ConocoPhillips (COP), on its Q4 earnings call on February 5, described its Lower 48 production in 2025 as “more production for less capital.” The numbers don’t lie: in Q&A, management highlighted that Delaware oil productivity per foot is up 8% year over year even as lateral lengths increased 9%. In the Eagle Ford, 2025 oil productivity per foot was up another 7% from last year, and COP plans to reduce capital spending by more than 5% versus 2025 while maintaining 2026 production guidance of 2.33 to 2.36 MMboe/d, in line with the 2.32 MMboe/d produced in 2025.
COP emphasized that its upcoming LNG projects in Qatar (NFE and NFS), along with Port Arthur LNG, will drive future free cash flow. In 2026, balancing capex and operating costs while keeping production flat or growing will largely be about increasing free cash flow. EVP of Strategy and Commercial Andy O’Brien mentioned, “as we get into ’27 and ’28 a significant part of that is being driven by the LNG where we have NFE coming on, Port Arthur coming on, and NFS coming on.” He went on to mention, “we’ve placed the first 5 million tons that we have out of Port Arthur Phase 1 into Europe and Asia… and our view is that we’re feeling pretty confident around LNG prices holding up over the rest of this decade.”
When asked about WCS spreads, COP’s view was that Venezuelan barrels returning to market shouldn’t materially disrupt Canadian heavy in the near-to-medium term, because “PADD 2 refiners are structurally reliant on the Canadian heavy and have minimum alternative options to displace those barrels… Gulf Coast refiners can process the heavy barrels, and we’re starting to see some of those refiners express interest in purchasing some of those Venezuelan barrels.” O’Brien went on to say, “our view is the incremental Venezuelan barrels will likely be absorbed… The way we’re thinking about it is that the annual global demand is growing at 1 MMb/d. We’re going to need incremental sources of supply to help meet that demand growth. So, our modeling isn’t showing that the Venezuelan crude coming in is going to have a material impact on Canadian heavy.”
