CONOCOPHILLIPS
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
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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, 2026 · Filed Aug 6, 2026
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 2026-03-31; filed 2026-04-30.
0001163165-26-000018
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations“Capital Expenditures and Investments”Current report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001163165-26-000032
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations“Capital Expenditures and Investments”The 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 189 previous paragraphs and 202 current paragraphs.
110 unchanged; 56 reworded; 35 added; 21 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 53 previous and 57 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 (35)
Current report
In the third quarter of 2025, we announced a total disposition target of $5 billion by year-end 2026. In the second quarter of 2026, we entered into agreements to sell our interests in certain noncore assets in the Lower 48 segment for approximately $1.7 billion, subject to customary closing adjustments. These transactions closed in the third quarter of 2026. These transactions, coupled with our 2025 dispositions, achieved the $5 billion disposition target. See Note 3.
Current report
Operationally, we remain focused on safely executing the business while also progressing key strategic initiatives. During the second quarter of 2026, we entered into certain commercial LNG agreements, expanding our commercial offtake from 10.2 MTPA to 12.2 MTPA.
Current report
In June 2026, we and a third-party operator jointly signed an agreement with the Syrian government and Syrian Petroleum Company to increase production from, and further develop, certain gas fields in Syria, from which we do not expect material impacts in 2026.
Current report
In July 2026, we entered into an agreement with a wholly owned subsidiary of BP p.l.c. (bp) to acquire a 42 percent direct equity holding in a non-operated joint venture, supporting the ongoing redevelopment of four large-scale, currently producing oil fields in the Kirkuk area of northern Iraq. The cash outflow at close is expected to be $0.3 billion to $0.5 billion, including reimbursement of our proportionate share of bp's project costs incurred from the effective date of the agreement through close. In addition, deferred payments of $0.2 billion will be paid no later than three years from the date of close. This transaction is expected to close by the end of 2026, subject to regulatory approvals and other customary closing conditions, with an effective date of July 1, 2026. See Note 3.
Current report
Total realized prices were higher in the second quarter of 2026 compared with the same period of 2025 primarily driven by higher industry prices for oil.
Current report
•Declared third-quarter ordinary dividend of $0.84 per share;
Current report
•Reaffirmed full-year guidance items;
Current report
•Signed agreements to sell noncore Lower 48 assets for $1.7 billion, which closed in July, achieving $5 billion disposition target ahead of schedule;
Current report
•Signed an agreement to acquire a 42% interest in a joint venture in the Kirkuk area of northern Iraq, accessing long-life, conventional redevelopment opportunities at an attractive entry cost and competitive cost of supply; closing expected by year-end 2026;
Current report
•Executed an agreement for re-entry into Syria, leveraging existing infrastructure to restore and increase production at onshore fields;
Current report
•Advanced commercial LNG strategy with additional 2 MTPA of offtake agreements, bringing total LNG offtake to 12 MTPA; and
Current report
Third-quarter 2026 production is expected to be 2.29 to 2.32 MMBOED.
Current report
All full-year guidance items remain unchanged.
Current report
Sales and other operating revenues for the three- and six-month periods ended June 30, 2026, increased $5,157 million and $4,401 million, respectively. Increases for the three- and six-month periods include higher crude and bitumen prices of $3,730 million and $3,988 million, respectively. For the three- and six-month periods, these increases were partly offset by lower volumes of $409 million and $835 million, respectively.
Current report
Alaska reported earnings of $522 million and $816 million in the three- and six-month periods ended June 30, 2026, respectively, compared with earnings of $135 million and $462 million for the same periods of 2025.
Current report
Earnings in the second quarter of 2026 included higher sales revenues resulting from higher realized prices of $480 million. This increase was partly offset by lower produced volumes of $78 million.
Current report
Average production decreased 20 MBOED and 17 MBOED in the three- and six-month periods ended June 30, 2026, respectively, primarily driven by normal field decline.
Current report
Lower 48 reported earnings of $2,584 million and $3,987 million in the three- and six-month periods ended June 30, 2026, respectively, compared with earnings of $1,399 million and $3,189 million for the same periods of 2025.
Current report
Earnings in the six-month period ended June 30, 2026 included higher sales revenues resulting from higher realized crude prices of $1,868 million. Additional increases to earnings include lower production and operating expenses of $341 million, primarily driven by efficiencies. Decreases to earnings include lower gas prices of $673 million driven by lower gas realizations and lower volumes of $208 million. Additional decreases to earnings include the absence of a gain on a disposition of $242 million, and higher DD&A of $227 million, primarily driven by higher rates, due to higher net book values from the finalized allocations of our Marathon Oil purchase price to specific assets and lower proved developed reserves as of December 31, 2025.
