Welcome to the second quarter 2026 ConocoPhillips earnings conference call. My name is Liz, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press star one one on your touch-tone phone. I will now turn the call over to Guy Baber, Vice President, Investor Relations. Sir, you may begin. Thank you, Liz, welcome everyone to our second quarter 2026 earnings conference call. On the call today are several members of the ConocoPhillips leadership team, including Ryan Lance, Chairman and Chief Executive Officer; Andy O'Brien, Chief Financial Officer and Executive Vice President of Strategy and Commercial; Nick Olds, Executive Vice President of Lower 48 and Global HSE; and Kirk Johnson, Executive Vice President of Global Operations and Technical Functions. Ryan and Andy will kick off the call this morning with opening remarks, after which the team will be available for your questions. As a reminder, for the question-and-answer portion, we will be taking one question per caller, consistent with our normal practice. A few other quick reminders. First, along with today's release, we published supplemental financial materials and a slide presentation, which you can find on the investor relations website. Second, during this call, we will make forward-looking statements based on current expectations. Actual results may differ due to factors noted in today's release and in our periodic SEC filings. We'll make reference to some non-GAAP financial measures. Reconciliations to the nearest corresponding GAAP measure can be found in today's release and on our website. With that, I'll turn the call over to Ryan. Thank you, Guy, thank you to everyone for joining our second quarter 2026 earnings conference call. Before I get into our quarterly results, I want to acknowledge the other announcement we made this morning, that I will be retiring as Chief Executive Officer effective September first. I've spent more than 40 years at ConocoPhillips and have had the honor of leading the company for the past 14 years. We have some of the most talented employees in the industry, together we have positioned the company for long-term success with a track record of delivering superior returns on and of capital through the cycles. I'm incredibly proud of what we've accomplished together. I'm also excited that Andy will assume the role of President and Chief Executive Officer. You all know Andy well already. He's been with the company almost 30 years. I don't need to list his credentials, but I do want to take the opportunity to call out the valuable contributions he's already made, helping to shape our company and strategy. His leadership experience and deep understanding of our business make him well positioned to lead the company forward, and I have full confidence in him and the leadership team he has chosen. I will assume a transitional role of Executive Chairman to support a smooth leadership transition. Andy will have full accountability for leading the company and managing day-to-day operations. I want to thank our employees and the board for their confidence they have shown in me over the years, and our shareholders for their continued confidence in ConocoPhillips. Let me now turn to the results for the quarter. ConocoPhillips delivered strong second quarter results. Production was above the high end of our guidance range, with our peer-leading Permian position achieving a new record of over 900,000 bpd. We generated over $4 billion of free cash flow, and we increased shareholder distributions to $3 billion, doubling our share repurchases from the prior quarter. We also made meaningful progress on strategic initiatives that further strengthen our portfolio and support long-term value creation. We achieved our $5 billion disposition target ahead of schedule, expanded our commercial LNG offtake portfolio, and added new growth opportunities in the Middle East at an attractive cost of supply. Simply put, ConocoPhillips is in a stronger position than ever before. We have the highest quality asset base in the sector, with the deepest and most capitally efficient Lower 48 inventory and a diversified portfolio of low cost of supply legacy assets. We are executing well and driving continuous improvement. Our balance sheet is rock solid with leverage well below 1x and cash of more than $8 billion. We continue to lead the peer group in returning capital to shareholders, as we've done in the last decade. Our cost reduction program is progressing ahead of plan. Our LNG projects will begin contributing in 2027, and Willow continues to hit all key milestones in advance of first oil in early 2029. We remain firmly on track to deliver our $7 billion free cash flow inflection by 2029, effectively doubling last year's total free cash flow. All of this is made possible by the best people in the business, and I'm pleased to transition our leadership of the company with us being in such a strong position. With that, let me turn the call to Andy to discuss our second quarter results and outlook in more detail. Thank you, Ryan. Thanks to you and the board for the confidence that you've shown in me. I'm excited to step into the role of President and Chief Executive Officer. The company's never been in a better position, with a great portfolio and a strong foundation. Thanks to Ryan's leadership and our world-class workforce. Kirk and Nick will remain important members of the Executive Leadership Team and trusted partners as we move forward, continuing in their roles overseeing our operations I'm pleased to welcome Konnie Haynes-Welsh to the team, our new Chief Financial Officer. She'll be a great addition as we build on the