ConocoPhillips said on Thursday that CEO Ryan Lance will retire after 14 years, with CFO Andy O’Brien set to succeed him on September 1 after the oil and gas producer posted better-than-expected quarterly profit.
The departure caps a tumultuous period for ConocoPhillips. The company cut 20-25 per cent of its workforce in September after it hired management consulting firm Boston Consulting Group to advise on the restructuring.
Lance took responsibility for the job cuts at the time, telling employees that the company had become less competitive as it focused on swallowing smaller rivals. ConocoPhillips struck two multibillion-dollar deals in recent years: buying smaller peer Marathon Oil in 2024 for $22.5 billion and acquiring Concho Resources for $9.7 billion in 2021. It also acquired Permian assets from oil major Shell SHEL.L for $9.5 billion.
Despite those challenges, the company on Thursday posted its highest net income since 2022 on the back of sturdy oil prices in recent months, which have also boosted other oil majors like ExxonMobil XOM.N and Chevron Corp CVX.N.
Shares of ConocoPhillips, the largest U.S. independent oil and gas producer, were up about 0.8 per cent at $115.83 in afternoon trading.
“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
Lance took the helm of the company in 2012 after ConocoPhillips split from refining business Phillips 66 PSX.N, leaving it as a pure exploration and production company. He has been with the company for over 40 years.
During his tenure, ConocoPhillips emerged as one of the largest independent oil and gas producers globally, with operations spanning North America, Europe, the Asia-Pacific region and the Middle East.
Lance also oversaw a series of major portfolio moves, including the sale of billions of dollars of noncore assets following the 2014 oil price collapse and massive oil price drops in 2020 after the COVID-19 pandemic crushed demand.
ConocoPhillips’ stock has outperformed peers over the course of his tenure as CEO, behind only EOG Resources and ahead of larger rivals ExxonMobil and Chevron.
O’BRIEN TAKES OVER AS CEO
Lance will become executive chair and O’Brien will take over as CEO on September 1, the company said. Konnie Haynes-Welsh, who joined ConocoPhillips in 2012 as a finance vice president and controller, will become senior vice president and chief financial officer.
The key pillars of ConocoPhillips’ strategy will remain unchanged, O’Brien said in an earnings conference call. He added that a cost-reduction program and improving the quality of the company’s portfolio would be his main focus.
“Don’t confuse consistency of strategy with complacency,” O’Brien said. “It’s not about one big change.”
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.
“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 what ConocoPhillips is doing, and he’s very familiar with the assets.”
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.
SECOND-QUARTER RESULTS EXCEED FORECASTS
ConocoPhillips posted an adjusted profit of $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 per cent to $19.5 billion in the quarter, beating estimates of $18.8 billion.
Production dipped nearly 6 per cent to 2.25 million barrels of oil equivalent per day (boepd), however, while the company’s average realized price was $62.33 per barrel of oil equivalent (boe), 36 per cent higher than a year earlier. Permian Basin output rose to a record of more than 900,000 barrels of oil equivalent per day in the second quarter.
Rival producers Occidental Petroleum OXY.N and Diamondback FANG.O as well as oil majors Chevron CVX.N and Exxon Mobil have all reported multi-year high profits on the back of high oil prices stemming from the Iran war.
ConocoPhillips shares have gained over 24 per cent so far this year, largely in line with Diamondback’s stock, but weaker than Occidental’s, which has risen about 37.5 per cent.
Benchmark Brent crude LCOc1 averaged about $93.58 per barrel during the April-to-June period, up more than 32 per cent from a year earlier, driven by geopolitical tensions in the Middle East that raised concerns about global oil supplies.
The company forecast third-quarter production between 2.29 million boepd and 2.32 million boepd.
The company’s cost-savings plan is progressing ahead of schedule, Lance said on the call.
The company recently agreed to acquire a 42 per cent stake in a joint venture in the Kirkuk oilfields in northern Iraq and signed an agreement to re-enter Syria. It has also launched an exploration program in Alaska.
(Reporting by Arathy Somasekhar and Georgina McCartney in Houston and Pooja Menon in Bengaluru; Editing by Nathan Crooks, Will Dunham and Matthew Lewis)
