CONOCOPHILLIPS
For the period ended Jun 30, 2024. Filed Aug 1, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 1, 2024
COP$136.27+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-02.
0001163165-24-000023
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001163165-24-000037
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 254 previous paragraphs and 248 current paragraphs.
146 unchanged; 59 reworded; 43 added; 46 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 57 previous and 58 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (43)
Current report
Announced Acquisition of Marathon Oil Corporation
Current report
In May 2024, we announced a definitive agreement (the Merger Agreement) to acquire Marathon Oil Corporation (Marathon Oil) in an all-stock transaction (the Marathon Oil acquisition) with an enterprise value of approximately $22.5 billion based upon closing share prices on May 28, 2024, and inclusive of Marathon Oil's debt of approximately $5.4 billion at March 31, 2024. Under the terms of the Merger Agreement, which has been unanimously approved by the boards of directors of each company, Marathon Oil stockholders will receive 0.255 shares of ConocoPhillips common stock for each Marathon Oil share. We expect that the Marathon oil acquisition will add high-quality, low cost of supply, development opportunities to our existing U.S. onshore portfolio and additional LNG capacity to our global LNG portfolio. We anticipate closing in the fourth quarter of 2024, subject to the approval of Marathon Oil stockholders, regulatory clearances and other customary closing conditions. See Item 1A. Risk Factors.
Current report
Within the first full year following the close of the transaction, we expect our annualized cost and capital expenditure rates to reflect at least $500 million of synergies. Concurrent with our Marathon Oil acquisition announcement, we detailed a plan to repurchase over $7 billion of shares in the first full year following the closing of the transaction and over $20 billion of shares in total over the first three years, in each case at recent commodity prices. Through this plan we expect to retire the equivalent amount of newly issued equity from the transaction in two to three years at recent commodity prices. Further, in conjunction with the Marathon Oil acquisition announcement, we announced a plan to dispose of approximately $2 billion of assets across the portfolio pursuant to ongoing high-grading and optimization efforts.
Current report
In July, we announced further growth to our global LNG portfolio. We entered into an 18-year agreement securing regasification capacity at the Zeebrugge LNG terminal in Belgium which includes regasification services for approximately 0.75 MTPA of LNG beginning in 2027. We also entered into a long-term LNG sales agreement for approximately 0.5 MTPA into Asia starting in 2027. These agreements provide additional access to the European and Asian natural gas markets.
Current report
•Reported second-quarter 2024 earnings per share of $1.98;
Current report
•Generated cash provided by operating activities of $4.9 billion;
Current report
•Declared ordinary dividend of $0.58 per share and VROC of $0.20 per share payable in the third quarter;
Current report
•Announced agreement to acquire Marathon Oil in an all-stock transaction;
Current report
•Delivered total company and Lower 48 production of 1,945 MBOED and 1,105 MBOED, respectively;
Current report
•Reached first production ahead of schedule at Eldfisk North in Norway;
Current report
•Achieved significant milestones at Willow with arrival of Operations Center modules in Alaska and commencement of the Central Facility fabrication earlier than planned;
Current report
•Advanced global LNG strategy by signing a long-term regasification agreement at Zeebrugge LNG terminal in Belgium and a long-term LNG sales agreement in Asia, both commencing in 2027;
Current report
Production, Capital and DD&A
Current report
Full-year capital expenditures guidance is updated to approximately $11.5 billion versus prior range of $11.0 to $11.5 billion, due to strong progress on Willow and increased Lower 48 partner-operated activity.
Current report
Full-year DD&A guidance is lowered to $9.3 to $9.4 billion versus prior guidance of $9.4 to $9.6 billion.
Current report
Total Company Production
Current report
Total production in the second quarter of 2024 was 1,945 MBOED, an increase of 140 MBOED or eight percent. Total production in the six-month period of 2024 was 1,923 MBOED, an increase of 125 MBOED or seven percent. Production increases include:
Current report
Production for the first six months of 2024 was 1,923 MBOED, an increase of 125 MBOED from the same period a year ago. After adjusting for closed acquisitions and dispositions, production increased 60 MBOED or three percent from the same period a year ago.
Current report
Below is select financial data provided on a consolidated basis. The full Income Statement can be found in Item 1. Financial Statements.