strong foundation already in place. I'm also looking forward to working with our broader organization as we continue executing with the same discipline and focus that has served us so well. Turning now to our second quarter performance, we produced 2,248,000 bpd. That was above the high end of our guidance, driven by strong operational performance across our global portfolio, including record Permian production. We generated $3.24 per share in adjusted earnings. Cash flow from operations was $7.2 billion. After $3 billion of CapEx, that translated into $4.2 billion of free cash flow. We increased our second quarter shareholder distributions to $3 billion. That included doubling share repurchases to $2 billion, plus $1 billion of ordinary dividends. We ended the quarter with $8.1 billion of cash and short-term investments, along with $1.2 billion of liquid long-term investments. In short, this was another quarter of exceptional operational and financial execution. Turning to our outlook, our full-year guidance items are unchanged. We remain on track to deliver our plan. For distributions, we continue to target returning 45% of our Chief Financial Officer to shareholders this year. We averaged about 40% for the first half, meaning we expect to increase the distribution percentage over the second half of the year. For third quarter production, our guidance range is 2,290,000 bpd- 2,320,000 bpd. This improvement from the second quarter is driven by a production ramp in Qatar and continued Lower 48 growth. This more than offsets the impact of non-core asset sales of 15,000 bpd in July. Now let me walk you through the three strategic updates: the completion of our disposition program, the additions to our commercial LNG portfolio, and our new international opportunities. First, we achieved our $5 billion disposition target ahead of schedule, with $1.7 billion of non-core Lower 48 asset sales in July. We were really pleased with the value we captured for these assets. While this completes our announced disposition program, disciplined portfolio management remains central to how we run ConocoPhillips. We'll continue to high-grade and optimize our portfolio. That work never stops. Second, we recently signed two LNG offtake agreements, each for one million tons per annum, one in Indonesia and one on the U.S. Gulf Coast. These additions bring our total offtake to 12 million tons per annum. Mark another important step in scaling this business. Our commercial LNG strategy builds on our global scale and decades of resource LNG experience, allowing us to move lower-value natural gas into premium-priced international markets while maintaining full value chain control to maximize margins through the cycle. Third, we signed strategic agreements for low-cost supply growth opportunities in Iraq and Syria. This builds on the improved fiscal terms we signed in Libya earlier this year. These opportunities are part of a targeted and deliberate strategy to build on our advantaged, globally diversified portfolio. Each is a high-quality, long-life conventional asset with demonstrated production and meaningful redevelopment potential. They have attractive entry costs and highly competitive cost supply. These fields are already producing today, and we expect the production to largely fund the redevelopment, delivering longer-term free cash flow upside with little to no impact on our capital spending. To wrap up, our strategic priorities are unchanged. They are clear, consistent, and durable, and they have served us well for the last decade. We will continue to grow our dividend at a rate competitive with the top quartile of the S&P 500. We will protect and further strengthen our investment-grade balance sheet. We will return a significant portion of our Chief Financial Officer to shareholders right off the top. Only after meeting all these priorities, we will evaluate disciplined growth with a focus on improving our returns on capital employed. We are meeting these priorities while reinvesting to deliver a peer-leading $7 billion free cash flow inflection by 2029. That inflection is well underway. As free cash flow grows, our break-even price comes down, our reinvestment rate comes down, and our financial strength and competitive positioning further improve. Every measure moves meaningfully in the right direction. That concludes our prepared remarks. I'll now turn it back to the operator to begin the question-and-answer. Thank you. We will now begin the question- and- answer session. In the interest of time, we ask that you limit yourself to one question. If you have a question, please press star one one on your touchtone phone. If you wish to be removed from the queue, please press star one one again. If you're using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star one one on your touchtone phone. Our first question comes from Neil Mehta from Goldman Sachs. Your line is now open. Thank you, Ryan. What a great quarter to close on. Andy, congratulations, and well-deserved, on becoming the Chief Executive Officer. Ryan, you've been one of the most consequential leaders in the history of the energy industry, and it's hard to imagine that it was just 10 years ago, you had that defining Analyst Day that really laid the foundation for what the sector should look like, specifically the E&P sector. My question, Ryan, is why now? In terms of retiring, how have you thought about the approach to succession planning? Maybe bigger picture, as you reflect on your career, any advice you want to leave us all with as an investment and an energy community about how the sector can continuously improve from