ConocoPhillips beats second-quarter earnings as record Permian production supports results

ConocoPhillips said second-quarter results came in ahead of Wall Street expectations, helped by stronger realised oil prices and record output from its Permian Basin position, even as total company production declined from the same period last year and management kept its full-year outlook unchanged. ConocoPhillips, which trades as NYSE:COP, posted adjusted earnings of $3.24 per share for the quarter. That was above analysts’ expectations of $2.85 per share. On a GAAP basis, net income increased to $3.9 billion, or $3.23 per share, compared with $2.0 billion, or $1.56 per share, in the second quarter of last year. A major factor behind the earnings improvement was pricing. The company’s average realised selling price rose 36% to $62.33 per barrel of oil equivalent from $45.77 a year earlier. That increase provided a significant lift to profitability and helped offset some of the operational pressures that affected output in other parts of the portfolio. Even with record Permian production, total production for the quarter averaged 2.248 million barrels of oil equivalent per day, down 143,000 barrels per day from the second quarter of 2025. Excluding acquisitions and asset sales, production declined by 98,000 barrels per day. The company said that growth in the Lower 48 was more than offset by disruption tied to the Middle East conflict affecting operations in Qatar, along with higher royalty payments at Surmont. Within the Lower 48, production reached 1.479 million barrels of oil equivalent per day. That included 720,000 boepd from the Delaware Basin, 202,000 boepd from the Midland Basin, 363,000 boepd from Eagle Ford, and 189,000 boepd from the Bakken. Those figures underscore the weight of the company’s U.S. shale portfolio in supporting results, especially the peer-leading Permian position highlighted by management. Chairman and Chief Executive Officer Ryan Lance described the quarter as one of exceptional operational performance, citing record production from the company’s peer-leading Permian position and disciplined execution across the business. Lance also said ConocoPhillips doubled its quarterly share repurchases, achieved its $5 billion asset disposition target ahead of schedule, secured low cost of supply opportunities in the Middle East, and increased its LNG offtake to 12 MTPA. He added that the company remains on track to achieve its $7 billion free cash flow inflection by 2029. Capital returns were a prominent feature of the quarter. ConocoPhillips doubled its quarterly share repurchase programme to $2 billion during the period. Together with $1 billion in ordinary dividends, total shareholder distributions reached $3 billion for the quarter. The company also declared a third-quarter dividend of $0.84 per share, payable on September 1, 2026, to shareholders of record on August 17. The balance sheet remained solid. Operating cash flow before working capital movements totaled $7.2 billion. At quarter end, ConocoPhillips held $8.1 billion in cash and short-term investments, along with another $1.2 billion in long-term investments. The company also continued reshaping its portfolio. In July, it completed the sale of non-core Lower 48 assets for $1.7 billion, enabling it to meet its $5 billion asset disposal target ahead of schedule. It also agreed to acquire a 42% stake in a joint venture in Iraq’s Kirkuk region, with completion expected before the end of 2026. In addition, ConocoPhillips reached an agreement to re-enter Syria in order to restore and expand production from onshore oil fields. Looking ahead, ConocoPhillips expects third-quarter production to be between 2.29 million and 2.32 million barrels of oil equivalent per day. Management left all full-year guidance unchanged. That steady stance appeared to temper investor enthusiasm, even after the earnings beat and strong operational showing, because it suggested no material change to the company’s broader expectations despite improving prices and record Permian output.