Current report
Sales and other operating revenues increased $1,269 million in the second quarter of 2024 and increased $306 million in the six-month period of 2024, respectively. Increases in the second quarter were due to higher volumes of $573 million and higher realized prices of $548 million. Increases in the six-month period of 2024 were due to higher volumes of $949 million and higher realized prices of $227 million, partially offset by lower commercial performance.
Current report
DD&A expenses for the three- and six-month periods of 2024 increased $324 million and $593 million, respectively, mainly due to higher rates in our Lower 48 and Alaska segments and higher volumes primarily in our Canada segment.
Current report
For further discussion of segment results, see the following pages.
Current report
Alaska reported earnings of $360 million and $706 million in the three- and six-month periods of 2024, respectively, compared with earnings of $372 million and $788 million in the three- and six-month periods of 2023, respectively.
Current report
Earnings in the second quarter of 2024 included higher sales revenues resulting from higher realized prices of $131 million, partially offset by lower volumes of $45 million. Earnings decreases in the second quarter of 2024 included higher production and operating expenses of $22 million driven by higher well work activity, higher DD&A expenses of $39 million due to higher rates as a result of prior year-end downward reserve revisions and higher impairments of $24 million due to a project cancellation.
Current report
Lower 48 reported earnings of $1,259 million and $2,640 million in the three- and six-month periods of 2024, respectively, compared with earnings of $1,230 million and $3,082 million in the three- and six-month periods of 2023, respectively.
Current report
Earnings in the second quarter of 2024 included higher revenues resulting from higher overall realized prices of $184 million, inclusive of a $116 million impact from lower realized gas prices, and higher volumes of $76 million. Earnings decreases in the second quarter of 2024 included higher production and operating expenses of $100 million, driven by increased lease operating expenses of $51 million and increased transportation related costs of $32 million, as well as higher DD&A expenses of $116 million, driven by higher rates of $85 million and higher production volumes of $33 million.
Current report
Earnings in the six-month period of 2024 included lower revenues resulting from lower commercial performance and timing, partially offset by higher volumes of $93 million and higher overall realized prices of $63 million, inclusive of a $253 million impact from lower realized gas prices. Earnings decreases in the six-month period of 2024 included higher production and operating expenses of $195 million, driven by increased lease operating expenses of $87 million and increased transportation related costs of $65 million, higher DD&A expenses of $205 million, driven by higher rates of $170 million and higher production volumes of $25 million.
Current report
Canada reported earnings of $261 million and $441 million in the three- and six-month periods of 2024, respectively, compared with earnings of $32 million and $38 million in the three- and six-month periods of 2023, respectively.
Current report
Earnings in the second quarter of 2024 included higher sales revenues resulting from higher volumes of $310 million, driven by our increased working interest in Surmont, and realized prices of $67 million. Earnings decreases in the second quarter of 2024 included higher production and operating expenses of $73 million, driven by our increased working interest in Surmont, and higher DD&A expenses of $62 million.
Current report
Earnings in the six-month period of 2024 included higher sales revenues resulting from higher volumes of $558 million, driven by our increased working interest in Surmont, and realized prices of $123 million. Earnings decreases in the six-month period of 2024 included higher production and operating expenses of $134 million, driven by our increased working interest in Surmont, and higher DD&A expenses of $113 million.
Current report
Europe, Middle East and North Africa reported earnings of $251 million and $555 million in the three- and six-month periods of 2024, respectively, compared with earnings of $264 million and $629 million in the three- and six-month periods of 2023, respectively.
Current report
Earnings in the second quarter of 2024 included lower sales revenues of $20 million. Earnings decreases in the second quarter of 2024 included lower foreign exchange gains of approximately $21 million related to NOK to USD exchange rate fluctuations.
Current report
Earnings in the six-month period of 2024 included lower sales revenues resulting from lower realized prices of $61 million partially offset by higher volumes of $26 million. Earnings decreases in the six-month period of 2024 included lower foreign exchange gains of approximately $40 million related to NOK to USD exchange rate fluctuations.
Current report
Eldfisk North First Production in Norway
Current report
In May 2024, we reached first production ahead of schedule at Eldfisk North in Norway.
Current report
Asia Pacific reported earnings of $444 million and $956 million in the three- and six-month periods of 2024, respectively, compared with earnings of $387 million and $909 million in the three- and six-month periods of 2023, respectively.
Current report
Earnings in the second quarter of 2024 included higher sales revenues resulting from higher realized prices of $34 million and higher volumes of $20 million.
