COP · Q1 2026 Earnings

Cautious

ConocoPhillips

Reported April 30, 2026

30-second summary

ConocoPhillips raised FY26 production guidance midpoint by ~65 KBOED to 2,310 MBOED on Q1 outperformance, but simultaneously widened the FY26 capex range to $12.0–$12.5B (from ~$12B) and removed Qatar volumes from Q2 guidance — both tied explicitly to the Middle East conflict. Q1 production of 2,309 MBOED met the prior guide, Non-GAAP EPS landed at $1.89, and FCF was $2.4B. The tone shift is the story: management said the macro is "pretty impossible to predict" and is now publishing ranges instead of point estimates, while doubling down on remaining unhedged on oil and LNG to capture price upside.

Headline numbers

EPS

Q1 FY2026

$1.90

Revenue

Q1 FY2026

$15.76B

+4.6% YoY

Free cash flow

Q1 FY2026

$1.35B

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$15.76B	+4.6%	$13.39B	+17.7%
EPS	$1.90	—	$1.02	+86.3%
Free cash flow	$1.35B	—	—	—

Guidance

FY2026 production guidance raised significantly to 2.31 million BOE/d midpoint (from ~2.25 million), while capital spending raised to $12.0–$12.5 billion; operating costs reaffirmed; Q1 production met guidance.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Production	Q1 FY2026	2,300,000 to 2,340,000 barrels of oil equivalent per day	2,309 MBOED	in-line	Met

New guidance

Metric	Period	Guide	YoY
Production	Q2 FY2026	2,200,000 barrels of oil equivalent per day (midpoint)	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Production	FY2026	2,230,000 to 2,260,000 barrels of oil equivalent per day	2,310,000 barrels of oil equivalent per day (midpoint)	+50,000 to +80,000 BOE/d (midpoint raised from ~2,245,000 to 2,310,000)	Raised
Capital spending	FY2026	approximately $12 billion	$12.0 billion to $12.5 billion	+$0.0 to +$0.5 billion (range-widened upward; low-end reaffirmed, high-end raised)	Raised

Reaffirmed unchanged this quarter: Operating costs ($10.2 billion)

Other KPIs

Q1 FY2026

Segment	Q1 FY2026
Total Production	2,309 MBOED
Crude Oil Production	1,111 MBD
Natural Gas Production	3,988 MMCFD
NGL Production	415 MBD
Average Realized Price per BOE	$50.36/BOE
Crude Oil Realized Price	$73.47/BBL
Natural Gas Realized Price	$4.09/MCF
Operating Cash Flow	$4.295 billion

Management tone

Bullish reframe (Q2) → Willow overrun defense (Q3) → FCF inflection underway (Q4) → conflict-driven uncertainty framework (Q1).

The macro language deteriorated from "volatile" to "impossible to predict" in one quarter. Q4 framed the environment as volatile but manageable — the FCF inflection was declared "underway" in present tense and 2026 guidance was committed without hedging language. This quarter the anchor was "the macro environment remains volatile and pretty impossible to predict." "Impossible to predict" is unusually stark language for ConocoPhillips, which has historically used measured corporate diction. The shift signals management has lowered its own confidence in forecasting and is preemptively widening the goalposts — the explicit move from a point capex estimate to a $500M range is the structural manifestation of this verbal shift.

Guidance format shifted from points to ranges, explicitly tied to conflict. Across Q2-Q4 2025 the company committed to point estimates on capex and opex without much hedge. This quarter management said "we're incorporating a guidance range to capture the uncertainty around the macro environment as well as the Middle East conflict" while introducing the $12.0–$12.5B capex band. This is the first time in this coverage cycle COP has formally widened a forward range mid-year and attributed it to an external event. It's an honest disclosure rather than a credibility loss, but it represents a meaningful break from the Q4 posture of reaffirming numbers without hedge.

The unhedged-oil posture moved from background to foreground. In prior quarters the low-hedge ratio was a quiet structural feature. This quarter it became the explicit strategic anchor: "Our expected CFO generation is up materially given our unhedged oil and LNG torque...we remain unhedged on oil and LNG to ensure we capture the price upside." Pairing this with "impossible to predict" macro language is the substantive tension in the quarter — management is leaning maximally into a price exposure they say they cannot forecast, on the bet that the conflict-driven price strength persists. This is a high-conviction call dressed in cautious language.

