Q2 FY26 · Ended Jun 30, 2026 · View SEC filing
Profit doubled while the company produced less
Price rose and most costs held still, so a higher realized price passed almost straight through to earnings.
For investorsWhat this level of profit depends on from here
For foundersWhat a founder can take from a business that refuses to hedge
Price rose and most costs held still, so a higher realized price passed almost straight through to earnings.
The average realized price was $62.33 per barrel of oil equivalent against $45.77 a year earlier, and crude realized $99.40 a barrel against $64.23, a rise the filing ties to Middle East supply disruptions. Production fell to 2,248 MBOED from 2,391 MBOED. Sales still rose 36.8% to $19.2B.1
Costs barely moved. Production and operating expenses fell 5.5% to $2.4B, which the filing attributes primarily to increased efficiencies, and depreciation, depletion and amortization rose 5.1% to $3.0B. Pretax income rose 101.6% to $6.1B, 31.7% of sales against 21.5% a year earlier. Net income was $3.9B against $2.0B.1
Fewer shares then split the larger profit. Diluted shares averaged 1,214M against 1,259M a year earlier, so diluted earnings per share of $3.23 against $1.56 rose faster than net income.1
AnalysisAnalysis: this is operating leverage in its plainest form. When most of the cost of a barrel is set by geology and capital already spent, a change in price lands almost entirely in profit. The company does not hedge, so the same mechanism works in reverse when prices fall.
The charge for capital already sunk exceeds day-to-day field costs, and it is rising while output falls.
Depreciation, depletion and amortization was $2,983M in the quarter against production and operating expenses of $2,431M, or 122.7%. A year earlier the same comparison was 110.3%, on $2,838M against $2,572M. Depletion took 15.6% of sales.1
The filing attributes the higher charge to higher depletion rates, driven by higher book values from the final allocation of the Marathon Oil purchase price and by lower proved developed reserves at the end of 2025. Production fell to 2,248 MBOED from 2,391 MBOED, which it puts down primarily to normal field decline, partly offset by new wells.1
AnalysisAnalysis: depletion is the accounting echo of a shale-weighted portfolio. Wells that produce most of their oil early must be replaced constantly, so the capital needed to stand still shows up as a large non-cash charge. A rising rate on falling volume means each remaining barrel carries more past investment.
AnalysisCaveat: part of the rise is an accounting effect of the Marathon Oil acquisition rather than a change in the fields themselves, so the ratio overstates how much harder the barrels have become to produce. The direction, with output falling and the rate rising, is the part the filing's own words support.
Gas prices fell while crude rose, so the quarter's gain came from oil and gas barely registered in sales.
Crude oil brought in $14.3B of $19.2B in sales, 74.5%. Natural gas brought in $1,149M, 6.0%, and natural gas liquids $1,117M, 5.8%. The rest, $2.6B or 13.7%, is bitumen, power and LNG.1
The two prices moved apart. Crude realized $99.40 a barrel against $64.23 a year earlier, while natural gas realized $2.58 per thousand cubic feet against $4.16, which the filing links to rising US production and a well-supplied market. The onshore US supplies 74% of the company's natural gas production and 69% of its liquids.1
AnalysisAnalysis: gas volumes are substantial but their dollar weight is small at these prices, so in its earnings the company behaves like an oil producer. That is why the LNG strategy matters: it is a route to sell gas into markets that price it higher than the US does today.
Growth, profitability and cash over the years, where ConocoPhillips stands among its peers, and where its profit is made.
How the model works, where every $100 of revenue goes against the industry, and how long the company took to scale.
Ten years of filings where the company has them, each against its peers.
Growth against margin in each company's latest full year; the size of a dot is its revenue. Hover a dot to read it, click to open it.
ConocoPhillips, FY2025: revenue +7.7% on the year, operating margin —. Triangles sit beyond the axes; their figures are in the tooltip.
The mechanisms behind the numbers. Pick one to read it.
The company carries oil and gas price risk in full rather than hedging it. The bet is that a low cost of supply and a strong balance sheet let it ride out the troughs and keep the whole upside.
What needs scale, what a startup can take, and how to test itRevenue grew 0.3x from FY2007 to FY2025. The pins mark each doubling of the first year shown.
Every figure is computed from the companies' own filings. Peers are the Energy companies covered, each from its latest report, which is not a market and not a market share. A description of the business, never a view on its shares.
Revenue went from $187.4B in FY2007 to $58.9B in FY2025, over 18 years.