Current report
Average consolidated production increased 3 MBOED in the three-month period of 2024 and was flat in the six-month period of 2024. Increases to production were primarily due to Bohai Bay development activity in China and lower downtime in Malaysia.
Current report
•Our or Marathon Oil’s inability to receive other requisite approvals for the Marathon Oil acquisition, including the approval of Marathon Oil stockholders, the satisfaction of other closing conditions on a timely basis or at all or the failure of the Marathon Oil acquisition to close for any other reason or to close on anticipated terms, including the anticipated tax treatment.
Current report
•Our inability to successfully integrate Marathon Oil’s business and technologies, which may result in the combined company not operating as effectively and efficiently as expected.
Showing the first 40 of 43 passages. Open the source sections for the rest.
Removed paragraphs (46)
Previous report
•Delivered total company production of 1,902 MBOED;
Previous report
•Produced 1,046 MBOED in the Lower 48, including 736 MBOED from Permian, 197 MBOED from the Eagle Ford and 96 MBOED from the Bakken;
Previous report
•Executed a successful first major winter construction season at Willow in Alaska and advanced development of LNG projects in the U.S. and Qatar;
Previous report
•Continued ramp-up from recent international project startups including Surmont Pad 267 in Canada, several sub-sea tiebacks in Norway and Bohai Phase 4B in China;
Previous report
•Progressed Montney development program following startup of the second phase of the company's central processing facility in Canada, resulting in record production for the asset;
Previous report
•Achieved 1,000th LNG cargo export milestone at Australia Pacific LNG Pty Ltd. in April;
Previous report
•Retired debt of $0.5 billion at maturity; and
Previous report
All full-year guidance items remain unchanged.
Previous report
Net income (loss) in the first quarter of 2024 decreased $369 million. First quarter earnings were negatively impacted by:
Previous report
•Lower realized gas and NGL commodity prices.
Previous report
•Lower commercial performance and timing.
Previous report
•Higher DD&A expenses due to higher rates across our segments and higher volumes primarily in our Canada segment resulting from our acquisition of additional working interest in Surmont, which closed in October 2023. See Note 3.
Previous report
•Higher production and operating expenses primarily driven by higher production volumes associated with our acquisition of additional working interest in Surmont in addition to higher expenses in our Lower 48 and Alaska segments due to higher lease operating expenses and well work activities of approximately $55 million and higher transportation related charges of approximately $44 million. See Note 3.
Previous report
•Lower LNG sales prices, reflected in equity in earnings of affiliates.
Previous report
Offsets to the earnings decreases include:
Previous report
•Higher sales volumes driven primarily by our Surmont acquisition in our Canada segment. See Note 3.
Previous report
•Higher realized bitumen and crude oil prices.
Previous report
•A tax benefit of $76 million recorded in the first quarter of 2024 associated with deepwater investment tax incentive for Malaysia Blocks J and G. See Note 19.
Previous report
See the “Segment Results” section for additional information.
Previous report
Sales and other operating revenues decreased $963 million, primarily due to lower realized natural gas and NGL prices, partially offset by higher sales volumes resulting from our acquisition of additional working interest in Surmont in our Canada segment, which closed in October 2023, and higher realized bitumen and crude prices. See Note 3.
Previous report
DD&A expenses increased $269 million, mainly due to higher rates across our segments as well as higher volumes primarily in our Canada segment resulting from the acquisition of additional working interest in Surmont. See Note 3.
Previous report
See Note 19—Income Taxes for information regarding our Income tax provision (benefit) and effective tax rate.
Previous report
Total production in the first quarter of 2024 was 1,902 MBOED, an increase of 110 MBOED or six percent. Production increases include:
Previous report
Earnings from Alaska decreased $70 million in the first quarter of 2024. Decreases to earnings include:
Previous report
•Higher production and operating expenses primarily due to higher well work activity of $13 million and higher transportation related costs of $11 million.
Previous report
•Higher exploration expenses primarily due to increased seismic work of $26 million.
Previous report
Offsets to the earnings decreases were primarily driven by the absence of first-quarter 2023 dry hole expenses.
Previous report
Earnings from the Lower 48 decreased $471 million in the first quarter of 2024. Decreases to earnings include:
Previous report
•Lower realized natural gas and NGL prices.
Previous report
•Lower commercial performance and timing.
Previous report
•Higher production and operating expenses primarily due to increased lease operating expenses of $36 million and increased transportation related costs of $31 million.