Production framing shifted from steady to geopolitically-impacted. Q4 introduced the FY26 production guide as a clean operating number adjusted for divestitures. This quarter management explicitly carved out conflict and price-driven volume impacts — Qatar removal from Q2 guide (20 KBOED annual), Surmont royalty bumps from higher prices (15 KBOED annual). The framing concedes that production guidance is no longer a pure operational forecast but an operational-plus-geopolitical composite. The defensive disclaimer "This is not a call on when we think the conflict will resolve. We're simply trying to provide a clear and transparent framework" is unusual phrasing for an upstream operator and suggests prior investor pressure on conflict-related guidance clarity.

Capital deployment turned mildly opportunistic for the first time since Marathon. Q3 was defensive on Willow capex; Q4 was disciplined-reaffirmation. Q1 added $250M of Delaware spend driven by partner ballots and one operated rig, with the rationale being efficiency gains and partner activity — not a price call. Management deferred any decision on flexing 2027 activity to "later in the year" pending an assessment of the mid-cycle price equilibrium. The previous COP mid-cycle WTI floor of $65 is now under review upward — a structural reframing that, if confirmed in Q2 or Q3, would materially re-rate the FCF math.

Recurring themes management leaned on this quarter:

Geopolitical volatility and Middle East conflict impactFree cash flow growth and capital returnsLower 48 capital efficiency and three-mile-plus lateralsAlaska infrastructure and low-cost resource unlockingLNG expansion (Port Arthur and Equatorial Guinea tolling)Balance sheet protection and investment grade maintenance

Risks management surfaced:

Middle East conflict and supply curtailmentMacro volatility and unpredictabilityQatar volume impacts from regional conflictHigher royalty rates at Sermont from elevated oil pricesTiming uncertainty around NFE and NFF spending

Q&A highlights

Scott Hanold · RBC Capital Markets

What is management's view of current oil market dynamics, including physical vs. financial positioning, inventory levels, and how operators are expected to react to supply disruptions?

Management provided detailed market analysis: 10 million barrels of production offline, 8 million barrels/day of refinery run cuts globally, inventory draws accelerating, governments implementing demand rationing. Downgraded global oil demand outlook to flat year-over-year with downside risk. Emphasized mid-cycle price floor likely rising from $65, assessing new long-term equilibrium price impacts.

10 million barrels of air production offline for ~2 months~8 million barrels/day global refinery run cutsPrevious mid-cycle TI price: $65Expect critical shortages in import-dependent countries June-July timeframe

Neil Mehta · Goldman Sachs

What is the progress on Willow construction and what are the key milestones for de-risking and reaching free cash flow inflection?

Willow project 50% complete with process modules on Gulf Coast also 50%+ complete. Accomplished full winter scope including all civil work, bridges, gravel roads/pads, airstrip, and east-west pipeline connections. Sea lift of process modules planned for next summer. Early oil expectation remains 2029 on track. Alaska exploration successful with 4 wells, seismic, and high-success gravel exploration to support keeping infrastructure full.

Willow 50% completeProcess modules 50%+ complete in Gulf Coast fabricationEarly oil expected 2029 on track$7 billion free cash flow inflection target

Betty Jung · Barclays

What is the decision process for leaning into Permian activity at higher oil prices, and what price level would trigger further activity flexing and sensitivity on 2027 production?

Increased CapEx by $250 million concentrated in Delaware Permian, split between operated and non-operated. Driven by operational efficiency continuation and partner ballots for more wells, not macro price calls. Adding one additional rig to maintain fracking pace and prevent fracking gaps. 15% D&C efficiency improvement last year with completion efficiencies outpacing drilling. Assessment of mid-cycle price and new equilibrium effects on long-term strategy deferred to later in year.

$250 million additional CapEx in Delaware PermianAdding one additional operated rig in Permian15% D&C efficiency improvement achieved last yearCompletion efficiencies outpacing drilling efficiencies

Devin McDermott · Morgan Stanley

What is the update on LNG portfolio outside Middle East, particularly the EG agreement, and progress on placing 5 million tons of commercial LNG offtake from Port Arthur?

Signed tolling agreement with third party at Equatorial Guinea LNG (EGLNG) to extend asset life into 2030s. First 5 million tons of Phase One already placed predominantly in Europe with some Asia allocation. Intensified conversations on placing remaining volumes. EGLNG upstream ALBA unit producing, offshore facilities operational, potential for future discovered gas resource commercialization. Structural global LNG tightening observed with first-mover advantage providing strong positioning.

EGLNG tolling agreement extending asset life into 2030s5 million tons Phase One placed predominantly Europe, some Asia10 million tons total LNG commercial portfolioStructural tightening of global LNG market observed

Arun Jayaram · JP Morgan

How are Middle East disruptions impacting LNG macro view, and what is the update on NFE and NFS project status and timeline?

