Conocophillips Case Analysis

833 Words 4 Pages
ConocoPhillips (NYSE:COP) is one of the richest energy companies in the United States which has an incredible position among its competitor companies. This company has a good track record of a constant dividend payout policy and has never disappointed its shareholders in terms of good returns.
COP is a member of the U.N. led initiative to reduce emissions of methane. This means that it understands its ethical social responsibility and its duty towards the customers and the environment to reduce air pollution. This adds a further plus to the investment rating and its profitability.
Furthermore, the company has been increasing its revenues and profitability especially in the year 2013, when the profits rose to $9.2 billion, as reported in the COP’s financial statements. There is no doubt that it is America’s 3rd biggest energy company by asset base. According to Oil and Gas journals
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Bad projects, an increase in exploration costs and commercial non viability of some projects was among the few reasons for the loss.
The year 2014 has been a bad year for some oil and gas companies and has destroyed their performance. However, big companies like ConocoPhillips were able to survive the slump due to their smart strategies and effective hedging techniques. As a result, minimum level of shareholders’ risk was positive news for many potential investors seeking a position in this company.
The oil price collapse only saves those companies that have diversified operations and asset base with strong financial performance. High cash piles also benefit such companies in times of crisis. However, it is assumed that oil prices will rebound within the next year and a half as there has been oversupply of oil recently. The higher demand in future years will move the price upwards for crude

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