Previous report
•Higher DD&A expenses primarily due to higher rates driven from increased capital additions.
Previous report
Offsets to the earnings decrease were primarily driven by higher natural gas and NGL sales volumes.
Previous report
Earnings from Canada increased $174 million in the first quarter of 2024. Increases to earnings include:
Previous report
•Higher realized bitumen prices.
Previous report
Offsets to the earnings increases include:
Previous report
•Higher production and operating expenses primarily due to higher production volumes as a result of our increased working interest in Surmont. See Note 3.
Previous report
•Higher DD&A expenses of $51 million primarily due to higher production volumes as a result of our Surmont acquisition, partially offset by lower rates in Surmont.
Previous report
Average production increased 81 MBOED in the first quarter of 2024. Increases to production include:
Previous report
•Higher volumes as a result of our increased working interest in Surmont. See Note 3.
Showing the first 40 of 46 passages. Open the source sections for the rest.
Reworded paragraphs (59)
Previous wording
ConocoPhillips is one of the world’s leading E&P companies based on production and reserves, with operations and activities in 13 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, 2024, we employed approximately 10,000 people worldwide and had total assets of $95 billion.
Current wording
ConocoPhillips is one of the world’s leading E&P companies based on production and reserves, with operations and activities in 13 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 June 30, 2024, we employed approximately 10,200 people worldwide and had total assets of $96 billion.
Previous wording
The macro-environment of the global energy industry, including the energy transition, continues to evolve. We believe ConocoPhillips will continue to play an essential role by executing on three objectives: responsibly meeting energy transition pathway demand, delivering competitive returns on and of capital and focusing on achieving our net-zero operational emissions ambition. We call this our Triple Mandate, and it represents our commitment to create long-term value for our stakeholders.
Current wording
The macro-environment of the global energy industry, including the energy transition, continues to evolve. We believe ConocoPhillips will continue to play an essential role by executing on three objectives: responsibly meeting energy transition pathway demand, delivering competitive returns on and of capital and progressing toward our net-zero operational emissions ambition. We call this our Triple Mandate, and it represents our commitment to create long-term value for our stakeholders.
Previous wording
In May, we reconfirmed our 2024 planned return of capital to shareholders of at least $9 billion through our three-tier return of capital framework. We also declared a second quarter ordinary dividend of $0.58 per share and a VROC payment of $0.20 per share.
Current wording
In May, we announced plans to increase our quarterly ordinary dividend from $0.58 per share to $0.78 per share starting in the fourth quarter, representing a 34 percent increase, which will incorporate the current VROC of $0.20 per share into the ordinary dividend. In August, we declared a third-quarter ordinary dividend of $0.58 per share and a VROC payment of $0.20 per share. In August, we also reconfirmed our 2024 planned return of capital to shareholders of at least $9 billion.
Previous wording
Operationally, we remain focused on safely executing the business while also progressing key strategic initiatives. At Willow, project activity continued to ramp up during our first major winter construction season following FID late last year. In the Lower 48, we continued to execute our program, focusing on operating and capital efficiencies. Internationally, after reaching first production in projects in Canada, Norway and China at the end of 2023, we see production growth as those projects continued to ramp up through additional wells online. Also in March 2024, we received a license extension until 2045 on the partner-operated Heidrun field in Norway.
Current wording
Operationally, we remain focused on safely executing the business while also progressing key strategic initiatives. At Willow, we successfully completed our first major winter construction season. Internationally, we continue to see production growth through project ramp up and new wells online in projects that reached first production at the end of 2023. In Norway, we reached first production at Eldfisk North ahead of schedule, and in China, we celebrated the one thousandth Penglai cargo lift.
Previous wording
Production was 1,902 MBOED in the first quarter of 2024, an increase of 110 MBOED from the same period a year ago. After adjusting for impacts from closed acquisitions and dispositions, first-quarter 2024 production increased by 43 MBOED or two percent from the same period a year ago.
Current wording
Production was 1,945 MBOED in the second quarter of 2024, an increase of 140 MBOED from the same period a year ago. After adjusting for impacts from closed acquisitions and dispositions, second-quarter 2024 production increased by 76 MBOED or four percent from the same period a year ago.
Previous wording
First-quarter 2024 production resulted in $5.0 billion of cash provided by operating activities. We also returned $1.3 billion to shareholders through share repurchases and $0.9 billion through our ordinary dividend and a VROC. We ended the quarter with cash, cash equivalents, restricted cash and short-term investments totaling $6.3 billion and long-term investments in debt securities of $1.1 billion.
