.7 billion or $6.16 per share, compared with full-year 2024 adjusted earnings of $9.2 billion, or $7.79 per share.

"ConocoPhillips delivered another year of strong performance in 2025, achieving our CFO-based (CFO means cash flow from operations) return of capital target and growing our base dividend at a top-quartile S&P 500 rate, in line with our returns-focused value proposition. We outperformed our initial production, capital and cost guidance; successfully integrated Marathon Oil, doubling our synergy capture; and made strong progress on our incremental cost reduction and margin enhancement efforts," said Lance. "Looking ahead, we're focused on driving a $1 billion reduction in our capital and costs in 2026, while returning 45% of our CFO to shareholders."