here? Well, thank you, Neil. A lot in that, I appreciate the kind words and really thank everybody on the call for their support personally and the confidence that you've shown in our company, we're committed to continuing that. There's probably never a good time, Succession planning has really been a fundamental part of my career and what we've done with the board. We have a very robust evergreen process to ensure that we get the right leadership at every level in the company, it's always been front of mind. I've told a number of you in the past, the very first board meeting I had with the new board when I first became Chief Executive Officer, one of the topics was succession because I swore I wasn't going to go through a process that I went through somewhere down the road. I've been in this business 42 years. I've seen a lot, that includes 14 years as the Chief Executive Officer of the company. At the moment, I love the business and we knew this moment was always going to come at some point in time. I'm proud of what we've accomplished, like I said, we've been planning for quite some time. I think in terms of the timeline, I would say three things, Neil. First, we wouldn't do this if I didn't think the company was in a strong position. As Andy outlined in his comments about the outlook and the quarter, I don't think our portfolio has ever been stronger. We're executing well on all the projects and all the exploitation that we're doing. Everything's on track. Cost reduction programs are working well, we're well on our way to delivering the $7 billion of free cash flow that we've committed that we're going to do in the company. One, I don't think the company's ever been in a stronger position, I wouldn't leave if I didn't think that was the case. Second, I think you want to know that you're turning it over to the right leader who will take the company to the next level, I'm confident that Andy is that person. He's been with me for 30 years. He's helped shape our execution, our strategy, bring strong leadership, he's played really a key role in our success that we've had to date. Third, I would say, look, I've had a 14-year run, which is phenomenal, and I've just been so proud of the team, the company, what we've accomplished. It's been through lots of ups and downs in this business. When you think about that, if I go much longer, two, three, four years, I don't give the next team at least a decade to be able to put their fingerprints and take this company onward and upward. It's an important time to do that because with Andy's leadership and the team that he's built and put around him, it's going to take our company to bigger and better place. I think now is the right time to be thinking about that and doing this. My advice, look, this is such an important business in the world. We play at the middle of sustainability, of energy security and national security. No matter where you go around the world, it's a really important business. There'll be ups and there'll be downs. It's got some cycle time to the business. It demands investors and people like yourself that take confidence in the company, take confidence in the management team, confidence in the portfolio, and the execution that we're executing and hang with us. We're going to be here a long time. It's an important business. It's an important industry. We've all seen why energy security is becoming concerns for countries around the whole world. I think what we're doing is really important to the world. It's important with this AI revolution that's coming, and we're going to benefit from that as well. We just got to increase the interest, and us, we have to perform. We need to get back to a higher percentage of the S&P 500. To do that, you got to compete against the S&P 500, and that's what we intend to do at ConocoPhillips. Thank you for the kind words, Neil. Really appreciate it, and thanks for your confidence and advice over the years. Our next question comes from Stephen Richardson from Evercore ISI. Your line is now open. Thank you. Ryan, you've left an indelible mark on the industry and all of us who are involved. Thank you for that and your voice on these calls will be missed. Thank you, Stephen. Andy, appreciate the prepared remarks, I would love for you to expand a little, particularly about your vision for ConocoPhillips and where you aspire to take the organization in the next couple of years. Yeah. Thanks, Stephen. Appreciate the question. Let me just start with sort of where Ryan ended. I've been very fortunate to have the opportunity to be involved in really all the major strategic decisions that we've made over the past decade. That should give you confidence that the key pillars of our strategy will remain unchanged. Our cost of supply focus, the capital allocation framework, our commitment to competitive and improving returns on and off capital, and our focus on disciplined execution, that's not changing. What I would say is, don't confuse consistency of strategy with complacency. The goal of this leadership team is going to be to raise the bar on our performance and unlock even more value, but within our long-held capital allocation framework that works so well. We see tremendous potential for the company as we move into the next stage. Top of mind is that our priorities are straightforward. We've got to keep executing the plan. We've got to deliver on major projects and cost reduction program that underpin our $7 billion free cash flow inflection. That is on track. That is going to be sort of hyper-focused for the team and myself. We will continue high-grading the portfolio. That's something that we've