Those reports are more like misinterpretation, more to do with their GoM Ops for now. Got the same email from CN. Conoco's conf call was interesting (as was Shell, BP, Exxon & Anadarko's for that matter last Thu-Fri many more due this week).
Have attached the relevant bits from the Q&A (apologies for the font sizing).
.... In Other International the Athena rig from Angola has arrived in Senegal where we expect to conduct a six well exploration and appraisal program starting now and extending into next year. And in Libya, production remains shut-in as a result of the ongoing regional instability.
.... We also announced our plan to further reduce deepwater exploration spending and began implementing a phased exit. As previously announced we booked the rig termination fee this quarter.
.... Despite our stated plans to reduce deepwater exploration spending over time we're continuing to fund activity based on existing commitments while we also progress possible monetization options. This is important for protecting the value we've created from our existing program.
That's helpful. Thanks, Matt.
And then I wanted to dive into thoughts around capital allocation and the deepwater portfolio a little bit more, specifically on development capital towards deepwater and offshore. But do you have flexibility to slow your offshore development capex next year, the year after and is that something that you would consider in this environment at this point in time?
Matt Fox - ConocoPhillips - EVP, Exploration and Production
We have announced that we're going to be exiting deepwater exploration, although we do have quite a significant program that we're executing next year. Development of the discoveries that we have in deepwater is quite some way off and we may choose to stay with those developments but we may choose to exit before development happens there. So really what we're in just now is a ramping down of exploration commitments and continuing appraisal on the existing discoveries. We're not at a development stage yet.
Since your last update. I will go with a follow-up which is kind of related but you said here that you're in a phased exit of deepwater exploration. I assume that means that you'll be selling out of positions and that will form part of the disposal program that you've talked about which is very significant, I think $1 billion to $2 billion a year.
I would assume that that's a phased exit which will sort of be a one-way street. Once you've left you'll be gone and I would also anticipate that would involve selling leases. I know you've got a major position for example in the Gulf of Mexico. Am I heading in the right direction here in terms of how you're looking at this? Thanks.
Matt Fox - ConocoPhillips - EVP, Exploration and Production
Yes, that's right, Paul.
Paul Sankey - Wolfe Research - Analyst
Can you just remind us how big your position is in the Gulf of Mexico? Because I know it's top three.
Matt Fox - ConocoPhillips - EVP, Exploration and Production
In the Gulf we've got about 2.2 million acres in the Gulf and three existing discoveries and our intention is to not be doing deepwater exploration by 2017. And those acreage positions that we hold that we don't intend to drill we will be marketing those positions.
Paul Sankey - Wolfe Research - Analyst
Yes, understood. And that becomes then as I said and you sort of agreed, I hope I didn't trap you, that that becomes a one-way street. I mean effectively over time you're simply leaving the deepwater and won't come back.
Matt Fox - ConocoPhillips - EVP, Exploration and Production
That's right. This is a strategic decision to leave -- to exit deepwater exploration. That's exactly right.
Roger Read - Wells Fargo Securities, LLC - Analyst
Hi, good morning. I guess come back around on the Gulf of Mexico or just deepwater in general you mentioned earlier on the call you had a further appraisal in Shenandoah. Should we think of the exit of exploration also including the exit of not yet developed but partially explored?
Matt Fox - ConocoPhillips - EVP, Exploration and Production
Possibly but only if we get full value for it. We're willing to stay in our discoveries if that's what maximizes the value. But we haven't made a commitment to exit deepwater per se but it's the deepwater exploration but if we saw full value for those assets then we'd certainly consider that.
Roger Read - Wells Fargo Securities, LLC - Analyst
Okay. And can you give us an idea of what the capital flexibility is once you're away from deepwater exploration or any other type of exploration you're not planning to do by 2017? And then if I understood correctly it doesn't sound like the oil sands necessarily gets incremental capex and we can presume that there is not another LNG project. So as we look at the total capex number sort of as I guess a starting point for when you talk about it in December where we can see that capex flexibility that could come back in to the shale plays in future years?
Matt Fox - ConocoPhillips - EVP, Exploration and Production
Well I guess to give you a bit of a preview of the 2016 budget we expect to spend about $800 million in 2016 in the deepwater exploration and appraisal space. And so that's the order of magnitude on the capital side that we wouldn't be spending if we weren't doing deepwater exploration and appraisal for one year. And then there's G&G and G&A associated with that as well.
(20min delay)