ConocoPhillips

Good morning, and welcome to the Q220 earnings call. My name is Zanera, and I'll be the operator for today's call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session. During the question-and-answer session, if you have a question, please press star, then 1 on your touch-tone phone. Please note this conference is being recorded. I'll now turn the call over to Ms. Ellen DeSantis. Ellen, you may begin.

Thanks, Inara. Hello to our listeners and welcome to our second quarter 2020 earnings call. Today's speakers will be Ryan Lance, our Chairman and CEO, Don Wollett, our EVP and Chief Financial Officer, and Matt Fox, our EVP and Chief Operating Officer. As many of you have noticed, in conjunction with this morning's press release, we posted a short presentation deck of supplementary material on the quarter. Page two of that deck contains our cautionary statement. We will make some forward-looking statements during today's call. Actual results could differ due to the factors described on that slide as well as in our periodic SEC filings. We'll also refer to some non-GAAP financial measures today, and reconciliations to the nearest corresponding GAAP measure can be found in this morning's press release and also on our website. And with that, I'll turn the call over to Ryan.

Thank you, Ellen, and good morning to our listeners. We are now at the midpoint of what has been nothing shy of an historic year for our industry and for the world. I hope everyone on the call is safe and well. Since the pandemic and the industry downturn began in March, ConocoPhillips has focused on three things. Safely operating the business, including taking appropriate actions to help mitigate the spread of COVID-19 and protect our workforce. Our field and office personnel are successfully delivering the business plan. I'm very proud of how our organization has stepped up in the face of this challenging time. Next, we're focused on executing thoughtful and prudent actions to create and preserve value by leveraging our relative strengths. And third, we're continuously monitoring the market, developing scenarios, and testing our current and future plans against those scenarios. Now, here's a quick recap of our actions through the first half of the year. We reduced 2020 capital spending by about $2.3 billion, lowered our operating costs by roughly $600 million, and suspended the share repurchase program. In April, as pricing deteriorated significantly, we announced that we would begin voluntary production curtailments. We laid out a clear and compelling economic rationale for curtailments. We believed we were well-positioned to carry them out because of our operational flexibility and our significant balance sheet strength. We believe this is a preferable approach for us versus hedging because it allows us to retain full exposure to the recovery in prices. Low realized prices and reduced volumes due to curtailments made for a tough headline second quarter earnings that mask the underlying strength of the company. Here's how you should read through the quarter's results. We came into the year with total liquidity of nearly $14 billion, including the $6 billion available under our revolver. At mid-year, we are sitting at about $13 billion, despite the crash in prices, with available cash and short-term investments totaling roughly $7 billion. If current prices hold for the rest of the year, we expect to exit the year in a similar position. Our cash position creates significant optionality for navigating the downturn. We can better withstand price volatility, elect to take actions such as production curtailments, bolt on deals like we announced in the Canadian Montney. Our underlying business is performing very well. Again, curtailments and dispositions mask the top line production numbers, but we have a very good handle on the base business. While our previously announced capital and cost reductions have modestly impacted near term productive capacity, we believe our lower capital intensity and portfolio diversification represent a relative advantage compared to the competition. many of whom have much higher decline rates and weaker balance sheets. So we're set up well during this time of uncertainty and volatility. But just as importantly, we're very well positioned to benefit from the inevitable recovery in prices. We have strong financial and productive capacity, low capital intensity, and we're unhedged. This should benefit us significantly when prices eventually move in a more positive direction. Importantly, we have choices on how to manage the recovery in a way that maximizes value for shareholders. So as you'd expect, we're already looking ahead. We're actively developing our views on the short- and medium-term outlook for both the path and the timing of recovery and prices. Given ongoing uncertainty, you can appreciate there isn't a simple answer to what's next. But here are some of the questions we'll be asking ourselves over the next weeks and months. What should our capital program be in relation to expected cash flows and our balance sheet capacity? To what extent might we choose to kickstart cash flow expansion if we see a recovery? How much cash do we want to carry on the balance sheet? What's the right way to think about stress testing our future? When we do distribute cash above the dividend to shareholders, and by what mechanism should we do that? While it's too early to communicate a definitive plan for the next year and beyond, you shouldn't expect the fundamental tenets of our value proposition to change. We still strongly believe in our approach to the business. Invest to generate strong cash flows and financial returns, while also returning a significant portion of cash flows to shareholders and maintaining a strong balance sheet. That's the business model we've been following for nearly four years. We launched it coming out of the last downturn in 2016, and it positioned us well for this downturn. We still believe it's the right model for the business and one we're uniquely positioned to execute as the environment recovers. Now let me turn the call over to Don to cover the key drivers in this quarter's results.