ConocoPhillips
COP · NYSE
Next quarter
Expected to report Nov 5, 2026 — estimated from last year’s reporting date.
Consensus is $2.17 EPS for Sep 2026 across 6 estimates, ranging $1.74 to $2.74.
COP Jun 2026
- 9.46%
- $2.96
- $3.24
- —
- $18.09B
Reported results
- $18.09B
- 62.89%
- $3.93B
- $3.23
Highlights
- Earnings beat: Second-quarter diluted EPS was $3.24 versus consensus of $2.96, a 9.46% surprise; GAAP diluted EPS was $3.23 in the 10-Q, up from $1.56 a year ago and $1.78 in Q1.
- Oil-price lift: Total revenues and other income reached $19.52 billion, versus $14.74 billion a year ago and $16.05 billion in Q1, as realized crude prices rose 55% year over year to $99.40 per barrel.
- Profit growth: Net income was $3.93 billion, compared with $1.97 billion a year ago and $2.18 billion in Q1; higher crude and bitumen prices added $3.73 billion to second-quarter sales, partly offset by $409 million from lower volumes.
- Lower 48 strength: Lower 48 earnings rose to $2.58 billion from $1.40 billion a year ago, supported by $1.89 billion of higher crude and NGL price realizations and $155 million of lower operating costs, despite weaker gas prices and production.
- Cash returns: Operating cash flow was $7.43 billion, funding $3.02 billion of capital spending and $3.03 billion returned to shareholders through $2.00 billion of repurchases and $1.03 billion of dividends.
- Production decline: Total production fell 6% year over year to 2,248 MBOED, or 2,309 MBOED in Q1, primarily from normal field decline, dispositions and higher Surmont royalties; Q3 guidance is 2.29-2.32 MMBOED.
- Portfolio reshaping: ConocoPhillips agreed to sell noncore Lower 48 assets for approximately $1.7 billion, achieving its $5 billion disposition target ahead of schedule; the assets produced about 21 MBOED in 2025.
- LNG and expansion: Commercial LNG offtake increased from 10.2 to 12.2 MTPA, while a planned $0.4 billion acquisition of a 42% interest in a Kirkuk, Iraq joint venture adds four producing oil fields, subject to closing conditions.
Analysis
ConocoPhillips delivered a strong second quarter, with reported EPS of $3.24 versus the $2.96 consensus estimate, a 9.46% beat. GAAP diluted EPS was $3.23, compared with $1.56 in Q2 2025 and $1.78 in Q1 2026. Total revenues and other income rose to $19.52 billion from $14.74 billion a year ago and $16.05 billion in the prior quarter, while net income increased to $3.93 billion from $1.97 billion and $2.18 billion, respectively. Revenue from contracts with customers was $18.09 billion.
The print was primarily an oil-price story: realized crude prices rose 55% year over year to $99.40 per barrel, lifting sales by $3.73 billion despite a 6% production decline to 2,248 MBOED. The Lower 48 was the main operating contributor, with earnings up 85% to $2.58 billion as price gains and efficiency savings outweighed weaker natural-gas realizations. Cash generation remained robust, with $7.43 billion of operating cash flow supporting $3.02 billion of capital investment and $3.03 billion of shareholder returns. Management also advanced portfolio rationalization, LNG commercialization and a potential Iraq entry, while reaffirming full-year guidance.
Oil prices and earnings
Commodity prices, rather than volume growth, defined the quarter. Brent averaged $104.52 per barrel versus $67.82 a year ago, WTI averaged $92.79 versus $63.74, and ConocoPhillips’ total realized price increased 36% to $62.33 per BOE. Crude and bitumen price gains contributed $3.73 billion to second-quarter sales. The benefit was partly diluted by natural gas weakness: Henry Hub fell 16% to $2.90 per MMBTU and ConocoPhillips’ realized gas price fell 38% to $2.58 per MCF. The consolidated effective tax rate was 35.4%, compared with 34.7% a year ago.
- Revenue: Total revenues and other income were $19.52 billion, up 32% year over year and 22% sequentially; sales and other operating revenues were $19.16 billion.
- Earnings quality: Special items reduced earnings by a net $20 million in the quarter, so the reported result was broadly representative of underlying operations.
- Cost control: Production and operating expenses fell $141 million year over year to $2.43 billion, although DD&A increased $145 million to $2.98 billion.
