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Is the Current Oil Price Favorable for COP's Upstream Business?
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Key Takeaways
ConocoPhillips benefits from oil prices above $60, exceeding break-even levels in key resources.
Marathon Oil acquisition expanded COP's upstream presence in U.S. shale plays like the Permian.
COP trades at 5.49X EV/EBITDA, below the industry average of 11.10X, with estimates revised higher.
West Texas Intermediate (WTI) is currently trading above the $60 per barrel mark, currently hovering around $64. Before discussing whether the pricing environment is favorable for ConocoPhillips (COP - Free Report) , let’s analyze the company’s upstream operations.
The upstream energy giant has low-cost resources both internationally and in the United States. ConocoPhillips is more confident in its resources within the United States, which it refers to as the Lower 48, comprising major shale plays like the Permian Basin, Eagle Ford and Bakken. Also, the acquisition of Marathon Oil late last year has strengthened ConocoPhillips’ upstream presence in the Lower 48. This demonstrates resilience in ConocoPhillips’ business model.
With the oil price significantly higher than the break-even price in the prolific resources where COP is operating currently, the ongoing pricing environment of the commodity is highly favorable for the company’s overall business, thereby aiding its bottom line.
Is the Current Oil Price Favorable for XOM & EOG’s Businesses?
Exxon Mobil Corporation (XOM - Free Report) and EOG Resources, Inc. (EOG - Free Report) are two leading energy players, having a significant presence in upstream businesses.
XOM has a strong presence in prolific oil and gas resources in the Permian and offshore Guyana. Advantageous volume growth from both resources has been supporting ExxonMobil’s upstream activities, which contribute to the large scale of the company’s total earnings.
Having crude reserves in the United States and Trinidad, EOG Resources is among the energy majors in the domestic market. Having operations in the leading shale plays in the United States, the company is well-positioned to capitalize on the handsome crude prices.
COP’s Price Performance, Valuation & Estimates
Shares of COP have lost 11.6% over the past year compared with the 17.7% decline of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, COP trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 5.49X. This is below the broader industry average of 11.10X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for COP’s 2025 earnings has been revised upward over the past seven days.
Image: Bigstock
Is the Current Oil Price Favorable for COP's Upstream Business?
Key Takeaways
West Texas Intermediate (WTI) is currently trading above the $60 per barrel mark, currently hovering around $64. Before discussing whether the pricing environment is favorable for ConocoPhillips (COP - Free Report) , let’s analyze the company’s upstream operations.
The upstream energy giant has low-cost resources both internationally and in the United States. ConocoPhillips is more confident in its resources within the United States, which it refers to as the Lower 48, comprising major shale plays like the Permian Basin, Eagle Ford and Bakken. Also, the acquisition of Marathon Oil late last year has strengthened ConocoPhillips’ upstream presence in the Lower 48. This demonstrates resilience in ConocoPhillips’ business model.
With the oil price significantly higher than the break-even price in the prolific resources where COP is operating currently, the ongoing pricing environment of the commodity is highly favorable for the company’s overall business, thereby aiding its bottom line.
Is the Current Oil Price Favorable for XOM & EOG’s Businesses?
Exxon Mobil Corporation (XOM - Free Report) and EOG Resources, Inc. (EOG - Free Report) are two leading energy players, having a significant presence in upstream businesses.
XOM has a strong presence in prolific oil and gas resources in the Permian and offshore Guyana. Advantageous volume growth from both resources has been supporting ExxonMobil’s upstream activities, which contribute to the large scale of the company’s total earnings.
Having crude reserves in the United States and Trinidad, EOG Resources is among the energy majors in the domestic market. Having operations in the leading shale plays in the United States, the company is well-positioned to capitalize on the handsome crude prices.
COP’s Price Performance, Valuation & Estimates
Shares of COP have lost 11.6% over the past year compared with the 17.7% decline of the composite stocks belonging to the industry.
From a valuation standpoint, COP trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 5.49X. This is below the broader industry average of 11.10X.
The Zacks Consensus Estimate for COP’s 2025 earnings has been revised upward over the past seven days.
COP stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.