ConocoPhillipssaid on Thursday thatCEORyanLancewill retire after 14 years, with CFO Andy O’Brien set to succeed him on September 1 after theoiland gasproducerposted better-than-expected quarterlyprofit.
The departure caps a tumultuous period forConocoPhillips. The companycut 20-25% of its workforcein September after it hired management consulting firm Boston Consulting Group to advise on the restructuring.
Lancetook responsibility for the job cuts at the time, telling employees that the company had become less competitive as it focused on swallowing smaller rivals.ConocoPhillipsstruck two multibillion-dollar deals in recent years: buying smaller peer MarathonOilin 2024 for $22.5 billion and acquiringConcho Resourcesfor $9.7 billion in 2021. It also acquiredPermian assetsfromoilmajor Shellfor $9.5 billion.
Despite those challenges, the company on Thursday posted its highest net incomesince2022on the back of sturdyoilprices in recent months, which have also boosted otheroilmajors like ExxonMobilXOM.Nand Chevron CorpCVX.N.
Shares ofConocoPhillips, the largest U.S. independentoiland gasproducer, rose about 1% to $116.13 at midday.
“This has been coming for a while.Ryan’s done, I think, a great job … It’s a volatile environment and the financial results are good, the Marathon acquisition’s mostly integrated and you’ve got Andy — a well-tenured executive,” said Dan Pickering, chief investment officer at Pickering Energy Partners.
Fourteen years at the helm
Lancetook the helm of the company in 2012 afterConocoPhillipssplit from refining business Phillips 66PSX.N, leaving it as a pure exploration and production company.
During his tenure,ConocoPhillipsemerged as one of the largest independentoiland gasproducers globally, with operations spanning North America,Europe, the Asia-Pacific region andthe Middle East.
Lancealso oversaw a series of major portfolio moves, including the sale of billions of dollars of noncore assets following the 2014oilprice collapse and massiveoilprice drops in 2020 after the COVID-19 pandemic crushed demand.
O’Brien takes over as CEO
Lancewill become executive chair and O’Brien will take over asCEOon September 1, the company said. Konnie Haynes-Welsh, who joinedConocoPhillipsin 2012 as a finance vice president and controller, will become senior vice president and chief financial officer.
“Andy (O’Brien) very much fits the mold of a large company executive — thinks before he talks, measured,” Pickering said. “He’s managed and handled a lot of different roles and responsibilities within the company. He understands the technical nature of whatConocoPhillipsis doing, and he’s very familiar with the assets.”
Current and former employees described O’Brien as smart, driven and thorough, with one saying he was unafraid to make difficult decisions. He joined the company in 1997 and has held roles in finance, planning and strategy, in addition to overseeing the company’s Alaskan and international businesses, commercial, LNG and mergers and acquisitions.
Amid the other leadership changes, Khoa Dao, currently chief commercial officer, will become the senior vice president of commercial and strategy, according to an internal company memo seen by Reuters.
“I don’t see any change in COP’s strategy under O’Brien as O’Brien had been in lock-step withRyanon all key strategic decisions … I believe O’Brien is the right person to lead the company going forward,” said Simon Wong, a portfolio manager at Gabelli Funds
The company recently agreed to acquire a 42% stake in a joint venture in the Kirkukoilfields in northern Iraq and signed an agreement to re-enter Syria.
Second-quarter results exceed forecast
ConocoPhillipsposted an adjustedprofitof $3.24 per share for the second quarter ended June 30, beating average analyst estimates of $2.88 per share, according to data compiled by LSEG. Revenue rose 32.4% to $19.5 billion in the quarter, beating estimates of $18.8 billion.
Production dipped nearly 6% to 2.25 million barrels ofoilequivalent per day (boepd), however, while the company’s average realized price was $62.33 per barrel ofoilequivalent (boe), 36% higher than a year earlier.
Rivalproducers Occidental Petroleumand Diamondbackas well asoilmajors Chevronand Exxon Mobil have all reported multiyear highprofits on the back of highoilprices stemming from the Iran war.
ConocoPhillipsshares have gained over 24% so far this year, largely in line with Diamondback’s stock, but weaker than Occidental’s, which has risen about 37.5%.
Benchmark Brent crudeaveraged about $93.58 per barrel during the April-to-June period, up more than 32% from a year earlier, driven by geopolitical tensions in the Middle East that raised concerns about globaloilsupplies.
The company forecast third-quarter production between 2.29 million boepd and 2.32 million boepd.
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