Current wording
Second-quarter 2024 production resulted in $4.9 billion of cash provided by operating activities. We returned $1.0 billion to shareholders through share repurchases and $0.9 billion through our ordinary dividend and a VROC. We ended the quarter with cash, cash equivalents, restricted cash and short-term investments totaling $6.3 billion and long-term investments in debt securities of $1.0 billion.
Previous wording
Also in the first quarter of 2024, 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, where our production has access to both domestic and export markets.
Current wording
Also in the second quarter of 2024, we re-invested $3.0 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, where our production has access to both domestic and export markets.
Previous wording
Brent crude oil prices averaged $83.24 per barrel in the first quarter of 2024, an increase of 2 percent compared with $81.27 per barrel in the first quarter of 2023. WTI at Cushing crude oil prices averaged $76.96 per barrel in the first quarter of 2024, an increase of 1 percent compared with $76.13 per barrel in the first quarter of 2023. Oil prices in the first quarter of 2024 were supported by global oil demand growth, voluntary production cuts by OPEC Plus members and geopolitical risks impacting trade flows.
Current wording
Brent crude oil prices averaged $84.94 per barrel in the second quarter of 2024, an increase of 8 percent compared with $78.39 per barrel in the second quarter of 2023. WTI at Cushing crude oil prices averaged $80.57 per barrel in the second quarter of 2024, an increase of 9 percent compared with $73.78 per barrel in the second quarter of 2023. Oil prices in the second quarter of 2024 were supported by global oil demand growth and continued voluntary production cuts by OPEC Plus members.
Previous wording
Henry Hub natural gas prices averaged $2.25 per MMBTU in the first quarter of 2024, a decrease of 35 percent compared with $3.44 per MMBTU in the first quarter of 2023. Henry Hub prices decreased due to mild winter weather resulting in excess North American natural gas storage levels.
Current wording
Henry Hub natural gas prices averaged $1.89 per MMBTU in the second quarter of 2024, a decrease of 10 percent compared with $2.09 per MMBTU in the second quarter of 2023. Henry Hub prices decreased due to mild winter weather resulting in excess North American natural gas storage levels.
Previous wording
Our realized bitumen price averaged $44.30 per barrel in the first quarter of 2024, an increase of 50 percent compared with $29.49 per barrel in the first quarter of 2023. The increase in the first quarter of 2024 was driven by narrowing WCS differentials as a result of improving heavy oil demand in Asia and a more favorable sales mix with a lower proportion sold by rail. We continue to optimize bitumen price realizations through diluent recovery unit operating improvements as well as blending and transportation strategies.
Current wording
Our realized bitumen price averaged $54.59 per barrel in the second quarter of 2024, an increase of 33 percent compared with $41.01 per barrel in the second quarter of 2023. The increase in the second quarter of 2024 was driven by strengthening WTI, narrowing WCS differentials with new heavy oil egress via the Trans Mountain pipeline expansion and an improving sales mix with a lower allocation to rail.
Previous wording
For the first quarter of 2024, our total average realized price was $56.60 per BOE compared with $60.86 per BOE in the first quarter of 2023.
Current wording
For the second quarter of 2024, our total average realized price was $56.56 per BOE compared with $54.50 per BOE in the second quarter of 2023.
Previous wording
Significant items during the first quarter of 2024 and recent announcements included the following:
Current wording
Significant items during the second quarter of 2024 and recent announcements included the following:
Previous wording
•Distributed $2.2 billion to shareholders through a three-tier framework, including $1.3 billion through share repurchases and $0.9 billion through the ordinary dividend and VROC;
Current wording
•Distributed $1.9 billion to shareholders, including $1.0 billion through share repurchases and $0.9 billion through the ordinary dividend and VROC; and
Previous wording
•Ended the quarter with cash, cash equivalents, restricted cash and short-term investments of $6.3 billion and long-term investments in debt securities of $1.1 billion.
Current wording
•Ended the quarter with cash, cash equivalents, restricted cash and short-term investments of $6.3 billion and long-term investments in debt securities of $1.0 billion.
Previous wording
Second quarter 2024 production is expected to be 1.91 to 1.95 MMBOED.
