ConocoPhillips:2Q17Results,And The Beat Goes On

新萄京官网,    COP continues to differentiate itself on both operational execution
andsustainability in a low price environment, with its fourth
consecutive quarter ofcash flow exceeding capex + dividends. With both
production and capex beatingagain, we see increasing conviction on its
ability to grow FCF and cash returnto shareholders. Positive: Yet
another beat on volumes (1,425 Mboe/d vs. DBe1,385 and guide of
1,365-1,405; +3% YoY), capex ($1,020m vs. DBe $1,345m) andFCF ($349m vs.
DBe $134m, post-dividend). COP raised FY production guidance~25 Mbd,
reduced FY DD&A guide by ~$300m, and reduced FY capex guideby $200m.
Negative: CFO of $1640mm was slightly below DBe $1,800mm;International
natural gas (volumes and pricing) weaker than expected. We expectthat
continued execution on both operations and cash return to
shareholderswill reduce investor concerns on sustainability/execution
and see COP as highlyadvantaged in a moderate/low oil price environment,
offering peer-leading FCFyield and strong returns at a valuation
discount. Buy.

Death, taxes, and a COP production/capex beat on the quarter



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