Current report
Assets Held for Sale
Current report
In the second quarter of 2026, we entered into agreements to sell our interests in certain noncore assets in the Lower 48 segment for approximately $1.7 billion, subject to customary closing adjustments. Production from these assets averaged approximately 21 MBOED in 2025. These transactions closed in the third quarter of 2026. See Note 3.
Current report
Canada reported earnings of $320 million and $405 million in the three- and six-month periods ended June 30, 2026, respectively, compared with earnings of $149 million and $405 million for the same periods of 2025.
Current report
Earnings in the second quarter of 2026 included higher sales revenues resulting from higher realized prices of $199 million and timing of sales. This increase was partly offset by lower volumes of $113 million and a pending claim of $58 million.
Current report
Decreases to earnings in the six-month period ended June 30, 2026 included tax impacts of $96 million due to a shift in our mix of income among taxing jurisdictions, lower earnings from equity affiliates of $38 million, primarily driven by lower volumes, and lower volumes of $22 million. The decreases were partly offset by higher realized prices of $140 million.
Current report
The above production increases were partly offset for the three-month period and more than offset for the six-month period by normal field decline.
Current report
Recent and Pending Acquisitions
Current report
In June 2026, we and a third-party operator jointly signed an agreement with the Syrian government and Syrian Petroleum Company to increase production from, and further develop, certain gas fields in Syria, from which we do not expect material impacts in 2026.
Current report
In July 2026, we entered into an agreement with a wholly owned subsidiary of bp to acquire a 42 percent direct equity holding in a non-operated joint venture, supporting the ongoing redevelopment of four large-scale, currently producing oil fields in the Kirkuk area of northern Iraq. The cash outflow at close is expected to be $0.3 billion to $0.5 billion, including reimbursement of our proportionate share of bp's project costs incurred from the effective date of the agreement through close. In addition, deferred payments of $0.2 billion will be paid no later than three years from the date of close. This transaction is expected to close by the end of 2026, subject to regulatory approvals and other customary closing conditions, with an effective date of July 1, 2026. See Note 3.
Current report
Asia Pacific reported earnings of $389 million and $684 million in the three- and six-month periods ended June 30, 2026, respectively, compared with earnings of $330 million and $641 million for the same periods of 2025.
Current report
Earnings in the second quarter of 2026 included higher sales revenues resulting from higher realized prices of $160 million. Decreases to earnings include higher taxes other than income taxes of $40 million due to higher crude prices.
Current report
Earnings in the six-month period ended June 30, 2026 included higher sales revenues resulting from higher realized prices of $183 million partly offset by lower volumes of $44 million. Decreases to earnings include lower earnings from equity affiliates of $47 million, primarily due to lower LNG marker prices, and higher taxes other than income taxes of $46 million due to higher crude prices.
Current report
In the second quarter of 2026, we entered into agreements to sell our interests in certain noncore assets in the Lower 48 segment for approximately $1.7 billion, subject to customary closing adjustments. These transactions closed in the third quarter of 2026. See Note 3.
Current report
In July 2026, we entered into an agreement with a wholly owned subsidiary of bp to acquire a 42 percent direct equity holding in a non-operated joint venture, supporting the ongoing redevelopment of four large-scale, currently producing oil fields in the Kirkuk area of northern Iraq. The cash outflow at close is expected to be $0.3 billion to $0.5 billion, including reimbursement of our proportionate share of bp's project costs incurred from the effective date of the agreement through close. In addition, deferred payments of $0.2 billion will be paid no later than three years from the date of close. This transaction is expected to close by the end of 2026, subject to regulatory approvals and other customary closing conditions, with an effective date of July 1, 2026. See Note 3.
Current report
On July 1, 2026, we completed a $600 million remarketing of sub-series 2017D bonds that are part of the $1 billion St. John the Baptist Parish, State of Louisiana—Revenue Refunding Bonds Series 2017. The bonds are subject to an interest rate of 3.0% and a mandatory tender date of July 2, 2029. Subsequent to the mandatory tender date, we will also have the right to remarket these bonds at any time up to the 2037 maturity date. See Note 5.
