Summary
ConocoPhillips unveiled its 2019 budget today - which is flat compared with 2018's budget.
However, it's impressive that production growth is expected to be 8% on a per debt-adjusted share (at the midpoint of guidance).
Investment catalyst is that management expects "free cash flow at prices above $40 per barrel WTI." Note not Brent - WTI.
COP continues to be my favorite E&P company and is attractive here despite the recent oil price sell-off.
ConocoPhillips (COP) continues to be a leader in the E&P space. Over the past few years, COP has vastly upgraded its portfolio by jettisoning its high cost oil sands production in Canada to Cenovus (CVE), as well as selling the majority of its low-margin L48 natural gas properties. It has used the asset sales proceeds to drastically reduce debt. As a result, we found out in the 2019 Budget released today that the company expects to generate free cash flow with WTI at $40/bbl. Not Brent - WTI.
The 2019 Budget
The broad strokes of the 2019 budget are shown in the graphic below:
