ConocoPhillips Aims to Pump Up
ConocoPhillips (NYSE:COP) has set their 2013 capital spending plan at $15.8 billion, unchanged from 2012. The company, which is in the middle of reorganization, will allocate 60 percent of its capital to its North American businesses and 40 percent to Europe, reports MarketWatch.
Planned Asset Sales
The company plans to complete its asset-sales program next year, which recently included the sale of its stake in a Kazakhstan project to an India company for $5 billion, with $20 billion of planned sales still to come.
“When this program is complete, the combination of portfolio high-grading and strong ongoing investment programs will put ConocoPhillips on track to deliver on our long-term annual growth goals of 3 to 5 percent on both volumes and margins, with a compelling dividend,” the company said in a statement.
CHEAT SHEET Analysis: Debt-to-Equity Ratio is Poor
One of the core components of our CHEAT SHEET Investing Framework focuses on a company’s debt-to-equity ratio, and its no secret that ConocoPhillips is struggling. Currently the company has a debt-to-equity ratio of .45. When comparing this number to that of its competitors, Exxon Mobil (NYSE:XOM) and British Petroleum (NYSE:BP), the number isn’t as flattering as it could be. Exxon currently sports a debt/equity ratio of .07 while BP’s is closer to Conoco’s at .42. Their pseudo-fire sale of equity should place a dent in Conoco’s debt-to-equity ratio, but that won’t be until the end of 2013 at the earliest.
Over the past year, Conoco is down nearly 20 percent. However, over the past quarter it is up 2.3 percent. The free-fall from the reorganization Conoco underwent earlier this year seems to have bottomed out, and its asset-sales program looks like it will enable the company to pick itself up off the floor and resume steady growth.
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