Current wording
Third-quarter 2024 production is expected to be 1.87 to 1.91 MMBOED, inclusive of approximately 90 MBOED of turnaround impacts in Canada, Lower 48, Alaska, Norway, Malaysia and Qatar. Full-year production is expected to be approximately 1.93 to 1.94 MMBOED, as compared with prior guidance of 1.91 to 1.95 MMBOED, reflecting strong second-quarter results.
Previous wording
Unless otherwise indicated, discussion of consolidated results for the three-month period ended March 31, 2024, is based on a comparison with the corresponding period of 2023.
Current wording
Unless otherwise indicated, discussion of consolidated results for the three- and six-month periods ended June 30, 2024, is based on a comparison with the corresponding period of 2023.
Previous wording
•Our Surmont acquisition, which closed in October 2023.
Current wording
•Our Surmont acquisition, which closed in October 2023. See Note 3.
Previous wording
After adjusting for impacts from closed acquisitions and dispositions, first-quarter 2024 production increased by 43 MBOED or two percent from the same period a year ago.
Current wording
After adjusting for impacts from closed acquisitions and dispositions, second-quarter 2024 production increased by 76 MBOED or four percent from the same period a year ago.
Previous wording
Equity in earnings of affiliates decreased $78 million, due to lower earnings driven by lower LNG prices.
Current wording
Equity in earnings of affiliates for the six-month period of 2024 decreased $87 million due to lower earnings primarily driven by lower LNG prices.
Previous wording
Purchased commodities decreased $804 million, primarily due to lower gas prices partially offset by higher purchased volumes across all commodities.
Current wording
Purchased commodities for the three- and six-month periods of 2024 increased $242 million and decreased $562 million, respectively. The second quarter of 2024 increase was driven by higher purchased volumes across all commodities and higher crude prices, partially offset by lower natural gas and power prices. The six-month period of 2024 decrease was driven by lower natural gas and power prices, partially offset by higher crude prices and higher purchased volumes across all commodities.
Previous wording
Production and operating expenses increased $236 million, due to higher production volumes resulting from our acquisition of additional working interest in Surmont in our Canada segment in addition to higher expenses in our Lower 48 and Alaska segments due to higher lease operating expenses and well work activities of approximately $55 million and higher transportation related charges of approximately $44 million. See Note 3.
Current wording
Production and operating expenses for the three- and six-month periods of 2024 increased $278 million and $514 million, respectively, due to higher lease operating expenses, transportation related costs and well work activities in our Lower 48 and Alaska segments in addition to higher production volumes primarily in our Canada segment.
Previous wording
Unless otherwise indicated, discussion of segment results for the three-month period ended March 31, 2024, is based on a comparison with the corresponding period of 2023 and are shown after-tax.
Current wording
Unless otherwise indicated, discussion of segment results for the three- and six-month periods ended June 30, 2024, is based on a comparison with the corresponding period of 2023 and are shown after-tax.
Previous wording
The Alaska segment primarily explores for, produces, transports and markets crude oil, NGLs and natural gas. As of March 31, 2024, Alaska contributed 15 percent of our consolidated liquids production and two percent of our consolidated natural gas production.
Current wording
The Alaska segment primarily explores for, produces, transports and markets crude oil, NGLs and natural gas. As of June 30, 2024, Alaska contributed 14 percent of our consolidated liquids production and two percent of our consolidated natural gas production.
Previous wording
•Higher DD&A expenses due to higher rates primarily as a result of year-end downward reserve revisions.
Current wording
Earnings in the six-month period of 2024 included higher sales revenues resulting from higher realized prices of $152 million, partially offset by lower volumes of $55 million. Earnings decreases in the six-month period of 2024 included higher production and operating expenses of $51 million, driven by higher well work activity and higher transportation related costs, higher DD&A expenses of $86 million due to higher rates as a result of year-end downward reserve revisions and higher impairments of $24 million due to a project cancellation.
Previous wording
Average production decreased 3 MBOED in the first quarter of 2024. Decreases to production were primarily due to normal field decline.
Current wording
Average production decreased 8 MBOED and 5 MBOED in the three- and six-month periods of 2024, respectively. Decreases to production were primarily due to normal field decline and higher planned downtime related to turnaround activity in the second quarter of 2024.
Previous wording
Production decreases were partly offset by new wells online and improved performance at our Western North Slope and Greater Kuparuk Area assets.
Current wording
Production decreases were partly offset by new wells online and improved performance.