Current report
In 2026, we increased future contractual purchase obligations related to long-term LNG offtake contracts and vessels, as well as certain other capacity obligations, by approximately $7 billion.
Removed paragraphs (21)
Previous report
Total realized prices were lower in the first quarter of 2026 compared to the same period of 2025 despite increased commodity prices, primarily due to lower realized gas prices in the Permian.
Previous report
•Declared second-quarter ordinary dividend of $0.84 per share;
Previous report
•Updated full-year production and capital guidance, operating cost guidance unchanged;
Previous report
•Conducted successful Willow winter construction season with project achieving 50% completion;
Previous report
•Completed four-well Alaska winter exploration program with evaluation underway and secured high-priority acreage in National Petroleum Reserve in Alaska (NPR-A) lease sale;
Previous report
•Enhanced Lower 48 capital efficiency by more than doubling percentage of 3-mile plus lateral length wells drilled compared with prior year;
Previous report
•Executed LNG tolling agreement for third-party operated gas volumes in Equatorial Guinea, extending life of LNG facility well into the next decade; and
Previous report
Production and Capital
Previous report
For the second quarter, the company is excluding Qatar from production guidance, given uncertainty surrounding the conflict in the Middle East. Second-quarter production is expected to be 2.185 to 2.215 MMBOED.
Previous report
Full-year production is expected to be 2.295 to 2.325 MMBOED. This reflects a 20 MBOED annual adjustment for Qatar, given the exclusion of Qatar production from second-quarter guidance, as well as a 15 MBOED annual royalty rate adjustment at Surmont due to higher oil prices.
Previous report
Capital spending for 2026 is expected to be $12 to $12.5 billion.
Previous report
All other guidance remains unchanged.
Previous report
Sales and other operating revenues for the three-month period of 2026 decreased $756 million. Decreases include lower volumes of $420 million and lower realized natural gas and NGL prices of $537 million. These decreases were partly offset by higher crude and bitumen prices of $243 million.
Previous report
Equity in earnings of affiliates for the three-month period of 2026 decreased $145 million due to lower earnings primarily driven by lower prices and production. There were no impairment indicators identified during the quarter, and we continue to monitor the recoverability of our equity method investments.
Previous report
Alaska reported earnings of $294 million in the first quarter of 2026, compared with earnings of $327 million in the first quarter of 2025.
Previous report
Average production decreased 13 MBOED in the three-month period of 2026 primarily driven by normal field decline.
Previous report
Lower 48 reported earnings of $1,403 million in the first quarter of 2026, compared with earnings of $1,790 million in the first quarter of 2025.
Previous report
Canada reported earnings of $85 million in the first quarter of 2026, compared with earnings of $256 million in the first quarter of 2025.
Previous report
Average consolidated production decreased 19 MBOED in the three-month period of 2026. Decreases to production were due to normal field decline and higher downtime in Libya and Norway.
Previous report
Asia Pacific reported earnings of $295 million in the first quarter of 2026, compared with earnings of $311 million in the first quarter of 2025.
Previous report
Earnings in the first quarter of 2026 included lower earnings from equity affiliates of $35 million, primarily due to lower LNG marker prices. Increases to earnings included lower exploration expenses of $31 million, primarily driven by the absence of dry hole expenses associated with certain suspended wells.
Reworded paragraphs (56)
Previous wording
ConocoPhillips is one of the world’s leading E&P companies based on production and reserves, with operations and activities in 14 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, 2026, we employed approximately 9,700 people worldwide and had total assets of $123 billion.
Current wording
ConocoPhillips is one of the world’s leading E&P companies based on production and reserves, with operations and activities in 15 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, 2026, we employed approximately 9,600 people worldwide and had total assets of $124 billion.
Previous wording
Geopolitical tensions in the Middle East, including the ongoing conflict involving Iran, have increased volatility in global energy markets and may elevate risks to regional operations, infrastructure and shipping routes. We have investments in LNG facilities in Qatar, including one producing asset and two projects under construction. In March 2026, due to the conflict, QatarEnergy constrained LNG production at its major Ras Laffan facilities. Our investments have not been damaged, and there are no indications of impairment. However, further escalation could adversely affect operations, LNG transportation and construction and have broader supply chain impacts. Production from our Qatar investments was approximately four percent of total company production volumes in 2025. The company continues to monitor developments and prioritize the safety of personnel and the integrity of our operations. See Note 3.
