ConocoPhillips Sets $6.1bn Capex Budget For 2019

ConocoPhillips has set a capital expenditure budget for 2019 of $6.1 billion, which is flat to its expected full-year 2018 capex, excluding acquisition costs.

The 2019 budget does not reflect potential dispositions that may occur in 2019.

About $3.1 billion, or 51percent, will be allocated to the Lower 48, roughly flat to expected spending in 2018. The 2019 Lower 48 capital program anticipates running 10-11 rigs across the Eagle Ford, Bakken, and Delaware plays, with flexibility to shift activity among the plays during the year.

Included in the Eagle Ford and Delaware capital budget are provisions to conduct multi-well pilots of new completion designs. In addition, a portion of the budget will target exploration and appraisal activity in areas such as the Louisiana Austin Chalk play, as well as base maintenance and conventional drilling across the region.

About $1.2 billion, or 20percent, is allocated to Alaska. This compares with expected expenditures in 2018 of $900 million, excluding acquisition costs. The increase reflects expenditures at the recently sanctioned GMT-2, higher activity and higher working interest in existing fields, and further exploration activity focused on appraising the successful Willow discovery, partially offset by the roll-off of spending on GMT-1.

Capital assumes the previously announced Kuparuk transaction, which is subject to regulatory and other approvals, closes by year end.

About $500 million, or 8percent, is allocated to Canada compared with $300 million expected in 2018 excluding acquisition costs. The increase primarily reflects ongoing appraisal and development activity in the Montney unconventional program, in which the company expanded its wholly owned and operated position in the liquids-rich window of the play during 2018.

Operations are under way to drill a multi-well pad and install processing capacity to appraise the position. The increase also includes Surmont upgrades to enhance diluent flexibility and improve netbacks.

About $700 million, or 11percent, is allocated to Europe and North Africa compared with 2018 expected expenditures of $900 million. The reduction assumes the announced disposition of partial interest in Clair field in the UK closes by year end. North Sea plans include further development in both the UK and Norway.

About $500 million, or 8percent, is allocated to the Asia-Pacific and Middle East regions compared to 2018 expected expenditures of $700 million. The company is proceeding with plans to backfill the Darwin natural gas liquefaction plant through development of the Barossa offshore producing field, and development projects in China, Malaysia, and Indonesia.

About $100 million, or 2percent, is allocated to other 2019 activity, including corporate programs. This compares with $200 million in expected expenditures this year.

Source: OGJ

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