Lower 48 performance
The Lower 48 supplied the largest earnings increase. Segment net income climbed to $2.58 billion from $1.40 billion, and the region contributed 69% of consolidated liquids production and 74% of natural-gas production. Higher crude and NGL realizations added $1.89 billion to earnings and operating efficiencies added $155 million. Those gains outweighed $459 million from lower gas prices, $125 million from lower volumes, the absence of a $254 million disposition gain and $112 million of higher DD&A.
- Volumes: Lower 48 production declined to 1,479 MBOED from 1,508 MBOED, with normal field decline and prior dispositions partly offset by new wells in the Delaware, Eagle Ford, Midland and Bakken basins.
- Gas exposure: Realized Lower 48 gas prices fell to negative $1.44 per MCF from $1.60, reflecting weak regional pricing and transportation effects.
- Asset sale: Noncore assets agreed for sale in the quarter represented about 21 MBOED of 2025 production and were sold for approximately $1.7 billion in Q3.
Cash returns and investment
ConocoPhillips converted the stronger price environment into substantial cash distributions while continuing to fund the portfolio. Operating cash flow reached $7.43 billion, up from $3.49 billion a year earlier and $4.30 billion in Q1. Capital expenditures and investments were $3.02 billion, with more than half directed to flexible, short-cycle Lower 48 unconventional projects.
- Shareholder returns: The company repurchased $2.00 billion of stock and paid $1.03 billion in dividends during the quarter, for total distributions of $3.03 billion.
- Dividend: Management declared a third-quarter ordinary dividend of $0.84 per share, unchanged from the second quarter.
- Year-to-date: Six-month operating cash flow was $11.73 billion, versus $9.60 billion in the prior-year period; repurchases and dividends totaled $5.06 billion.
Production and outlook
Production remained the main operational counterweight to the earnings result. Total output declined to 2,248 MBOED from 2,391 MBOED a year ago and 2,309 MBOED in Q1. Management attributed the year-over-year decline primarily to normal field decline, asset dispositions and, in Canada, higher variable royalties at Surmont following its post-payout event. New wells in the Lower 48, Alaska, Canada, China, Australia and Libya provided only a partial offset.
- Oil mix: Total crude production fell to 1,094 MBD from 1,155 MBD, while NGL production was broadly stable at 420 MBD versus 424 MBD.
- Gas output: Total natural-gas production declined to 3,710 MMCFD from 4,005 MMCFD, largely because equity-affiliate volumes fell to 865 MMCFD from 1,150 MMCFD.
- Guidance: Third-quarter production is expected at 2.29-2.32 MMBOED, and all full-year guidance items were reaffirmed.
Portfolio and LNG strategy
The quarter also advanced ConocoPhillips’ portfolio strategy. The $1.7 billion Lower 48 sale, combined with prior transactions, completed the company’s $5 billion disposition target ahead of the end-2026 deadline. At the same time, the company added longer-term growth options through LNG offtake and international conventional assets.
- LNG commercialization: New commercial agreements increased offtake commitments by 2.0 MTPA, from 10.2 to 12.2 MTPA.
- Iraq entry: A July agreement provides for a 42% direct interest in a non-operated Kirkuk joint venture supporting four producing oil fields; the purchase price is $0.4 billion, including $0.2 billion of deferred payments.
- Syria re-entry: ConocoPhillips and a third-party operator agreed with Syrian authorities to increase production from certain gas fields, although no material 2026 impact is expected.
- Qatar exposure: Qatar LNG investments were not damaged, but production remained constrained through Q2 amid Middle East geopolitical tensions.
Balance sheet and funding
The balance sheet remained sound after the quarter’s distributions and investment spending. Cash, cash equivalents and restricted cash ended at $6.97 billion, with short-term investments of $1.12 billion and long-term debt securities of roughly $1.16 billion. Total debt was $23.3 billion, broadly unchanged from $23.4 billion at December 31, 2025, while the debt-to-capital ratio was 26%.
- Liquidity: Cash, restricted cash and short-term investments totaled approximately $8.1 billion at quarter end.
- Share count: Ending common shares declined to 1.201 billion from 1.218 billion at March 31, reflecting the company’s repurchase activity.
- Environmental exposure: Accrued environmental costs in the U.S. and Canada increased to $306 million from $220 million at year-end, although management said known contingencies were unlikely to have a material adverse impact.
