ConocoPhillips' quarterly earnings down year-over-year, while adjusted production increased 4%

ConocoPhillips Co. earned $1.7 billion in this year's third quarter, down from $2.1 billion in the same period last year, reflecting lower realized commodity prices. On an adjusted basis, the operator earned $2.0 billion, compared with $2.1 billion a year earlier. ConocoPhillips company said special items in the quarter were mainly related to restructuring costs.

Despite lower earnings, ConocoPhillips delivered higher production and reduced its full-year operating cost outlook. The company also raised its fourth-quarter ordinary dividend by 8% to $0.84 per share, payable Dec. 1, 2025.

Oil, gas production

Production in the third quarter averaged 2.4 MMboe/d, up 482,000 boe/d from a year earlier, driven in part by the Marathon Oil acquisition. Adjusting for asset sales and acquisitions, third-quarter production rose 4% year-on-year.

Lower 48 output averaged 1.53 MMboe/d, including 686,000 boe/d from the Delaware basin and 403,000 boe/d from the Eagle Ford. The company’s average realized price fell 14% from a year earlier to $46.44/boe.

Financials

ConocoPhillips generated $5.9 billion in operating cash flow in the quarter and spent $2.9 billion on capital expenditures and investments. The company returned $2.2 billion to shareholders through $1.3 billion in share repurchases and $1.0 billion in dividends. It ended the quarter with cash and short-term investments of $6.6 billion and long-term investments of $1.1 billion.

The company continued to advance its portfolio reshaping, completing more than $3 billion in asset sales year-to-date and remaining on pace to meet a $5 billion disposition target by the end of 2026. On Oct. 1, 2025, ConocoPhillips closed the sale of Anadarko basin assets for $1.3 billion, with additional noncore transactions of about $0.5 billion expected to close later this year.

ConocoPhillips also updated capital expectations for major projects. The cost estimate for the Willow development in Alaska has been revised to $8.5–9.0 billion, citing inflation and higher North Slope and marine costs. The company has narrowed its expected first oil timing to early 2029 as construction reaches about 50% completion.

ConocoPhillips continues to progress its three equity LNG projects: North Field East (NFE) and North Field South (NFS) in Qatar, and PALNG on the US Gulf Coast. The company has reduced its total LNG project capital guidance to $3.4 billion after securing a $0.6 billion credit against Port Arthur capital spending. Taking into account this credit, the company is about 80% complete with total LNG project capital. All three projects remain on schedule with first LNG from NFE expected in 2026.

Guidance

Looking ahead, ConocoPhillips expects fourth-quarter production of 2.30–2.34 MMboe/d and now forecasts full-year 2025 production of about 2.375 MMboe/d, slightly above prior guidance. Full-year adjusted operating costs are now expected to be $10.6 billion, lower than its previous guidance of $10.7-10.9 billion.

The company also provided preliminary 2026 guidance, including capital spending of about $12 billion, reduced operating costs of $10.2 billion, and flat to modest underlying production growth.

Chief executive officer Ryan Lance said the company remains positioned to deliver about $7 billion in incremental free cash flow through 2029, including roughly $1 billion annually from 2026 through 2028.