Qatar production shutdown impacts ~20% of global LNG (200 cargoes not sailed). Two trains damaged at Ras Phaon, Qatar Energy expects 3-5 year market impact. Global structural LNG shortage anticipated with constructive pricing for extended period. ConocoPhillips' single producing Qatar asset (RasGas, ~80,000 boe/d or 3% of production) largely unaffected. NFE and NFS construction progressing despite some interruptions; QE disclosed delays expected, likely months not years; QE originally guided H2 2024 startup, extension into early 2025 possible. Company removed Qatar production from 2Q guidance due to conflict dependency.

~200 cargoes (20% of global LNG) not delivered due to Qatar shutdownQatar damage expected to impact market 3-5 yearsConocoPhillips Qatar production: ~80,000 boe/d (3% of total)NFE and NFS construction delays expected in months (not years)

Answers to last quarter's watch list

FY2026 trajectory vs the 2,230–2,260 MBOED guide — Q1 printed 2,309 MBOED, in line with the prior 2,300–2,340 Q1 guide. The FY26 midpoint was raised to 2,310 MBOED, materially above the Q4 guide's 2,245 midpoint. Underlying performance is clearly running ahead of the divestiture-adjusted base management framed in Q4.

Resolved positively

Willow capex range — $8.5–9B holding into early-2029 first oil — No revision disclosed this quarter; project 50% complete, full winter scope accomplished, sea lift planned next summer, early oil 2029 reaffirmed. Two consecutive quarters without a cost revision is the trajectory bulls needed.

Resolved positively

NFV LNG startup in 2H26 — schedule and ramp — Not specifically addressed in the disclosed Q&A; Port Arthur was reaffirmed for 2027 and EGLNG was the main LNG update. Management did not refresh an NFV-specific date.

Continue monitoring

Marathon synergy completion percentage at full year-end — Not refreshed in this quarter's disclosure. The $1B cost and margin program continues in execution but the discrete Marathon synergy percentage was not updated.

Continue monitoring

Asset disposition cumulative against $5B by end-2026 — Not specifically refreshed in the disclosed materials. The disposition program continues but no new dollar milestone was disclosed in Q1.

Continue monitoring

Operating cost trajectory toward $10.2B FY26 vs the FY25 baseline — FY26 opex guide reaffirmed at $10.2B explicitly described as a $400M reduction from 2025. The reaffirmation is the substantive answer given that production guidance was raised — costs are not being absorbed into the volume increase.

Resolved positively

What to watch into next quarter

Q2 production print vs the 2,200 MBOED midpoint guide — Watch how much of the 110 KBOED sequential step-down is genuinely conflict-driven vs latent operational softness. A print materially above 2,200 would suggest the Qatar carve-out was conservative; below would reopen questions about underlying decline.

Mid-cycle WTI floor reassessment — Management explicitly deferred this to "later in the year." Watch Q2 or Q3 for a formal update to the $65 mid-cycle assumption. An upward revision would re-rate the entire FCF bridge math.

Capex range — does the $12.5B high-end hold — The range was widened upward this quarter for the first time. Watch whether Q2 keeps both ends of the band or trims the high-end as conflict visibility improves.

Willow capex stability — third consecutive quarter without revision — At 50% complete with module fabrication tracking, the back half of the project is where overruns historically appear. Another clean print would convert the Q3'25 overrun into a one-time recalibration in the narrative.

Qatar volume restoration timing — Management removed Qatar from Q2 guidance but the ~80 KBOED / 3% of production exposure remains in the portfolio. Watch for any indication of when those volumes return to the official guide.

EGLNG remaining-volume placement — First 5 MTPA placed predominantly in Europe. Watch for announced offtake on the back-end volumes; this is the cleanest near-term LNG commercial milestone given Port Arthur is locked in for 2027.

Sources

ConocoPhillips Q1 2026 8-K and press release exhibit, filed April 30, 2026 — https://www.sec.gov/Archives/edgar/data/1163165/000116316526000016/cop-20260430x8kexx992.htm
ConocoPhillips Q1 2026 earnings call prepared remarks and Q&A (transcript referenced in extraction)
ConocoPhillips Q4 2025 8-K and press release exhibit (prior quarter baseline)
ConocoPhillips Q3 2025 8-K and press release exhibit (prior quarter baseline)
ConocoPhillips Q2 2025 8-K and press release exhibit (prior quarter baseline)

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