ConocoPhillips Market Update Reaffirms Commitment to Disciplined, Returns-Focused Strategy with Compelling 2022-2031 Plan

Company Provides Concho Transaction Update; Increases 2021 Share Repurchases by $1 Billion; Reduces 2021 Capital and Adjusted Operating Cost Guidance

ConocoPhillips (NYSE: COP) will host a market update today to reaffirm its commitment to the disciplined, returns-focused strategy it launched in 2016. The company will outline details of a compelling 2022-2031 operating and financial plan that reflects numerous transformational activities undertaken over the past 18 months, most notably the acquisition of Concho.

“We’re looking forward to providing today’s market update, which comes at a defining moment for our sector,” said Ryan Lance, chairman and chief executive officer. “We believe we’re entering a constructive environment for the business, but we also recognize that we’re in a period of evolving energy transition. ConocoPhillips is meeting this moment with a very compelling plan that is resilient and durable, but also flexible. We can and will adapt as the future plays out, all while remaining focused on delivering superior returns to shareholders through cycles. We don’t believe any other company in our E&P sector offers a more investable plan for this vital business.”

Today’s market update includes the following highlights:

• Increasing anticipated Concho transaction-related synergies and savings to $1 billion annually;
• Reducing 2021 capital expenditures and adjusted operating cost guidance by $200 million and $100 million, respectively, due to stronger-than-projected business execution;
• Increasing 2021 planned share repurchases by $1 billion, bringing total planned distributions for the year to approximately $6 billion, or 7% of current market capitalization;
• Expected cash from operations of ~$145 billion and free cash flow of ~$70 billion over the 10-year plan period at $50 per barrel WTI based on 2020 real prices, escalating at 2% annually;
• Capital expenditures expected to average approximately $7 billion annually, resulting in approximately 3% compounded annual production growth at an average reinvestment rate of ~50%;
• Over $65 billion in estimated shareholder returns of capital across the plan period, fully funded from cash from operations;
• Return on capital employed projected to grow 1 to 2 percentage points annually, with balance sheet strength further improving throughout the plan period; and
• Progress on the company’s ambition to become net-zero for operational (Scope 1 and 2) emissions by 2050.

Lance continued, “We have embraced a new imperative for the business that we call the Triple Mandate. We want to play a valued role in whatever pathway the energy transition takes by investing in the lowest cost of supply barrels, delivering competitive returns of and on capital, and achieving our net-zero emissions ambition. Since 2016, we’ve been on a continuous path to be the most relevant, sustainable E&P company in the business. Today’s strong 10-year plan takes another step forward in that direction.”

The ConocoPhillips market update will begin at 9:00 a.m. Central time and is expected to be roughly two hours in duration, including a question-and-answer session. A link to the live webcast and slide deck will be available on the ConocoPhillips Investor Relations website, www.conocophillips.com/investor, roughly 15 minutes prior to the start of the webcast. The event will also be archived and available for replay later in the day, with a transcript posted shortly afterward.

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About ConocoPhillips

Headquartered in Houston, Texas, ConocoPhillips had operations and activities in 15 countries, $84 billion of total assets, and approximately 10,300 employees at March 31, 2021. Production excluding Libya averaged 1,488 MBOED for the three months ended March 31, 2021, and proved reserves were 4.5 BBOE as of Dec. 31, 2020. For more information, go to www.conocophillips.com.

CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This news release contains forward-looking statements as defined under the federal securities laws. Forward-looking statements relate to future events, plans and anticipated results of operations, business strategies, and other aspects of our operations or operating results. Graphics that project into a future date constitute forward-looking statements. Also, words and phrases such as “anticipate,” “estimate,” “believe,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and other similar words can be used to identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. Where, in any forward-looking statement, the company expresses an expectation or belief as to future results, such expectation or belief is believed to be reasonable at the time such forward-looking statement is made based on management’s good faith plans and objectives under the following assumptions: the phased conversion of acquired volumes from 2-stream to 3-stream accounting beginning in 2022; exclusion of Libya and the Willow project in Alaska in production and capital forecasts, as well as associated metrics; inclusion of resources associated with Libya and the Willow project in total resources; an oil price of $50/BBL West Texas Intermediate in 2020 dollars, escalating at two percent annually; an oil price of $55/BBL Brent in 2020 dollars, escalating at two percent annually; a gas price of approximately $3/MMBTU Henry Hub in 2020 dollars increasing in real terms towards a price of approximately $3.25 by 2031, escalating at two percent annually; cost and capital escalation in line with price escalation; and inclusion of carbon tax in the cash flow forecasts for assets where a tax is currently assessed. If no carbon tax exists for the asset, it is not included in the cash flow forecasts. These statements are not guarantees of future performance and involve certain risks and uncertainties and are subject to change as management is continually assessing factors beyond our control that may or may not be currently known. Given the foregoing and the extended time horizon of this presentation, actual outcomes and results will likely differ from what is expressed or forecast in the forward-looking statements, and such differences may be material. Factors that could cause actual results or events to differ materially from what is presented include the impact of public health crises, including pandemics (such as COVID-19) and epidemics and any related company or government policies or actions; global and regional changes in the demand, supply, prices, differentials or other market conditions affecting oil and gas, including changes resulting from a public health crisis or from the imposition or lifting of crude oil production quotas or other actions that might be imposed by OPEC and other producing countries and the resulting company or third-party actions in response to such changes; changes in commodity prices, including a prolonged decline in these prices relative to historical or future expected levels; changes in expected levels of oil and gas reserves or production; potential failures or delays in achieving expected reserve or production levels from existing and future oil and gas developments, including due to operating hazards, drilling risks or unsuccessful exploratory activities; unexpected cost increases or technical difficulties in constructing, maintaining or modifying company facilities; legislative and regulatory initiatives addressing global climate change or other environmental concerns; investment in and development of competing or alternative energy sources; disruptions or interruptions impacting the transportation for our oil and gas production; international monetary conditions and exchange rate fluctuations; changes in international trade relationships, including the imposition of trade restrictions or tariffs on any materials or products (such as aluminum and steel) used in the operation of our business; our ability to collect payments when due under our settlement agreement with PDVSA; our ability to collect payments from the government of Venezuela as ordered by the ICSID; our ability to liquidate the common stock issued to us by Cenovus Energy Inc. at prices we deem acceptable, or at all; our ability to complete our announced or any future dispositions or acquisitions on time, if at all; the possibility that regulatory approvals for our announced or any future dispositions or acquisitions will not be received on a timely basis, if at all, or that such approvals may require modification to the terms of the transactions or our remaining business; business disruptions during or following our announced or any future dispositions or acquisitions, including the diversion of management time and attention; the ability to deploy net proceeds from our announced or any future dispositions in the manner and timeframe we anticipate, if at all; potential liability for remedial actions under existing or future environmental regulations; potential liability resulting from pending or future litigation, including litigation related to our transaction with Concho Resources Inc. (Concho); the impact of competition and consolidation in the oil and gas industry; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets; general domestic and international economic and political conditions; the ability to successfully integrate the operations of Concho with our operations and achieve the anticipated benefits from the transaction; unanticipated difficulties or expenditures relating to the Concho transaction; changes in fiscal regime or tax, environmental and other laws applicable to our business; and disruptions resulting from extraordinary weather events, civil unrest, war, terrorism or a cyber attack; and other economic, business, competitive and/or regulatory factors affecting our business generally as set forth in our filings with the Securities and Exchange Commission. We assume no duty to update these statements as of any future date and neither future distribution of this material nor the continued availability of this material in archive form on our website should be deemed to constitute an update or re-affirmation of these figures as of any future date. Any future update of these figures will be provided only through a public disclosure indicating that fact.

