ConocoPhillips shale output to grow 25% in 2019, CEO says, even as oil slides

ConocoPhillips (NYSE:COP) expects its shale production to increase 25% next year even as crude oil prices tumble, proving the industry’s resilience in volatile markets, CEO Ryan Lance tells Bloomberg.

ConocoPhillips plans $6.1 billion in capital expenditures in 2019, the oil and gas giant says, which is about the same amount the Houston-based company will spend by the end of 2018.

ConocoPhillips said it said it expects to buy back $3 billion of its own stock. The company plans to increase its target payout to shareholders to more than 30% of cash from operations, up from 20% to 30%. The company said it expects 2019 production to range from 1,300 thousand barrels of oil equivalent per day (MBOED) to 1,350 MBOED.

The CEO says COP’s wells in the Eagle Ford Shale, Permian Basin and Bakken field generate cash when prices hover ~$50/bbl; the company pumped 313K bbl/day from the three regions combined during Q3, or 25% of the company’s global production.

Production growth likely “slows down at $50 but I don’t think it stops at $50 and it certainly continues if prices get back to $60,” Lance says, adding that skeptics thought shale “wouldn’t last long but it’s here, it’s a huge resource and it’s going to be resilient and long lasting.”

ConocoPhillips plans $6.1B capex for 2019, $3B in share buybacks (Dec. 10)