ConocoPhillips (NYSE:COP) reported stronger-than-expected second-quarter earnings on Thursday, driven by higher realised oil prices and record production from its Permian Basin operations. Shares edged higher in pre-market trading, although the company left its full-year guidance unchanged.
The steady outlook limited investor enthusiasm despite another quarter of solid operational performance.
Earnings exceed Wall Street forecasts
The oil producer posted adjusted earnings of $3.24 per share for the second quarter, comfortably ahead of analysts’ expectations of $2.85 per share.
On a GAAP basis, net income rose to $3.9 billion, or $3.23 per share, compared with $2.0 billion, or $1.56 per share, in the same period last year.
The improvement was largely driven by a 36% increase in the company’s average realised selling price, which climbed to $62.33 per barrel of oil equivalent from $45.77 a year earlier.
Production declines despite record Permian output
Total production averaged 2.248 million barrels of oil equivalent per day during the quarter, 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, as growth in the Lower 48 was more than offset by disruption linked to the Middle East conflict affecting operations in Qatar, together with higher royalty payments at Surmont.
Production from the Lower 48 reached 1.479 million barrels of oil equivalent per day, including:
- 720,000 boepd from the Delaware Basin
- 202,000 boepd from the Midland Basin
- 363,000 boepd from Eagle Ford
- 189,000 boepd from the Bakken
Management highlights operational progress
Chairman and Chief Executive Officer Ryan Lance said the company delivered “exceptional operational performance, record production from our peer-leading Permian position and disciplined execution across the business.”
Lance added the company “doubled our quarterly share repurchases, achieved our $5 billion asset disposition target ahead of schedule, secured low cost of supply opportunities in the Middle East, and increased our LNG offtake to 12 MTPA,” and remains “on track to achieve our $7 billion free cash flow inflection by 2029.”
Shareholder returns increase
ConocoPhillips doubled its quarterly share repurchase programme to $2 billion during the period.
Combined 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.
Strong balance sheet and strategic expansion
Operating cash flow before working capital movements totaled $7.2 billion.
ConocoPhillips finished the quarter with $8.1 billion in cash and short-term investments, alongside an additional $1.2 billion in long-term investments.
Strategically, the company completed the sale of non-core Lower 48 assets for $1.7 billion in July, allowing 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, and reached an agreement to re-enter Syria to restore and expand production from onshore oil fields.
Full-year outlook maintained
ConocoPhillips expects third-quarter production to range between 2.29 million and 2.32 million barrels of oil equivalent per day.
Management left all full-year guidance unchanged while continuing to target long-term free cash flow growth through operational execution and portfolio optimisation.
ConocoPhillips stock price