Current wording
Geopolitical tensions in the Middle East, including the ongoing conflict involving Iran, have increased volatility in global energy markets and may elevate risks to regional operations, infrastructure and shipping routes. We have investments in LNG facilities in Qatar, including one producing asset and two projects under construction. Our investments have not been damaged, though production remained constrained through the second quarter of 2026, and there are no indications of impairment. However, further escalation could adversely affect operations, LNG transportation and construction and have broader supply chain impacts. Production from our Qatar investments was approximately four percent of total company production volumes in 2025. The company continues to monitor developments and prioritize the safety of personnel and the integrity of our operations. See Note 6.
Previous wording
Production was 2,309 MBOED in the first quarter of 2026, a decrease of 80 MBOED from the same period a year ago. After adjusting for impacts from closed acquisitions and dispositions, first-quarter 2026 production decreased by 14 MBOED or one percent from the same period a year ago.
Current wording
Production was 2,248 MBOED in the second quarter of 2026, a decrease of 143 MBOED from the same period a year ago. After adjusting for impacts from closed acquisitions and dispositions, second-quarter 2026 production decreased by 98 MBOED or four percent from the same period a year ago.
Previous wording
First-quarter 2026 production resulted in $4.3 billion of cash provided by operating activities. We returned $2.0 billion to shareholders, consisting of $1.0 billion through share repurchases and $1.0 billion through our ordinary dividend. We ended the quarter with cash, cash equivalents, restricted cash and short-term investments totaling $6.7 billion and long-term investments in debt securities of $1.2 billion.
Current wording
Second-quarter 2026 production resulted in $7.4 billion of cash provided by operating activities. We returned $3.0 billion to shareholders, consisting of $2.0 billion through share repurchases and $1.0 billion through our ordinary dividend. We ended the quarter with cash, cash equivalents, restricted cash and short-term investments totaling $8.1 billion and long-term investments in debt securities of $1.2 billion.
Previous wording
Also in the first quarter of 2026, 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.
Current wording
Also in the second quarter of 2026, we reinvested $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.
Previous wording
In April 2026, we declared a second-quarter ordinary dividend of $0.84 per share.
Current wording
In August 2026, we declared a third-quarter ordinary dividend of $0.84 per share.
Previous wording
The following table presents average prices for the first quarter of 2026 compared to the first quarter of 2025.
Current wording
The following table presents average prices for the second quarter of 2026 compared to the second quarter of 2025.
Previous wording
Oil and bitumen prices were higher in the first quarter of 2026 compared to the same period of 2025 as Middle East supply disruptions corresponded to higher market prices.
Current wording
Oil and bitumen prices were higher in the second quarter of 2026 compared with the same period of 2025 as Middle East supply disruptions that began in the first quarter of 2026 persisted through the second quarter.
Previous wording
U.S. Henry Hub prices improved due to Winter Storm Fern impacts on market supplies. The risk of volatility in regional markers remains throughout 2026.
Current wording
U.S. Henry Hub prices decreased relative to the first quarter of 2026 due to seasonally softer demand coupled with rising domestic production and above normal inventory levels. Prices decreased relative to the same quarter last year as rising domestic production contributed to a well-supplied market. The risk of volatility in regional markers remains throughout 2026.
Previous wording
•Reported first-quarter 2026 earnings per share of $1.78;
Current wording
•Reported second-quarter 2026 earnings per share of $3.23;
Previous wording
•Generated cash provided by operating activities of $4.3 billion;
Current wording
•Generated cash provided by operating activities of $7.4 billion;
Previous wording
•Distributed$2.0 billion to shareholders, including $1.0 billion through share repurchases and $1.0 billion through the ordinary dividend;
Current wording
•Distributed$3.0 billion to shareholders, including $2.0 billion through share repurchases and $1.0 billion through the ordinary dividend;
Previous wording
•Delivered total company and Lower 48 production of 2,309 MBOED and 1,453 MBOED, respectively;
Current wording
•Delivered total company and Lower 48 production of 2,248 MBOED and 1,479 MBOED, respectively;
Previous wording
•Ended the quarter with cash, cash equivalents, restricted cash and short-term investments of $6.7 billion and long-term investments of $1.2 billion.
Current wording
•Ended the quarter with cash, cash equivalents and restricted cash of $7.0 billion, short-term investments of $1.1 billion and long-term investments of $1.2 billion.