spoken about a lot in the past, and you think how our portfolio has changed over the years. We don't look at the assets as being static. We make sure all of our assets over time compete on a cost of supply base in our portfolio. Portfolio high-grading is something that you will see continue at ConocoPhillips. That's really important for us. We're going to look for additional ways to really improve our returns within our existing framework. I think you'll see a fair bit of continuity. It's not about one big change. It's about the cumulative impact of disciplined execution, continuous improvement, our strong behaviors, and the organization that we have that drives value. We have that. We have world-class employees, and their ability to innovate and drive improvement is a key part of how we're going to continue to unlock value as we go forward. Our next question comes from Phillip Jungwirth from BMO Capital Markets. Your line is now open. Thanks. Also congrats, Ryan, on your retirement and really positioning the company exceptionally well for the long term. Also great to see Andy's appointment to Chief Executive Officer next month. For the question, just wanted to touch on Qatar and get an update with what you're seeing there across the producing assets and also the NFE and NFS projects. You did reiterate full-year production guidance despite the divestitures and Qatar not being fully back here in the third quarter. Just wondering what the risking or assumptions are around Qatar returning. Yeah. Good morning, Phil. This is Kirk. Yeah, certainly, as you're pointing out, there's been quite a bit of flux and forward-looking, certainly some uncertainty as it relates to the conflict and the impacts that are playing out for us with Qatar. As you saw in the second quarter, Ras Laffan was largely shut in, although we did see some pretty limited volumes coming out of that business, and that was as you'd expect. It's a function of the ramp down that took place early in the quarter. Naturally, there's a need to support local demand and consumption there in country. They were able to achieve some of that, certainly through our train. The planned turnaround that we had premised there in the second quarter, we were able to successfully execute a bit of upside here, glass half full, taking advantage of the downtime that did exist there at Ras Laffan. We were able to get that work done so that as that train is expected to ramp up certainly over the next forward-looking quarter here in three Q, we can be in a strong position of high uptime and execution coming out of that downtime. Certainly, as you're inquiring, looking into the third quarter, our guidance does assume a ramp across the quarter. Naturally, there's a fair bit of obvious uncertainty around the pace of the ramp, as well as just overall throughput through the quarter. What we've done is just capture that within the uncertainty range that exists there in our total company and our guidance with respect to Qatar. Now, if I move forward then into NFE and NFS, it can oftentimes get conflated with the downtime and some of the issues that we've had naturally around production with the Strait being closed. Those projects were progressing well prior to the conflict, and they continued to progress really quite nicely through the conflict, especially the onshore build-out of the liquefaction trains. Naturally, of course, we're careful to always defer to QatarEnergy on formal updates, but what we're seeing from the schedule, the productivity we're seeing coming out of that, we're expecting any delays that may come on first gas or first cargo to be in the nature of months, not a full year. We're not expecting any delays coming out of those projects to meaningfully impact our free cash flow that we're continuing to see progress through the next couple of years. Strong confidence in what we're expecting coming out of Qatar. Our next question comes from Doug Leggate from Wolfe Research. Your line is now open. Thanks. Good morning, everyone. Ryan, bit of an end of an era here, I guess my biggest takeaway is that there's hope for Guy Baber yet, right? Given that Andy used to run. Yeah. Well, I'm gonna miss the banter, Doug. Well, good luck to you all. My question, Andy, is look, you're still guiding $12 billion, $12.5 billion. We know that peak spending of Willow's still ahead. The critical path, it seems to us, to get to that huge free cash flow inflection is that spending comes down when Willow comes up. My question is simply this: Is that the plan or is there another major reset in long-term CapEx that causes that spending not to come down? If the answer is no, then the free cash flow inflection is kind of baked in. The market doesn't yet seem to have confidence in it, at least from our discussion. That's my question. Again, good luck to you all. Congratulations. Yeah. Thanks, Doug. Let me just start with a correction. Peak CapEx of Willow is behind us. To the first part of your answer is we passed the peak of Willow. The second part of your answer, we absolutely expect our CapEx to move lower from here, particularly as Willow comes online early in 2029. The short answer is yes, CapEx comes down. I think that's only part of the story, and I think the bigger part of the story is what's happening to our reinvestment rate and our breakeven. Both of those come down structurally. Our free cash flow breakevens move from the mid-40s WTI today to the low 30s by 2029. Perhaps we don't talk about this enough, but the other side of that coin is obviously a lower reinvestment rate. We're meaningfully moving this in the right direction. We're improving the