Capital expenditure is drawn below the axis as cash out. Cash conversion is operating cash flow over net income, shown in the tooltip for years with a profit.
Each breakdown the filing reports, as shares of revenue, for every period it restates.
Segment Disclosures and Related Information - Summary of Segment Level Net Income (Loss) (Details). The filing restates this breakdown for 1 period.
Click a member to isolate it across the years shown.
Margins, cash and growth for the period, each with what it was computed from.
Every breakdown the filing reports for the period, with each item's share.
| L48 | $13.0B | 68.0% |
| Emena | $2.3B | 11.9% |
| Alaska | $1.9B | 9.8% |
| Canada | $1.3B | 6.8% |
| AP | $674.0M | 3.5% |
| Corporate | $6.0M | 0.0% |
Source10-Q, us-gaap:Revenues, as reported in the 10-Q filed 2026-08-06
| Operating Segments And Corporate Nonsegment | $19.8B | 103.3% |
| Operating Segments | $19.8B | 103.2% |
| Intersegment eliminations | -$633.0M | -3.3% |
These items do not sum to total revenue; the filing states them beside it. Source10-Q, us-gaap:Revenues, as reported in the 10-Q filed 2026-08-06
| Crude oil | $14.3B | 74.5% |
| Other | $2.6B | 13.7% |
These items do not sum to total revenue; the filing states them beside it. Source10-Q, us-gaap:Revenues, as reported in the 10-Q filed 2026-08-06
| Natural gas | $1.1B | 6.0% |
| Natural gas liquids | $1.1B | 5.8% |
These items do not sum to total revenue; the filing states them beside it. Source10-Q, us-gaap:Revenues, as reported in the 10-Q filed 2026-08-06
The cost lines beneath operating income, each as a share of revenue, then the operating result.
The filing's cost lines could not be read beneath operating income.
From the text of the filing rather than its statements, each with the sentence that states it.
Crude ($ per BBL) 99.40 64.23 55 %
Gas ($ per MCF) 2.58 4.16 (38) %
Total ($ per BOE) 62.33 45.77 36 %
During the second quarter of 2026, we entered into certain commercial LNG agreements, expanding our commercial offtake from 10.2 MTPA to 12.2 MTPA.
ConocoPhillips is one of the world's leading E&P companies based on production and reserves, with operations and activities in 15 countries.
Headquartered in Houston, Texas, at June 30, 2026, we employed approximately 9,600 people worldwide and had total assets of $124 billion.
Delivered total company and Lower 48 production of 2,248 MBOED and 1,479 MBOED, respectively
As of June 30, 2026, the Lower 48 contributed 69 percent of our consolidated liquids production and 74 percent of our consolidated natural gas production.
As of June 30, 2026, the Lower 48 contributed 69 percent of our consolidated liquids production and 74 percent of our consolidated natural gas production.
Production was 2,248 MBOED in the second quarter of 2026, a decrease of 143 MBOED from the same period a year ago.
The income statement, cash flow statement and balance sheet in the company's own order and words. Every line links to the filing.
Year to date, as a quarterly filing reports it.
| Line | Q2 FY2026 | A year earlier | Change | Source |
|---|---|---|---|---|
| Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||||
| Depreciation, depletion and amortization | $2.98B | $2.84B | +5.1% | Source10-Q, us-gaap:DepreciationDepletionAndAmortization, as reported in the 10-Q filed 2026-08-06 |
| Impairments | $2.0M | $1.0M | +100% | Source10-Q, us-gaap:AssetImpairmentCharges, as reported in the 10-Q filed 2026-08-06 |
| Accretion on discounted liabilities | $99.0M | $95.0M | +4.2% | Source10-Q, us-gaap:AccretionExpenseIncludingAssetRetirementObligations, as reported in the 10-Q filed 2026-08-06 |
| (Gain) loss on dispositions (shown as a deduction) | ($14.0M) | $317.0M | -96% | Source10-Q, us-gaap:GainLossOnSaleOfPropertyPlantEquipment, as reported in the 10-Q filed 2026-08-06 |
| Statement of Cash Flows | ||||
| Cash, cash equivalents and restricted cash at end of period | $6.97B | $5.23B | +33% | Source10-Q, us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents, as reported in the 10-Q filed 2026-08-06 |
Most output comes from short-cycle onshore US wells, so spending can adjust quickly when prices move.
