The biggest capital spend will be on developing its position in the Eagle Ford Shale. Conoco’s plan calls for $8 billion to be spent over the course of its five-year development. That will add more than 130,000 barrels of production per day by 2017, which is a compound annual growth rate of 16%. Again, like the Bakken and Permian, this production will be increasingly oil rich, as the mix shifts from around 20% last year, to an average of more than 60%.
The Eagle Ford is one of the best liquids growth pays in the U.S., and Conoco isn’t the only company investing heavily to develop this play. Chesapeake Energy Corporation (NYSE:CHK) is devoting the largest portion of its capital on the play, with 35% of its drilling and completion capital earmarked to develop the Eagle Ford this year. As one of the best liquids growth plays, its no wonder why these two are investing so heavily in its development.
My Foolish take
When you add up these four key areas with the company’s other legacy development opportunities, ConocoPhillips (NYSE:COP) plans to grow its production in the U.S. by 5% annually through 2017. In total, the company will be spending $25 billion through 2017 to add 365,000 barrels of oil equivalent per day here at home. That’s just enough to offset the declines in its international development programs to keep production steady throughout its current portfolio In order to grow production, Conoco will need to deliver on its major international projects so that it can meet its ambitious goal of growing production by 3% to 5% on an annual basis.
The article How ConocoPhillips Is Stopping its Decline in the U.S. originally appeared on Fool.com and is written by Matt DiLallo.
Fool contributor Matt DiLallo owns shares of ConocoPhillips. The Motley Fool has the following options: Long Jan 2014 $20 Calls on Chesapeake Energy, Long Jan 2014 $30 Calls on Chesapeake Energy, and Short Jan 2014 $15 Puts on Chesapeake Energy.
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