ConocoPhillips Focuses on Debt Recovery Over Drilling in Venezuela
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Should l Buy COP?
Source: Yahoo Finance
- Debt Recovery Priority: CEO Ryan Lance emphasized during the Q4 earnings call that ConocoPhillips' current focus is on recovering owed funds from two judgments rather than increasing production, reflecting the company's cautious approach in a politically unstable market.
- Citgo's Potential Value: Lance indicated that Washington aims to keep the Citgo refinery in U.S. hands, suggesting that Conoco could recover part of its judgment through this process, highlighting a strategic shift towards asset monetization.
- Challenges of Returning to Venezuela: Even if sanctions ease, Lance stressed that a return would require stable policies and good local relations, which are currently absent, showcasing the company's high vigilance towards risks.
- Strategic Significance for Investors: ConocoPhillips is not relying on Venezuelan oil production to boost earnings but is betting on legal recovery to strengthen its balance sheet, a strategy that could provide cash returns independent of crude price fluctuations.
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Analyst Views on COP
Wall Street analysts forecast COP stock price to rise
18 Analyst Rating
15 Buy
3 Hold
0 Sell
Strong Buy
Current: 110.830
Low
98.00
Averages
113.39
High
132.00
Current: 110.830
Low
98.00
Averages
113.39
High
132.00
About COP
ConocoPhillips is an exploration and production company. Its Alaska segment primarily explores for, produces, transports and markets crude oil, natural gas and NGLs. The Lower 48 segment consists of operations located in the 48 contiguous states in the United States and the Gulf of Mexico. Canadian operations consist of the Surmont oil sands development in Alberta, the liquids-rich Montney unconventional play in British Columbia and commercial operations. The Europe, Middle East and North Africa segment consists of operations principally located in the Norwegian sector of the North Sea, the Norwegian Sea, Qatar, Libya, Equatorial Guinea and commercial and terminalling operations in the United Kingdom. Asia Pacific segment has exploration and production operations in China, Malaysia, Australia and commercial operations in China, Singapore and Japan. Other International segment includes interests in Colombia as well as contingencies associated with prior operations in other countries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Escalating Geopolitical Risks: With rising tensions between the U.S. and Iran, particularly the deployment of a carrier group in the region, the market anticipates that any conflict could lead to a temporary spike in global oil prices, further stimulating energy stock performance.
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- Surge in Oil Sales Revenue: Wright revealed that Venezuelan oil sales revenue has now topped $1 billion, with an expected additional $5 billion in crude sales through short-term agreements in the coming months, indicating strong U.S. interest and intent to rebuild Venezuela's oil market.
- Political Recognition Complexity: Although the U.S. does not officially recognize the government led by Delcy Rodríguez, Wright indicated that elections and a transition of power may occur during Trump's term, which will influence the U.S.'s ultimate recognition of the Venezuelan government.
- Debt Risk Management: Wright noted that the initial $500 million from oil sales was deposited in Qatar to prevent creditors from freezing the funds, reflecting the immense pressure Venezuela faces in repaying tens of billions in sovereign debt and nationalizing assets.
See More