The onshore US segment produced 1,479 MBOED of 2,248 MBOED, 65.8%, and booked $13.0B of sales, 68.0% of the total. The filing says more than half of the quarter's capital spending went to flexible, short-cycle unconventional plays there.1
AnalysisAnalysis: shale wells cost relatively little each and can be started or paused far faster than offshore or oil sands projects. That flexibility is what makes an unhedged strategy tolerable: when prices fall, spending can fall with them, while Alaska and the LNG ventures provide longer-lived volume underneath.
Operating cash was 1.89 times net income, because the large depletion charge reflects capital already spent.
Operating cash flow was $7.4B in the quarter against net income of $3.9B, 1.89 times. A year earlier operating cash flow was $3.5B against net income of $2.0B.1
Diluted shares averaged 1,214M against 1,259M a year earlier. The filing describes a return framework built on a growing ordinary dividend and share repurchases through the cycle, set as a share of cash from operating activities.1
AnalysisAnalysis: cash ahead of profit funds both the drilling that offsets decline and the buybacks that shrink the share count. It is not free cash. Much of it must go back into wells to hold output, and the quarter's capital spending cannot be separated from the year-to-date figures in this record.
Unhedged, the company keeps the upside of a price spike and would take the reversal just as directly.
The filing ties the higher crude price to Middle East supply disruptions that began in the first quarter and persisted through the second, and states plainly that the company is unhedged. It names volatile prices, including prolonged periods of low prices, as its leading risk, with possible impairments of long-lived assets, leaseholds and equity investments.1
The cycle has already shown its range. Annual sales were $18.8B in 2020 with a net loss of $2.7B, and $78.5B in 2022 with net income of $18.7B. This quarter's sales of $19.2B exceeded the whole of 2020.1
AnalysisAnalysis: the fixed cost base that turned a higher price into doubled profit works the same way downward. Efficiency gains help, but they are small beside the price swing: production and operating expenses fell 5.5% while sales rose 36.8%.
The company is adding LNG offtake while the gas it sells fetched less and its LNG affiliates earned less.
The filing says new agreements in the quarter expanded commercial LNG offtake to 12.2 MTPA, and that the company increased future purchase obligations for long-term LNG offtake contracts and vessels. Its realized gas price was $2.58 per thousand cubic feet against $4.16 a year earlier.1
Equity in earnings of affiliates, which include the Qatar and Australia LNG ventures, fell 24.1% to $239M from $315M. The filing says Qatar production remained constrained through the quarter amid the conflict involving Iran, with no damage and no indication of impairment, and that further escalation could hurt operations, LNG transportation and construction.1
AnalysisAnalysis: long-term offtake pays when the spread between US gas and global LNG prices stays wide enough to cover the contracted capacity. The commitments are fixed while the spread is not, and affiliate earnings and commercial results are where a narrowing would show first.
Member research on this company.
What ConocoPhillips's numbers depend on from here, read from the filing: the conditions behind this period's margins and growth, and where a change would show first.
AnalysisThis quarter's earnings rest on a crude price the filing links to a supply disruption. For earnings at this level to hold, that disruption or something like it would have to persist. The company itself expects prices to remain "cyclical and volatile", and it does not hedge, so the reverse move would pass through just as directly.1
AnalysisLower operating costs arrived in a quarter when revenue made everything look good. Whether they are structural shows only when prices fall. The announced cost and margin programme would have to keep unit costs falling in a quarter where price gives no help for the efficiency story to stand on its own.
AnalysisOutput is shrinking from field decline faster than new wells replace it, and higher depletion rates follow lower proved developed reserves. For volume to stabilise, the Alaska developments, the LNG ventures and the new Iraq and Syria agreements would have to add barrels before decline compounds. The gap between reported and depletion-adjusted growth is the line to read each quarter.
AnalysisThe company is signing long-term LNG offtake and shipping commitments while the US gas it produces realizes a low price. That only pays if the spread between US gas and global LNG prices stays wide enough to cover the contracted capacity. Equity earnings from the LNG affiliates and the commercial margin on that offtake are where the result would show.
AnalysisQatar production remained constrained, with no damage and no indication of impairment reported. A longer constraint would show first in equity earnings of affiliates, then in the timing of the projects under construction there. Any change in that wording in the next filing would matter more than the quarter's price.1
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Business Lens describes ConocoPhillips from its own filings with the SEC. It is not a view on its shares, a target, or advice to buy, sell or hold anything; figures are as filed and may be restated by the company later. The filing, the dates and the version are under the financial data above.
