The Rising Influence of Rising Affluence

[DewDiligence]

Musings on ConocoPhillips

COP held its annual Investor Day webcast today; the company’s PR is at http://finance.yahoo.com/news/ConocoPhillips-Continues-bw-3483036831.html?x=0&.v=1 and the webcast slides (113 pages) are at http://www.conocophillips.com/EN/investor/presentations_ccalls/Documents/Analyst%20Meeting%202011%20Slides%20color.pdf .

The only new news is that COP plans an additional $5-10B of asset sales during 2011-2012; this amount is over and above the $10B of asset sales COP earmarked 1.5 years ago (#msg-42341446). To date, COP has sold $7B of hydrocarbon assets and has liquidated its stake in Lukoil for about $8B. Thus, COP’s total asset sales since announcing the change in strategy 1.5 years ago has been about $15B and will come to $20-25B by the end of 2013 if the company follows through on its plan.

All told, I’m unimpressed with what COP is doing. COP does have some nice assets in Asian LNG, Canada’s oilsands, and liquid-rich US shales; however, I think COP’s management is second-rate (compared to say, XOM and CVX) and I do not trust them to make good decisions for shareholders. The huge asset sales COP is now undertaking would not have been necessary if the company had not overpaid for various acquisitions a few years ago.

If anyone here thinks otherwise, please let me know!