Headquartered in Houston, Texas, ConocoPhillips is engaged in the exploration and production of oil and gas. The company was established in 2002 following the merger of major historical oil companies: Conoco and Phillips Petroleum. The merger ensured that the newly formed company became a member of Big Oil (a term used to describe 7 of the largest publicly traded oil companies), and with operations in 15 countries, ConocoPhillips is currently the largest independent exploration and production company in the world based on production and proved reserves.
A product of a merger itself, ConocoPhillips has always been an active player in the mergers and acquisition pool. Early on, the company was practically involved in the entire oil value chain. But it quickly made divestitures of downstream assets so as to focus on being a predominantly upstream company. Some of the notable divestments include the sale of Circle K Corp. and Mobil-branded gasoline stations.
By 2012, ConocoPhillips had completely spun off its downstream operations as Phillips 66, a separate new company that engaged in refining and marketing oil and petroleum products. ConocoPhillips has remained a willing and strategic buyer, as illustrated by the January 2021 acquisition of Concho Resources for over $9.7 billion.
In addition to maintaining an active portfolio, ConocoPhillips has also leveraged technology and data analytics to lower its production costs in the volatile oil industry. As such, the company has one of the widest low-cost resource bases among its peers that gives it a massive competitive edge.
ConocoPhillips is a publicly listed company trading on the New York Stock Exchange under the ticker symbol COP. The stock falls in the Energy sector, under the Oil & Gas E&P industry.
ConocoPhillips Stock History
Since 2002, ConocoPhillips has implemented one stock split: a 2-for-1 on the 2nd of June 2005. COP has always seen its stock reflect the fluctuating prices of oil in the international markets.
The ConocoPhillips stock traded around the $20-handle in 2002, but it picked up pace in 2003 and extended an upward rally that topped out above $70 in June 2008. The impact of the 2008 Great recession then kicked in and drove the stock to lows of below $30 by March 2009. The subsequent economic recovery saw oil prices recover and rally to peaks of circa $125 by 2014. This was a major tailwind for the COP stock which pushed to its all-time high of around $90 in June 2014.
Oil prices then started declining, and in 2016, there was a shock-crash that saw prices plunge to below $30. This influenced COP stock prices, which tumbled to circa $30 as well. The stock then recovered in tandem with oil prices and managed to print a temporary peak just below $80 in September 2018. A brief correction was then overextended as the 2020 coronavirus pandemic literally shut down the global economy. COP shares were then pressured downwards to lows of circa $25 by March 2020, but the stock then recovered and settled above $50 in 2021.
ConocoPhillips is a consistent dividend payer. The company has managed to keep its production costs low, and this means that it is able to guarantee sustainable payouts to shareholders even amidst volatility in the oil markets.
How to Trade ConocoPhillips Stock
Here are the factors to consider when trading COP stock:
- Legislative and Taxation Issues
Oil is a sensitive commodity the world over, and different jurisdictions have enacted and implemented various legislation and taxation policies as regards its circulation and consumption. As a predominantly upstream company, ConocoPhillips faces business risks in areas such as the impact on the environment, labour issues, and complex taxes.
- Negative PR and Lawsuits
ConocoPhillips was famously the first US company to join the US Climate Action Partnership in 2007, and to this date, it prides itself as a socially responsible and environmentally friendly company. But as an exploration and production company, ConocoPhillips has, on numerous occasions, generated negative headlines and attracted lawsuits that have resulted in expensive settlement payments. Negative PR and lawsuits can weigh heavily on the stock, whereas positive PR and a good image can inspire investors to back the COP stock.
- Fluctuating Commodity Prices
Commodity prices are practically the biggest price influencer of stock prices of E&P companies. Granted, ConocoPhillips has relatively low production costs (which implies a low break-even point), but low prices still limit margins and pressure stock prices lower, whereas higher prices boost margins and trigger higher prices.
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