On November 22, 2024, ConocoPhillips completed its acquisition of Marathon Oil, adding high-quality, low cost of supply, development opportunities to its existing Lower 48 portfolio and additional LNG capacity to its global LNG portfolio through Equatorial Guinea. This acquisition is expected to generate $1 billion in synergies on a run rate basis within the first full year following the close of the transaction.

In conjunction with the announcement of our acquisition of Marathon Oil, the company communicated a disposition target of approximately $2 billion of assets across the portfolio. This indicates a strategic focus on optimizing the asset base and potentially improving capital efficiency.

In the third quarter of 2024, ConocoPhillips added to its global LNG portfolio through agreements that provide additional access to European and Asian natural gas markets by entering into an 18-year agreement securing regasification capacity at Zeebrugge LNG terminal in Belgium and a long-term LNG sales agreement into Asia. This demonstrates a commitment to expanding its presence in the global LNG market.

The Lower 48 segment achieved record production of 1,152 MBOED in 2024. This indicates successful operational execution and efficient resource management within this key segment.

International projects reached several key operational milestones, including first production ahead of schedule at Eldfisk North in Norway, Nuna in Alaska and Bohai Phase 5 in China. This demonstrates effective project management and operational efficiency across diverse geographic regions.

In the fourth quarter of 2024, ConocoPhillips completed strategic debt transactions, which simplified its capital structure, extended the debt portfolio's weighted average maturity, lowered its weighted average coupon and reduced near-term maturities. This indicates proactive financial management and a focus on optimizing the company's capital structure.

The company's operating results and ability to execute its strategy are exposed to the effects of volatile commodity prices or prolonged periods of low commodity prices. Commodity prices are tied to market prices that can fluctuate widely due to factors beyond the company's control.

The company's framework for managing climate-related business risk is set out in its Climate Risk Strategy, which describes its strategic flexibility, approach to reducing Scope 1 and 2 emissions intensity, technology choices and engagement efforts. However, the ability to achieve the stated targets, goals and ambitions within the Climate Risk Strategy's framework is subject to a number of risks and uncertainties beyond the company's control.

Estimates of crude oil, bitumen, natural gas and NGL reserves are imprecise and may be subject to revision, and any material change in the factors and assumptions underlying our estimates of crude oil, bitumen, natural gas and NGL reserves could impair the quantity and value of those reserves.

The exploration and production of crude oil, bitumen, natural gas and NGLs is a highly competitive business. We compete with private, public and state-owned companies in all facets of the exploration and production business, including locating, acquiring and developing new sources of supply and producing crude oil, bitumen, natural gas and NGLs in an efficient, cost-effective manner.

The company anticipates the oil and gas industry will face additional competition from alternative fuels. We must also compete for the materials, equipment, services, employees and other personnel necessary to conduct our business.

ConocoPhillips is one of the world's leading E&P companies based on both production and reserves, with a globally diversified asset portfolio. This provides a competitive advantage, allowing the company to mitigate risks associated with specific regions or commodity types.

The Surmont oil sands leases are located south of Fort McMurray, Alberta. Surmont is a 100 percent working interest asset that offers sustained, long-life production. We are focused on keeping facilities full, structurally lowering costs, reducing GHG intensity and optimizing asset performance.

Controlling our costs, without compromising safety or environmental stewardship, is a high priority. Using various methodologies, we monitor costs monthly, on an absolute-dollar basis and a per-unit basis and report to management. Managing costs is critical to maintaining a competitive position in our cyclical industry and positively impacts our ability to deliver strong cash from operations.

Our realized bitumen price increased 14 percent from an average of $42.15 per barrel in 2023 to $47.92 per barrel in 2024. The increase was driven by narrowing WCS differentials due to Trans Mountain Expansion project egress, tightening Russian sanctions impacting global heavy oil supply and improving heavy oil demand in Asia. We continue to optimize bitumen price realizations through optimizing diluent recovery unit operation, blending and transportation strategies.

We have several technology programs that improve our ability to develop unconventional reservoirs, increase recovery from our legacy fields, improve the efficiency of our exploration program, produce heavy oil economically with lower emissions and implement sustainability measures.

We are the second-largest LNG liquefaction technology provider globally. Our Optimized Cascade® LNG liquefaction technology has been licensed for use in 28 LNG trains around the world, with FEED studies ongoing for additional trains.

We continue to focus on implementing emissions reduction projects across our global portfolio, including operational efficiency measures and methane and flaring reductions. For example, since 2021 we have conducted CCS and electrification studies, initiated zero/low emission equipment design enhancements, installed mechanisms to continuously monitor and detect methane emissions and implemented operation changes to reduce or eliminate flaring and methane venting volumes.

In February 2025, ConocoPhillips announced its 2025 planned return of capital to shareholders of $10 billion, at current commodity prices, through its return of capital framework. This demonstrates a commitment to returning value to shareholders.

The company's goal is to optimize free cash flow by exercising capital discipline, controlling costs, and safely and reliably delivering production. The company expects to make capital investments sufficient to at least sustain production throughout the price cycles.

In 2024, ConocoPhillips completed its acquisition of Marathon Oil and additional working interest in Alaska, as well as signed additional LNG regasification and sales agreements. In 2024, the company also signed an agreement to divest certain noncore assets in its Lower 48 segment. This demonstrates active portfolio management to enhance long-term value.

Recognizing the importance of ESG performance to our stakeholders and company success, we have a governance structure that extends from the board of directors to executive leadership and business unit managers.

In early 2021, we established a multidisciplinary Low Carbon Technologies organization with the remit of supporting our emissions reduction objectives, understanding the alternative energy landscape and prioritizing opportunities for future competitive investment.

Achieved the Oil and Gas Methane Partnership 2.0 Gold Standard designation in 2024, showing that we are progressing toward our Scope 1 and Scope 2 emissions intensity targets.

At ConocoPhillips, we anticipate that commodity prices will continue to be cyclical and volatile, and our view is that a successful business strategy in the E&P industry must be resilient in lower price environments while also retaining upside during periods of higher prices.

We are unhedged, remain committed to our disciplined investment framework and continually monitor market fundamentals, including the impacts associated with geopolitical tensions and conflicts, global demand for our products, oil and gas inventory levels, governmental policies, inflation and supply chain disruptions.

As discussed herein, our operations are subject to extensive governmental regulations across numerous jurisdictions. From time to time, regulatory agencies have imposed price controls and limitations on production by restricting the rate of flow of crude oil, bitumen, natural gas and NGLs wells below actual production capacity.