In the event of a Takeover offer, page-34

Oppenheimer’s Fadel Gheit and Luis Amadeo consider the impact of ConocoPhillips’ (COP) capex plans and production goals on its dividend:

ConocoPhillips​

ConocoPhillips reiterated its production growth guidance of 2-3% this year, despite sharply lower capital spending in response to low oil prices. Based on benchmark strip Brent crude prices of $63.26/b this year and $70.61/b next year, we expect ConocoPhillips to generate operating cash flow of $9.67B and $13.29B, which would partially fund $11.5B CAPEX and $3.6B dividend. Accordingly, we expect ConocoPhillips to face free cash flow deficit of $5.5B this year and $1.8B next year, before asset sales and acquisitions, which could be funded by additional borrowing. ConocoPhillips has made dividend a top priority and has sufficient financial flexibility to bridge the budget gap during the current industry downturn