Previous wording
Unless otherwise indicated, discussion of consolidated results for the three-month period ended March 31, 2026, is based on a comparison with the corresponding period of 2025. Throughout the document, certain totals and percentages may differ from the precise sum of the underlying components due to rounding.
Current wording
Unless otherwise indicated, discussion of consolidated results for the three- and six-month periods ended June 30, 2026, is based on a comparison with the corresponding period of 2025.
Previous wording
Total production in the first quarter of 2026 was 2,309 MBOED, a decrease of 80 MBOED or three percent from the same period a year ago. Production decreases were primarily driven by normal field decline.
Current wording
Total production in the second quarter of 2026 was 2,248 MBOED, a decrease of 143 MBOED or six percent from the same period a year ago. Total production in the six-month period ended June 30, 2026, was 2,278 MBOED, a decrease of 113 MBOED or five percent from the same period a year ago. Production decreases were primarily driven by normal field decline.
Previous wording
After adjusting for impacts from closed acquisitions and dispositions, first-quarter 2026 production decreased by 14 MBOED or one percent from the same period a year ago.
Current wording
After adjusting for impacts from closed acquisitions and dispositions, second-quarter 2026 production decreased by 98 MBOED or four percent from the same period a year ago. After adjusting for closed acquisitions and dispositions, production in the six-month period ended June 30, 2026, decreased by 57 MBOED or four percent.
Previous wording
Purchased commodities for the three-month period of 2026 increased $95 million, primarily due to higher power prices, higher power and gas volumes and higher LNG activity. These increases were partly offset by lower derivatives impacts and crude volumes.
Current wording
Purchased commodities for the three- and six-month periods ended June 30, 2026, increased $1,627 million and $1,722 million, respectively, primarily due to higher crude prices partly offset by lower gas prices.
Previous wording
Production and operating expensesfor the three-month period of 2026 decreased $230 million, primarily due to lower activity levels and increased efficiencies.
Current wording
Production and operating expensesfor the three- and six-month periods ended June 30, 2026, decreased $141 million and $371 million, respectively, primarily due to increased efficiencies.
Previous wording
DD&A for the three-month period of 2026 increased $160 million, primarily due to higher DD&A rates, driven by higher net book values from the finalized allocations of our Marathon Oil purchase price to specific assets and lower proved developed reserves as of December 31, 2025.
Current wording
DD&A for the three- and six-month periods ended June 30, 2026, increased $145 million and $305 million, respectively, primarily due to higher DD&A rates, driven by higher net book values from the finalized allocations of our Marathon Oil purchase price to specific assets and lower proved developed reserves as of December 31, 2025.
Previous wording
Unless otherwise indicated, discussion of segment results for the three-month period ended March 31, 2026, is based on a comparison with the corresponding period of 2025 and are shown after-tax.
Current wording
Unless otherwise indicated, discussion of segment results for the three- and six-month periods ended June 30, 2026, is based on a comparison with the corresponding period of 2025 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, 2026, Alaska contributed 12 percent of our consolidated liquids production and one 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, 2026, Alaska contributed 11 percent of our consolidated liquids production and one percent of our consolidated natural gas production.
Previous wording
Earnings in the first quarter of 2026 included lower sales revenues resulting from lower produced volumes of $53 million and timing of sales. These decreases were partly offset by higher realized prices of $68 million. Additional decreases to earnings included higher taxes other than income taxes of $67 million, driven by the absence of an impact from the settlement of a contingent matter, and higher exploration expenses of $20 million, primarily driven by increased seismic work. Increases to earnings included lower production and operating expenses of $24 million driven by lower workover activity.
Current wording
Earnings in the six-month period ended June 30, 2026 included higher sales revenues resulting from higher realized prices of $532 million. This increase was partly offset by lower produced volumes of $138 million and higher taxes other than income of $109 million primarily driven by the absence of an impact from the settlement of a contingent matter.
Previous wording
The production decreases were partly offset by new wells online in the second half of 2025.
Current wording
The production decreases were partly offset by new wells online.
Previous wording
The Lower 48 segment consists of operations located in the U.S. Lower 48 states and commercial operations. As of March 31, 2026, the Lower 48 contributed 68 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 and commercial operations. As of June 30, 2026, the Lower 48 contributed 69 percent of our consolidated liquids production and 74 percent of our consolidated natural gas production.
