Summary
Oil prices could end up averaging just $54 a barrel in 2019, down from $65 this year, which could hurt oil producers.
ConocoPhillips, however, will spend $6.1Bn as CapEx and deliver ~5% production growth in 2019 as output grows from Big-3 shale plays and Alaska.
ConocoPhillips’s production growth may lag behind some of its peers, but this is a cash flow king that rewards investors with dividends and buybacks.
Next year could be a tough one for oil prices if the commodity ends up averaging in the mid-$50s, which will be substantially lower than this year’s average of $65 a barrel. In this backdrop, a number of oil producers could struggle to generate strong levels of cash flows but not ConocoPhillips(COP). The company has recently laid out its spending plans for 2019, which show that it will continue doing well, even in a $40 to $50 a barrel oil price environment.
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