Previous wording
The Lower 48 segment consists of operations located in the U.S. Lower 48 states, as well as producing properties in the Gulf of Mexico. As of March 31, 2024, the Lower 48 contributed 60 percent of our consolidated liquids production and 73 percent of our consolidated natural gas production.
Current wording
The Lower 48 segment consists of operations located in the U.S. Lower 48 states, as well as producing properties in the Gulf of Mexico. As of June 30, 2024, the Lower 48 contributed 61 percent of our consolidated liquids production and 74 percent of our consolidated natural gas production.
Previous wording
Average production increased 10 MBOED in the first quarter of 2024. Increases to production were primarily due to new wells online from our development programs in the Delaware Basin, Eagle Ford, Midland Basin and Bakken.
Current wording
Average production increased 42 MBOED and 26 MBOED in the three- and six-month periods of 2024, respectively. Increases to production were primarily due to new wells online from our development programs in the Delaware Basin, Eagle Ford, Midland Basin and Bakken.
Previous wording
•New wells online in the Montney and Surmont.
Current wording
Average production increased 91 MBOED and 86 MBOED in the three- and six-month periods of 2024, respectively. Increases to production resulted from our increased working interest in Surmont as well as new wells online in the Montney and Surmont. See Note 3.
Previous wording
Average consolidated production increased 4 MBOED in the first quarter of 2024. Increases to production were primarily due to new wells online and improved performance in both Norway and Libya.
Current wording
Average consolidated production increased 12 MBOED and 7 MBOED in the three- and six-month periods of 2024, respectively. Increases to production were primarily due to new wells online and improved performance in both Norway and Libya.
Previous wording
In the first quarter of 2024, we charged $18 million before-tax as dry hole expense for the Busta suspended discovery well on license PL782S that was drilled in 2019.
Current wording
In the second quarter of 2024, we charged $22 million before-tax as dry hole expenses primarily for two partner operated exploration wells in the Alvheim area in the Norwegian sector of the North Sea. Additionally, in the first quarter of 2024, we charged $18 million before-tax as dry hole expense for the Busta suspended discovery well on license PL782S that was drilled in 2019.
Previous wording
The Asia Pacific segment has operations in China, Malaysia, Australia and commercial operations in China, Singapore and Japan. As of March 31, 2024, Asia Pacific contributed four percent of our consolidated liquids production and three percent of our consolidated natural gas production.
Current wording
The Asia Pacific segment has operations in China, Malaysia, Australia and commercial operations in China, Singapore and Japan. As of June 30, 2024, Asia Pacific contributed four percent of our consolidated liquids production and two percent of our consolidated natural gas production.
Previous wording
Offsets to the earnings decreases were primarily driven by a $76 million tax benefit associated with a deepwater investment tax incentive for Malaysia Blocks J and G. See Note 19.
Current wording
Earnings in the six-month period of 2024 included higher sales revenues resulting from higher realized prices of $43 million. Earnings increases in the six-month period of 2024 included a $76 million tax benefit associated with a deepwater investment tax incentive for Malaysia Blocks J & G. Offsetting these increases were lower earnings from equity affiliates of $87 million, primarily due to lower LNG sales prices. See Note 19.
Previous wording
Corporate G&A expenses include compensation programs and staff costs. Corporate G&A expenses increased $15 million in the first quarter of 2024, primarily due to mark-to-market adjustments associated with certain compensation programs.
Current wording
Corporate G&A expenses include compensation programs and staff costs. Corporate G&A expenses decreased in both the three- and six-month periods of 2024 due to mark to market adjustments associated with certain compensation programs.
Previous wording
Technology includes our investments in low-carbon and other new technologies or businesses and licensing revenues. Other new technologies or businesses and licensing activities are focused on both conventional and tight oil reservoirs, shale gas, oil sands, enhanced oil recovery, as well as LNG.
Current wording
Technology includes our investments in low-carbon and other new technologies or businesses and licensing revenues. Other new technologies or businesses and licensing activities are focused on both conventional and tight oil reservoirs, shale gas, oil sands, enhanced oil recovery, as well as LNG. Earnings in Technology for both the three- and six-month periods of 2024 decreased due to increased costs in low-carbon and other new technologies and lower licensing revenues.
Previous wording
Other income (expense) or “Other” includes certain consolidating tax-related items, foreign currency transaction gains and losses, environmental costs associated with sites no longer in operation, other costs not directly associated with an operating segment, gains/losses on the early retirement of debt, holding gains or losses on equity securities and pension settlement expense. In the first quarter of 2024, “Other” improved $119 million primarily due to the absence of a first-quarter 2023 consolidating tax adjustment as well as higher tax benefits related to stock compensation in the first quarter of 2024.
Current wording
Other income (expense) or “Other” includes certain consolidating tax-related items, foreign currency transaction gains and losses, environmental costs associated with sites no longer in operation, other costs not directly associated with an operating segment, gains/losses on the early retirement of debt, holding gains or losses on equity securities and pension settlement expense. “Other” decreased in both the three- and six-month periods of 2024 primarily due to the absence of a 2023 consolidating tax adjustment, absence of a 2023 gain on the early retirement of debt, and foreign currency exchange impacts.
Previous wording
To meet our short-term and long-term liquidity requirements, we look to a variety of funding sources, including cash generated from operating activities, our commercial paper and credit facility programs, and our ability to sell securities using our shelf registration statement. During the first three months of 2024, the primary uses of our available cash were $2.9 billion to support our ongoing capital expenditures and investments program, $1.3 billion to repurchase common stock, $0.9 billion to pay the ordinary dividend and VROC, and $0.5 billion to retire debt at maturity.
Current wording
To meet our short-term and long-term liquidity requirements, we look to a variety of funding sources, including cash generated from operating activities, our commercial paper and credit facility programs, and our ability to sell securities using our shelf registration statement. During the first six months of 2024, the primary uses of our available cash were $5.9 billion to support our ongoing capital expenditures and investments program, $2.3 billion to repurchase common stock, $1.8 billion to pay the ordinary dividend and VROC, $0.6 billion to retire debt at maturity and $0.8 billion net purchases of investments.
Previous wording
At March 31, 2024, we had total liquidity of $11.6 billion, comprised of cash and cash equivalents of $5.6 billion, short-term investments of $0.5 billion, and available borrowing capacity under our credit facility of $5.5 billion. In addition, we have $1.1 billion of long-term investments in debt securities. We believe current cash balances and cash generated by operating activities, together with access to external sources of funds as described below in the “Significant Changes in Capital” section, will be sufficient to meet our funding requirements in the near- and long-term, including our capital spending program, acquisitions, dividend payments and debt obligations.
Current wording
At June 30, 2024, we had total liquidity of $11.5 billion, comprised of cash and cash equivalents of $4.3 billion, short-term investments of $1.7 billion and available borrowing capacity under our credit facility of $5.5 billion. In addition, we have $1.0 billion of long-term investments in debt securities. We believe current cash balances and cash generated by operating activities, together with access to external sources of funds as described below in the “Significant Changes in Capital” section, will be sufficient to meet our funding requirements in the near- and long-term, including our capital spending program, acquisitions, dividend payments and debt obligations.
Previous wording
Cash provided by operating activities was $5.0 billion for the first three months of 2024, compared with $5.4 billion for the corresponding period of 2023. The decrease is primarily due to lower realized natural gas prices, partially offset by higher bitumen prices and higher production volumes.
Current wording
Cash provided by operating activities was $9.9 billion for the first six months of 2024, compared with $9.3 billion for the corresponding period of 2023. The increase is primarily due to changes in operational working capital driven by lower Norway tax payments, higher production from the Surmont 50 percent working interest acquired in the fourth quarter of 2023, higher realized crude and bitumen prices, partly offset by lower realized gas and LNG prices and higher operating costs.
Previous wording
For the first three months of 2024, we invested $2.9 billion in capital expenditures and investments. Our 2024 operating plan capital expenditures are currently expected to be between $11.0 billion to $11.5 billion. Our 2023 capital expenditures and investments were $11.2 billion. See the “Capital Expenditures and Investments” section.
Current wording
For the first six months of 2024, we invested $5.9 billion in capital expenditures and investments. Our 2024 operating plan capital expenditures are currently expected to be approximately $11.5 billion. Our 2023 capital expenditures and investments were $11.2 billion. See the “Capital Expenditures and Investments” section.
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Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
•Higher sales volumes primarily related to our Surmont acquisition, which closed in October 2023. See Note 3.
Previous report — wording carried elsewhere
Production decreases were partly offset by Bohai Bay development activity in China.
Previous report — wording carried elsewhere
In May 2024, we declared an ordinary dividend of $0.58 per share and a VROC payment of $0.20 per share, payable June 3, 2024, to shareholders of record on May 13, 2024.