Previous wording
Earnings in the first quarter of 2026 included lower sales revenues resulting from lower overall realized prices of $303 million, driven by lower gas realizations and NGL prices, and lower volumes of $85 million. Additional decreases to earnings include higher DD&A of $115 million, primarily driven by higher rates, due to higher net book values from the finalized allocations of our Marathon Oil purchase price to specific assets, and lower proved developed reserves as of December 31, 2025. Increases to earnings in the first quarter of 2026 included lower production and operating expenses of $186 million, primarily driven by efficiencies and decreased activity.
Current wording
Earnings in the second quarter of 2026 included higher sales revenues resulting from higher realized crude and NGL prices of $1,892 million. Additional increases to earnings include lower production and operating expenses of $155 million primarily driven by efficiencies. Decreases to earnings include lower gas prices of $459 million driven by lower gas realizations and lower volumes of $125 million. Additional decreases to earnings include the absence of a gain on a disposition of $254 million and higher DD&A of $112 million, primarily driven by higher rates, due to higher net book values from the finalized allocations of our Marathon Oil purchase price to specific assets and lower proved developed reserves as of December 31, 2025.
Previous wording
Average production decreased nine MBOED in the three-month period of 2026. Production decreases were primarily driven by normal field decline and dispositions of assets in 2025.
Current wording
Average production decreased 29 MBOED and 19 MBOED in the three- and six-month periods ended June 30, 2026, respectively. Production decreases were primarily driven by normal field decline and dispositions of assets in 2025.
Previous wording
The Canada segment operations include the Surmont oil sands development in Alberta, the Montney unconventional play in British Columbia and commercial operations. As of March 31, 2026, Canada contributed nine percent of our consolidated liquids production and five percent of our consolidated natural gas production.
Current wording
The Canada segment operations include the Surmont oil sands development in Alberta, the Montney unconventional play in British Columbia and commercial operations. As of June 30, 2026, Canada contributed eight percent of our consolidated liquids production and four percent of our consolidated natural gas production.
Previous wording
Earnings in the first quarter of 2026 included higher sales revenues resulting from higher realized prices of $46 million and timing of sales. These increases were partly offset by lower volumes of $78 million and a pending claim of $63 million. Additional decreases to earnings included lower other income of $56 million primarily from a change in the fair value measurement associated with the Surmont contingent consideration arrangement. See Note 8.
Current wording
Earnings in the six-month period ended June 30, 2026 included higher sales revenues resulting from higher realized prices of $254 million and timing of sales. This increase was offset by lower volumes of $187 million and pending claims of $121 million. Additional decreases to earnings included lower other income of $56 million primarily from a change in the fair value measurement associated with the Surmont contingent consideration arrangement. See Note 10.
Previous wording
Average production decreased 20 MBOED in the three-month period of 2026. Decreases to production resulted from higher variable royalties in Surmont following a post-payout event in 2025 and a rate increase due to higher prices, as well as normal field decline. The Surmont royalties are based on a sliding scale ranging from 25 percent to 40 percent, calculated under the oil sands royalty regime as a percentage of gross revenue, net of allowable deductions post-payout, indexed to WTI prices between $55 CAD and $120 CAD.
Current wording
Average production decreased 39 MBOED and 29 MBOED in the three- and six-month periods ended June 30, 2026, respectively. Decreases to production resulted from higher variable royalties in Surmont following a post-payout event in 2025 and a rate increase due to higher prices, as well as normal field decline. The Surmont royalties are based on a sliding scale ranging from 25 percent to 40 percent, calculated under the oil sands royalty regime as a percentage of gross revenue, net of allowable deductions post-payout, indexed to WTI prices between $55 CAD and $120 CAD.
Previous wording
The Europe, Middle East and North Africa segment consists of operations principally located in the Norwegian sector of the North Sea and the Norwegian Sea, Qatar, Libya, Equatorial Guinea and commercial and terminalling operations in the U.K. As of March 31, 2026, our Europe, Middle East and North Africa operations contributed eight percent of our consolidated liquids production and 19 percent of our consolidated natural gas production.
Current wording
The Europe, Middle East and North Africa segment consists of operations principally located in the Norwegian sector of the North Sea and the Norwegian Sea, Qatar, Libya, Equatorial Guinea, Syria and commercial and terminalling operations in the U.K. As of June 30, 2026, our Europe, Middle East and North Africa operations contributed eight percent of our consolidated liquids production and 18 percent of our consolidated natural gas production.
Previous wording
Europe, Middle East and North Africa reported earnings of $265 million in the first quarter of 2026, compared with earnings of $419 million in the first quarter of 2025.
