ConocoPhillips Reveals Plan to Stay Flexible

ConocoPhillips New Plan
ConocoPhillips New Plan

ConocoPhillips announced yesterday the company's strategic plans through 2017 that are designed to increase flexibility and returns while reducing costs.

Related: ConocoPhillips Reports Q4 Losses

In what the ConocoPhillips calls their “disciplined approach for the new world” the company will shift capital allocations to unconventional shale plays because of the low supply costs and flexibility for growth. The long range plans set out in a recent company presentation include:

  • Spending 50% more over the next three years
  • Focusing on the Eagle Ford, Bakken and Permian basins
  • Capital spending will stay at $11.5B/year through 2017 but shift from long-term, expensive projects into relatively cheap and immediate shale wells
  • Boosting production by 6.3% to 1.7M bbl/day by 2017.
  • Cost reduction programs to source $1B of reductions in 2016 compared to 2014
Ryan Lance, chairman and chief executive officer noted “The energy landscape has changed dramatically as a result of the recent decline in commodity prices, but we responded quickly to position the company as a core energy holding in a lower, more volatile price environment.

ConocoPhillips’ strategy for the Bakken includes tapping into the highest value part of the play, increasing drilling and completion efficiencies and optimizing field development through pilot programs for the following:

  • Testing fluids, proppant loading and cluster spacing
  • 2 pilots in execution testing Middle Three Forks well placement
  • 5 pilots underway testing tighter spacing