Cautionary Note to U.S. Investors – The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves. We may use the term “resource” in this news release that the SEC’s guidelines prohibit us from including in filings with the SEC. U.S. investors are urged to consider closely the oil and gas disclosures in our Form 10-K and other reports and filings with the SEC. Copies are available from the SEC and from the ConocoPhillips website.

Use of Non-GAAP Financial Information – This news release contains certain financial measures that are not prepared in accordance with GAAP, including operating costs, adjusted operating costs, cash from operations, free cash flow and return on capital employed (ROCE).

The company believes that the non-GAAP measures operating costs and adjusted operating costs are useful to investors to help facilitate comparisons of the company’s operating performance associated with the company’s core business operations across periods on a consistent basis and with the performance and cost structures of peer companies by excluding items that do not directly relate to the company’s core business operations. Operating costs is defined by the company as the sum of production and operating expenses, selling, general and administrative expenses, exploration general and administrative expenses, geological and geophysical, lease rentals and other exploration expenses. Adjusted operating costs is defined as the company’s operating costs further adjusted to exclude expenses that do not directly relate to the company’s core business operations and are included as adjustments to arrive at adjusted earnings to the extent those adjustments impact operating costs. The company further believes that the non-GAAP measure cash from operations is useful to investors to help understand changes in cash provided by operating activities excluding the timing effects associated with operating working capital changes across periods on a consistent basis and with the performance of peer companies. The company believes free cash flow is useful to investors in understanding how existing cash from operations is utilized as a source for sustaining our current capital plan and future development growth. Free Cash Flow is defined as cash from operations net of capital expenditures and investments. Free cash flow is not a measure of cash available for discretionary expenditures since the company has certain non-discretionary obligations such as debt service that are not deducted from the measure. The company believes that ROCE is a good indicator of long-term company and management performance. ROCE is a measure of the profitability of ConocoPhillips’ capital employed in its business. ConocoPhillips calculates ROCE as a ratio, the numerator of which is historically reported or forecasted net income plus after-tax interest expense and the denominator of which is average total equity plus total debt. The company believes that the above-mentioned non-GAAP measures, when viewed in combination with the company’s results prepared in accordance with GAAP, provides a more complete understanding of the factors and trends affecting the company’s business and performance. The company’s Board of Directors and management also use these non-GAAP measures to analyze the company’s operating performance across periods when overseeing and managing the company’s business.

Each of the non-GAAP measures included in this news release has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of the company’s results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, the company’s presentation of non-GAAP measures in this news release and the accompanying supplemental financial information may not be comparable to similarly titled measures disclosed by other companies, including companies in our industry. The company may also change the calculation of any of the non-GAAP measures included in this news release and the accompanying supplemental financial information from time to time in light of its then existing operations to include other adjustments that may impact its operations.

Any non-GAAP measures related to current period included herein will be accompanied by a reconciliation to the nearest corresponding GAAP measure at the end of this news release. For forward-looking non-GAAP measures, we are unable to provide a reconciliation to the most comparable GAAP financial measures because the information needed to reconcile these measures is dependent on future events, many of which are outside management’s control as described above. Additionally, estimating such GAAP measures and providing a meaningful reconciliation consistent with our accounting policies for future periods is extremely difficult and requires a level of precision that is unavailable for these future periods and cannot be accomplished without unreasonable effort. Forward looking non-GAAP measures are estimated consistent with the relevant definitions and assumptions.

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