financial strength and the flexibility of the company. That's going to enable us over time to return more capital to our shareholders. Now, I do want to say that we don't have expectations that we're going to go to zero growth capital maintenance levels once the order is set up. We'll continue to invest in our Lower 48 portfolio, and our ANI portfolio, but for modest growth. I want to emphasize, and I can't emphasize this strongly enough, that's at a structurally lower reinvestment rate than where we are today. I would add, Doug, that we get some of this feedback as well. You guys, everybody knows us well enough. We have a high said-did ratio. We don't say things we don't intend to go do. When we put out the $7 billion free cash flow inflection, you can count that Andy, we're all, and Andy's team is going to deliver that. There's two parts to that. The Chief Financial Officer is going to go up, clearly, as these projects come online, but the capital is coming down. We're going to have choices and options, even post-Willow startup, around what we do with the free cash flow that we're generating. It's going to be significant. It starts by just making sure that we get these projects online. You heard Kirk talk about LNG and the Willow question, it's on track. We're seeing the cost reductions that we expect to get, and we're going to see the capital reductions that we expect between now and when Willow gets started up. Our next question comes from Lloyd Byrne from Jefferies. Your line is now open. Great. Good afternoon, everyone. Hall of Fame career, Ryan. You'll be missed. Andy, congrats. Thank you. We have a lot of confidence in you and your team. It's really strong. Thanks. I want to focus on Alaska. I wanted to discuss what you can say about the exploration results, the four-well NPRA program, and then when will we get those estimates given the public data ruling, and then maybe what it means for the implications of the plateau at Willow, just the potential out there. Yeah. Great question, Lloyd. Good morning. Certainly, I'll start with the first part of your question, specifically on the exploration program and what we can share. Well, certainly, I'd probably point you back even to the last quarter. Coming out of that exploration season, it was sufficiently encouraging that we were all willing to declare, Ryan, myself, that we will positively be bringing more resources into Willow, into the existing infrastructure that we have there on the North Slope, in advance of even drilling more wells. Really quite positive. Naturally, we're still working through what those results are. Again, I always try to remind folks that it takes more than one well, typically takes at least another appraisal well to confirm our development plans. Really quite positive in how we think about what those four wells came out to show us. With that, then, of course, we've steered ourselves and our eyes are already focused on next year's program in 2027 and the winter season that confines our activity and exploration. We've already started field surveying, I think well locations and ice roads. Then we've very importantly submitted our federal permit applications, which are required well in advance of us putting ice out there to begin drilling. When I talk about federal permits, I should really make a bit of a side comment here and acknowledge the Trump administration's actions that have been continuously supporting the development of domestic resources. Certainly in Alaska, as I'm pointing you all towards, but even in the Lower 48. That's showing up, it's demonstrated through ongoing permit reform efforts on the federal leases, specifically in Alaska. Of course, we're seeing a wealth of participation in the recent lease sales there in Alaska, as well as even in the Lower 48. We're pleased with the outcome of the NPRA lease sale. The acreage that we picked up is a natural bolt-on to our large existing position that we have there in NPRA. We also see it as a really positive move with strong interest from our peer companies. From our view, increased activity, naturally, it's good for the state of Alaska, but it's really good for all of us. It improves the utilization of the fixed infrastructure, ours as well as others, the service industry infrastructure in such a remote area. That creates new efficiencies for ourselves and everyone else. Again, we see all of this as really positive news. If I continue to bring this back to your ending question, how does this play out for us against Willow? This lease sale, as well as our multi-year exploration program that we have been and will continue to execute, lays the groundwork for us to continue to leverage Willow and that infrastructure we're building there for decades into the future. You've seen this from us before. This is our playbook. We've been doing this with Kuparuk and with Alpine. These new satellite pads that will eventually come from the exploration program and from these lease sales will fold into our program well into the future. Naturally, there's going to be years of plateau in Willow post first oil, and then once ullage or capacity starts to show up well into the 2030s, we'll be in a really strong position to start bringing in more oil from these satellite pads. I'm going to continue to reinforce something that you've heard from Ryan and from Andy just earlier this morning, which is our capital is going to come down. Post first oil, capital is moving back into a very ratable expectation that you've seen from historical averages from us in the past. Our reinvestment rates in Alaska have consistently been in the 30s, and you should expect that