ConocoPhillips' High-Quality Assets: Key to Long-Term Profitability?

ConocoPhillips COP, a leading exploration and production company in the United States, is involved in the exploration and production of crude oil, natural gas liquids, bitumen and natural gas. The company boasts a strong asset base in the shale basins of the United States, including the Delaware Basin, Midland Basin, Eagle Ford and Bakken shale. These assets support low-cost production, which enables ConocoPhillips to maintain its profitability and generate free cash flow even during periods of low oil prices.

According to a report by Statista.com, breakeven prices for U.S. energy firms operating in the Permian Basin can range from $30-$40 per barrel. ConocoPhillips’ high-quality, low-cost assets can support operations at a break-even cost as low as $40 per barrel WTI cost. This implies that even in a challenging commodity price environment, COP can maintain stable performance. Furthermore, the company’s acquisition of Marathon Oil has enhanced its upstream asset base by adding significant high-quality, low-cost inventoryin the U.S. Lower 48.

COP’s high-quality, low-cost portfolio of assets in the shale basins of the United States enhances the company’s production capabilities at competitive breakeven costs. The company mentioned that it continues to prioritize investments in its high-quality portfolio to unlock additional value that should support profitability and growth in the long run.

Here's How ExxonMobil and EOG Resources Stay Profitable

Exxon Mobil Corporation XOM and EOG Resources, Inc. EOG are two global energy firms that can thrive even during periods of low oil prices.

ExxonMobil’s advantaged assets in the Permian Basin of the United States and Guyana, with low breakeven costs, should support its bottom-line profitability. The company mentioned on its recent earnings call that it plans to lower its break-even costs to $35 per barrel by 2027 and $30 per barrel by 2030. In other words, even if crude oil prices reduce significantly, XOM will be able to maintain its financial performance and generate profits.

EOG Resources is a leading independent exploration and production company with operations focused on the prolific acres in the United States as well as several resource-rich international basins. EOG boasts a high-return, low-decline asset base and stands out among the low-cost producers in the United States. The company’s focus on maintaining a resilient balance sheet and lowering production costs should enable it to weather oil price volatility.

COP’s Price Performance, Valuation & Estimates

Shares of COP have plunged 9.1% over the past year compared with the 13.1% decline of the industry.

From a valuation standpoint, COP trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 5.3x. This is below the broader industry average of 11.02x.

The Zacks Consensus Estimate for COP’s 2025 earnings has been revised downward over the past seven days.

COP, XOM and EOG currently carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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