Does ConocoPhillips Stock Face A Downside Risk?

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shares of ConocoPhillips (NYSE:COP) Benchmark oil and gas prices have touched a high of $100 in recent months on the back of a jump in demand and rising transportation demand. In 2021, the company reported 1.04 MMBPD of liquid production which is about 1% of global crude oil production. While geopolitical uncertainty caused by the Russo-Ukraine war is driving benchmark oil prices up, rising inflation is threatening global economic growth and triggering measures such as the new Energy Security Coalition. Our interactive dashboard is on Evaluation of ConocoPhillips Historical trends have been highlighted in revenue, earnings, valuation multiplier and forecast for FY 2022.

before the pandemic, ConocoPhillips Revenue It saw 15% annual growth, from $24.3 billion in 2016 to $36.6 billion in 2019, due to benchmark prices and expanding production. The average real price of COP for oil has ranged from $37/bbl in 2016 to $65/bbl in 2018 to $58/bbl in 2019. Due to the deep contraction in benchmark prices in 2020, the company has reduced total crude oil and natural gas production by 15%. % Helped in cash generation in the form of lower cost of production. In addition, the company maintained dividend payments by implementing a prudent capital investment plan and using cash on hand. Given the recent jump in benchmark oil prices, the company is returning excess cash to shareholders through dividends and buybacks. In a recent investor presentation, the company highlighted its plans to return $10 billion of capital to shareholders and accelerate debt reduction in 2022.

EIA and World Bank forecast fall in Brent benchmark

In 2021, the company’s crude oil, natural gas, natural gas liquids and other products contributed 51%, 37%, 4% and 8%, respectively, to total revenue. Along with pushing revenue from increased capital investments in oil and gas assets, the company announced a net-zero (Scope 1 and Scope 2) roadmap by prioritizing opportunities in CCUS (carbon capture, utilization and storage) and hydrogen. Per EIA, the Brent benchmark is likely to go down from $103 in 2022 to $97 in 2023. Similarly, the World Bank expects Brent crude to fall from $100 in 2022 to $92 in 2023 and $80 in 2024. While the West has imposed tough sanctions on Russia, oil and gas embargoes are a difficult decision due to many transportation and economic concerns. (related: Could Amazon Stock Add Two Exxon Mobils to Its Market Capitalization?,

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