ConocoPhillips

Welcome to the first quarter 2021 ConocoPhillips Earnings Conference Call. My name is Hilda, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press star and then one using your touchstone phone. Please note that this conference is being recorded. I will now turn the call over to Ellen DeSantis. Ellen, you may begin.

Thank you, Hilda. Hello and welcome this morning to our listeners. I'll first introduce the members of our ConocoPhillips executive team who are on today's call. We have Ryan Lance, our chairman and CEO. Bill Bullock, our executive vice president and chief financial officer. Tim Leach, our executive vice president of the lower 48. Dominic Macklin, RSVP of strategy and technology. and Nichols, our FCP of Global Operations. Today, several of our executives will make prepared remarks, and then the team will take your questions. Before I turn the call over to Ryan, a few quick reminders. In conjunction with this morning's press release, we posted a short deck of supplemental material that includes first quarter highlights, earnings and cash flow summaries, operational highlights, and updated sensitivities. We also announced this morning that ConocoPhillips will host a virtual market update on June 30th. So save that date. We will be providing details on that meeting shortly. In today's call, we will make some forward-looking statements based on current expectations. Actual results could differ due to the factors described in today's press release and in our periodic SEC filings. And finally, we'll also refer to some non-GAAP financial measures today. Reconciliations to the nearest corresponding GAAP measure can be found in this morning's press release and on our website. And with that, I'll turn the call over to Ryan.

Thank you, Ellen, and welcome to all our call participants. It's a very busy but exciting time at ConocoPhillips. With the Concho transaction now closed, Our entire workforce is on a mission to emerge from last year's extreme sector volatility and the transaction integration activities as the strongest competitor in our business. We're viewing 2021 as a catalyst moment, like we did in 2016, to improve every aspect of our business and again step out from the pack by taking our disciplined, shareholder-friendly value proposition to the next level. We're taking actions across every aspect of the company to improve our underlying drivers, and our first quarter results represent an early indication of our progress. Some of the actions we're taking are transformational, such as capturing synergies. Others are chipping away at core drivers to improve efficiency and returns, such as the debt reduction plans we announced this morning. Here's what everyone in our organization is focused on. We believe a safe company is a successful one. With the CONCHA transaction, we've combined two industry-recognized safety leaders, which has aided our overall integration. And again, I want to recognize our workforce for their exceptional handling of the many challenges presented by the winter storm URI last quarter. We're continuously driving to lower the cost of supply of our diverse resource base. We have a deep inventory of the very best rocks, which is a clear source of sustained competitive advantage. And we're always working to further high-grade the portfolio through asset sales. But our low-cost inventory loan isn't enough. We're focused on applying our rigorous capital allocation process to optimize investments based on the metrics investors demand, free cash flow and returns. We're driving improvements in free cash flow and returns by driving down our sustaining capital through well cost and supply chain efficiencies as well as margin improvement. Driving down our cost structure through synergies and balance sheet improvements. Driving down our sustaining price through the combination of lower sustaining capital and lower cost structure. And finally, we don't cap the benefit from higher prices, which means upside in free cash flow above our sustaining price. We're only a short time into the Contra integration, but we're already seeing the previously announced synergies materialize, and we expect to yield additional benefits as our integration progresses. We remain committed to returning a significant portion of capital to our shareholders, with a five-year track record of exceeding our target of greater than 30% of CFO. In fact, Our return to shareholders since implementing our returns-focused strategy in 2016 has been 43% of cumulative CFO. So our capital return approach represents a floor on the level of capital returns, not a ceiling. We don't tie our returns to free cash flow like others are doing. So in other words, investors directly benefit from CFO expansion, including from higher prices when they occur. And as you saw in today's release, we're taking actions to further increase our returns of capital in 2021. In addition to our ordinary dividend and our previously announced $1.5 billion of buybacks, we intend to begin reducing our Synovus ownership stake using proceeds to purchase incremental ConocoPhillips stock. We're taking action to further strengthen our balance sheet. This morning, we also announced that we're planning to reduce gross debt by $5 billion over the next five years. This will reduce our annual interest expense cost and help lower our sustaining price. And finally, we're focused on leading in ESG, especially in emissions reductions. All of this is underpinned by our talented, motivated workforce. They're the driving force in our progress. You can tell from my comments that we're encouraged by the improvements we're seeing across the company. That's why we announced in today's press release our intention to accelerate our 2021 market update from November to a virtual event on June 30th. Now, here's what you can expect at that update. We'll reiterate our discipline and philosophy for the business and how we expect to enhance our through-cycle performance for a volatile price world, but also for a more stable price world should that transpire. We'll reaffirm the allocation priorities that have been foundational to our company for years. Compared to our plan two years ago, we believe every part of the business has improved. And our goal is to put ConocoPhillips in an even better position to deliver multiple years of free cash flow and returns to shareholders post concha. We'll provide an update on our outlook for 2021 and beyond, including our synergy capture progress and our business driver improvements. We'll also provide updates on our asset base and our ESG efforts and plans. As I said earlier, it's a busy time for the company, but we're going to take advantage of our momentum to reengage the market sooner rather than later on our compelling future. Now let me turn the call over to Bill, who will address high-level quarterly results, as well as our announced debt reduction and Synovus COP share plans. Thanks, Ryan.