Conoco Executive: On Track To Spend $5 Billion In Share Buybacks In 1st Half
April 16 2012 - 12:53PM
Dow Jones News
ConocoPhillips (COP) said Monday it is on track to spend $5
billion on share repurchases in the first half of the year and that
it expects to spend the same amount in the second half.
Speaking to analysts in a conference call, ConocoPhillips
incoming Chief Executive Ryan Lance said the company expects to
fund the share buybacks with the proceeds of its previously
announced asset sale, which this year is estimated to be $8 billion
to $10 billion.
Lance, who will assume his new position when the spin-off of
ConocoPhillips' refining arm is completed May 1, said the company
is evaluating the disposition of assets that no longer are
strategic for a stand-alone production company. The executive
didn't specify the assets.
ConocoPhillips is at the end of a three-year restructuring plan
aimed at improving its finances and creating more value for
shareholders. The plan includes a large scale asset sale and the
spin-off of its refining, chemical and pipeline segments into an
independent company, named Phillips 66. ConocoPhillips will become
a pure oil and gas exploration and production firm.
Lance confirmed ConocoPhillips plans to have an annual capital
expenditure budget of about $15 billion through 2016 and compound
annual production growth between 3% and 5% in the same period.
Production growth is expected to be driven by the development of an
oil-sand project in Canada, several shale fields the U.S., offshore
projects in U.K.'s North Sea and Malasia and the Australian Pacific
LNG project in Australia, the company said.
Conoco also expects to grow its cash flow to $22 billion by
2016, up from about $16 billion this year, and it plans to spend
about 20% to 25% of its annual cash flow on dividends.
ConocoPhillips is looking for opportunities to acquire more
shale properties internationally as it believes it can transfer the
knowledge it has acquired developing unconventional fields in the
U.S. overseas, Lance said. Conoco currently has shale assets in
Poland.
Separately, ConocoPhillips also announced Monday the names of
the future board of directors for Phillips 66.
Greg Garland, who previously was named president and chief
executive of the company, will serve as chairman of the board. He
was previously CEO of Chevron Phillips Chemical.
Other directors include: J. Brian Ferguson, who was chairman and
CEO of Eastman Chemical Co. (EMN), and currently serves on the
boards of Owens Corning (OC) and NextEra Energy Inc. (NEE); William
R. Loomis Jr., who has been an independent financial advisor since
2009 and currently serves on the boards of Pacific Capital Bancorp
(PCBC) and Limited Brands Inc. (LTD), and is also a senior advisor
to Lazard LLC (LAZ) and China International Capital Corporation;
John E. Lowe, who currently serves as assistant to the CEO of
ConocoPhillips and serves on the board of Agrium Inc.; Harold W.
McGraw III, who currently serves as chairman, president and CEO of
The McGraw-Hill Cos. (MHP); Glenn F. Tilton, chairman of the
Midwest of J.P. Morgan Chase & Co. (JPM) and was previously
chairman and CEO of United Airlines Inc.; and Victoria J.
Tschinkel, chairwoman of 1000 Friends of Florida. She currently
serves on the board of ConocoPhillips.
All elections will be effective at the completion of
ConocoPhillips' spinoff, the company said.
-By Isabel Ordonez, Dow Jones Newswires; 713-547-9207;
isabel.ordonez@dowjones.com
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