Current wording
Europe, Middle East and North Africa reported earnings of $346 million and $611 million in the three- and six-month periods ended June 30, 2026, respectively, compared with earnings of $237 million and $656 million for the same periods of 2025.
Previous wording
Earnings in the first quarter of 2026 included lower revenues inclusive of lower volumes of $32 million and lower realized prices of $10 million primarily from lower gas prices, partly offset by higher crude prices. Additional decreases to earnings included lower earnings from equity affiliates of $21 million, primarily driven by lower prices and volumes and tax impacts of $60 million due to a shift in our mix of income among taxing jurisdictions.
Current wording
Earnings in the second quarter of 2026 included higher revenues resulting from higher realized prices of $151 million. Decreases to earnings included lower earnings from equity affiliates of $18 million, primarily driven by lower volumes, and tax impacts of $29 million due to a shift in our mix of income among taxing jurisdictions.
Previous wording
Production decreases were partly offset by new wells online in Libya and improved performance in Equatorial Guinea and Norway.
Current wording
Average consolidated production increased seven MBOED and decreased six MBOED in the three- and six-month periods ended June 30, 2026, respectively. Production in the three-month period increased due to the absence of field-wide turnarounds in the Greater Ekofisk Area of Norway. Both periods also benefited from new wells online and improved performance in Equatorial Guinea, Libya and Norway.
Previous wording
We have investments in LNG facilities in Qatar, including one producing asset and two projects under construction. In March 2026, due to the conflict in the Middle East, QatarEnergy constrained LNG production at its major Ras Laffan facilities. Our investments have not been damaged, and there are no indications of impairment. However, further escalation could adversely affect operations, LNG transportation and construction and have broader supply chain impacts. The company continues to monitor developments and prioritize the safety of personnel and the integrity of our operations. See Note 3.
Current wording
We have investments in LNG facilities in Qatar, including one producing asset and two projects under construction. Our investments have not been damaged, though production remained constrained through the second quarter of 2026, and there are no indications of impairment. However, further escalation could adversely affect operations, LNG transportation and construction and have broader supply chain impacts. The company continues to monitor developments and prioritize the safety of personnel and the integrity of our operations. See Note 6.
Previous wording
The Asia Pacific segment has operations in China, Malaysia, Australia and commercial operations in China, Singapore and Japan. As of March 31, 2026, Asia Pacific contributed three 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, 2026, Asia Pacific contributed four percent of our consolidated liquids production and three percent of our consolidated natural gas production.
Previous wording
Average consolidated production decreased five MBOED in the three-month period of 2026. Decreases to production were primarily due to normal field decline.
Current wording
Average consolidated production remained flat in the three-month period and decreased three MBOED in the six-month period ended June 30, 2026. Decreases to production were primarily due to normal field decline.
Previous wording
Production decreases were partly offset by development activity in Bohai Bay in China.
Current wording
Production decreases were offset in the three-month period and partly offset in the six-month period by development activity in Bohai Bay in China.
Previous wording
Net interest expense consists of interest and debt expense, net of interest income and capitalized interest. Net interest expense decreased in the three-month period of 2026 due to higher interest income and higher capitalized interest partly offset by the absence of an impact from the settlement of a contingent matter.
Current wording
Net interest expense consists of interest and debt expense, net of interest income and capitalized interest. Net interest expense decreased in the three- and six-month periods ended June 30, 2026 due to higher interest income and higher capitalized interest.
Previous wording
Corporate G&A expenses include compensation programs and staff costs. Corporate G&A expenses decreased in the three-month period of 2026, primarily due to the absence of transaction and integration expenses associated with our acquisition of Marathon Oil.
Current wording
Corporate G&A expenses include compensation programs and staff costs. Corporate G&A expenses decreased in the three- and six-month periods ended June 30, 2026, primarily due to the absence of transaction and integration expenses associated with our acquisition of Marathon Oil.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The terms “earnings” and “loss” as used in Management’s Discussion and Analysis refer to net income (loss). Throughout this quarterly report on Form 10-Q, certain totals and percentages may differ from the precise sum of the underlying components due to rounding.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The terms “earnings” and “loss” as used in Management’s Discussion and Analysis refer to net income (loss).
Previous report — wording carried elsewhere
In April 2026, we declared an ordinary dividend of $0.84 per share, payable June 1, 2026, to shareholders of record on May 11, 2026.