- Written by Marc Courtenay
- Wednesday, 21 May 2008
On this very day when the record U.S. crude oil futures price of $132.08 a barrel became a reality, the very day after T. Boone Pickens predicted oil prices will surge to $150 a barrel before the end of this year, we want to spotlight one big player whose share price is fundamentally-speaking still deemed "reasonable" by many analysts even at the 52-week high.
ConocoPhillips (NYSE:COP) has plans to build an enormous refinery in Saudi Arabia, along with Saudi Aramco. It will be located on the Red Sea side of the Arabian Peninsula. The plant is said to be comparable to another Aramco refinery which cost about $10 billion and produces about 400,000 barrels a day.
COP has a market cap of over $144 billion, compared to a similar company, Marathon Oil (NYSE:MRO) with a market cap of only $39 billion. That's because COP is one behemoth of an energy giant. They've grown by acquisiton (for example Burlington Resources) and organically. One of the organic ways they can profit further is in their natural gas business.
That's why Spectra Energy Corp (NYSE:SE)has signed an agreement with the Houston energy giant ConocoPhillips to deliver up to 395 million cubic feet per day of Rocky Mountain natural gas from the Clarington, Ohio, supply point in York County, Pa.
Houston-based Spectra (NYSE: SE) plans to transport the natural gas via an expansion of its Texas Eastern Transmission pipeline system, known as the Temax Project.
The expansion will include adding about 33 miles of pipe from Marietta, Pa. to Station 195 on the Transcontinental Gas Pipeline Corp's pipeline system near Delta, Pa. The delivery is expected to be at the Pennsylvania station by November of 2010. Another lucrative feather in the COP cap.
Exploration and Production
Through its Exploration and Production (E&P) segment, ConocoPhillips explores for and produces oil, natural gas and natural gas liquids (NGL) throughout the world. Our portfolio includes strong legacy producing assets in the Lower 48 U.S. states, Alaska, Canada, the United Kingdom and Norway; growth opportunities offered through major development projects in the Middle East, North Africa and the Asia Pacific region; and a global exploration program.
On March 31, 2006, ConocoPhillips completed its $33.9 billion acquisition of Burlington resources, one of the world’s largest independent oil and natural gas exploration and production companies. In early 2007, ConocoPhillips expanded its position in the Canadian oil sands business by creating an integrated heavy-oil business with EnCana Corporation of Canada. The business includes ventures engaged in heavy-oil production in Canada and heavy-oil processing in the United States.
As of December 31, 2007, ConocoPhillips held exploration activities in 23 counties and production in 16, with proved reserves in three additional countries. Fourth-quarter 2007 production was 2.3 million barrels of oil equivalent per day (includes LUKOIL and Syncrude).
Exploration and Production Facts
As of year-end 2006, includes equity affiliates other than LUKOIL.
|Total Reserves||9.4 BBOE1|
|Five-Year Reserve Replacement Average||$290%2|
|Five-Year Pro Forma Reserve Replacement Average||$181%3|
|Total Worldwide Production||1,936 MBOED4|
|Crude Oil Production||972 MBD|
|Natural Gas Production||4,970 MMCFD|
|Natural Gas Liquids Production||136 MBD|
1. Excludes 243 MMBOE of Syncrude and 1,805 MMBOE from LUKOIL. Includes 1.1 BBOE associated with Venezuela.
2. Includes sales, acquisitions and equity affiliates (including LUKOIL).
3. Assumes that Conoco and Phillips has been a single, merged company for the full five-year period. Includes sales, acquisitions and equity affiliates (including LUKOIL).
4. Excludes 21 MBOED of Syncrude and 401 MBOED from LUKOIL. Includes 101 MBOED associated with Venezuela.
One of the most exciting and underappreciated segments of COP's growth is their Emerging Businesses.This segment develops new technologies and businesses. It focuses on the power generation; development of carbon-to-liquids technology through coal and petroleum coke; and alternative energy and programs, such as advanced hydrocarbon processes, energy conversion technologies, new petroleum-based products, and renewable fuels. It also offers E-Gas, a gasification technology that produces high-value synthetic gas.