from us post first oil well into the future. All of this continues to underpin and preserve our confidence in this free cash flow inflection that ultimately culminates with Willow in 2029. Really expect from us to be laying the groundwork for us to use this infrastructure for decades into the future. I'd step back. Lloyd just did a 20,000 foot and support some of what Kirk was saying about this administration and their policies that really are strengthening our energy security and dominance here in the U.S. The permitting efficiencies that Kirk is talking about, the better regulatory certainty, and this regular cadence of lease sales is not only benefiting our company, but it's benefiting the industry as well. The whole administration support is kind of just advancing these developments that help meet the energy demand that we know is increasing. It's the Willow project. Kirk talked about the exploration sale and NPRA and the interest that brought back to Alaska. We saw the lease sales in New Mexico and North Dakota here earlier this year, and a regular cadence of those, even in the deep water, has been helpful. It's helped us get record production in the Permian, and we're leaning in on investments on LNG side on the Gulf Coast of Texas. All those things are just helping to contribute to a positive investment climate that we see from this administration. It's been helping Alaska, and it's helping our company in lots of different areas, and I know helping this industry as well. Our next question comes from Scott Hanold from RBC Capital Markets. Your line is now open. Yeah, thanks. I want to give my congrats to you as well, Ryan, Andy, and Connie, on everything going on. For my question, I was wondering if I could delve into shareholder returns a little bit. Obviously, Andy, as you indicated, there's going to be a big step up here in the second half of the year. How do you envision that happening with buybacks? Is it going to be ratable, or are you going to be opportunistic with the incremental? If you could further provide some context, as you start seeing that free cash flow inflection increase, we're doubling our free cash flow, like, in a few years. What is the plan with that payout ratio? If you stay at the 45% payout ratio, that's a pretty large quantity. Do you guys think you'll eventually feather back to sort of the baseline that you have out there? Thanks, Scott. A couple of things to cover there on the short term and then the medium and longer term. I think as I said in my prepared remarks, we averaged about 40% of our payout for the first half of the year. We're continuing to basically guide to 45% for the full year. You can do the math on how you get if you started with 40% and you end with 45%, what's going to happen in the second half of the year? We remain committed to the 45%. We don't choose to manage this quarter to quarter. All the volatility we've been seeing in commodity price has been a pretty good reminder of why we don't do that. I'm not going to try to guide sort of daily, weekly, monthly what we're going to be doing. I'm just going to reaffirm that the 45% of our Chief Financial Officer is what we're shooting for for this year. As we look beyond this year, and your question is as we start getting this free cash flow inflection and a materially lower reinvestment rate, and as Ryan and I have described, we're not predicting a big ramping CapEx here, that kind of starts to sort of narrow down where does that cash go? I don't think we're contemplating feathering it back to any note. It's more we're going to be in a much more flexibility as these projects come online to basically look at our commitment. We think our peer-leading distribution and the way we've set the company up to have the assets, the portfolio to drive that reinvestment rate allows us to stay peer leading with our distributions, and I really don't see that changing. Our next question comes from Arun Jayaram from JPMorgan. Your line is now open. Yeah. Good morning, gentlemen. Ryan, congratulations. You're one of a kind. When the history books are written on U.S. energy, U.S. shale, you will deservedly have a couple of really important chapters. Well, thank you, Arun. Andy, I also want to express my congratulations to you. You're clearly the right person to lead Conoco in terms of the next stage of the company. My question is really regarding some of the recent news flow we've gotten from the Middle East. In particular, I was wondering if you could highlight some of the opportunity set in Iraq at the Kirkuk field. Love to hear a little bit more about this transaction, and how should we think about this in terms of this transaction and your 2029 free cash flow inflection? Well, thank you for your comments, yeah, happy to take that question. I'm actually going to maybe just broaden it a little bit and sort of maybe talk about Iraq and Syria, because there's a lot of similarities to what we've got here. They share pretty similar characteristics. What we're targeting here is large resource bases with low entry costs, competitive cost supplies, and then structures, very importantly, that become self-funding relatively quickly. Kirkuk, let's look at that one a bit more specifically. Kind of a few sort of important points to note here. First, the structure, the contract structure is attractive. Those of us who've been around a while will remember some of the old legacy technical service contracts in Iraq. This is not that. Under this agreement, we receive a share of the incremental production, the reserves, and we recover our costs. Second, as I've said before, the capital here is actually pretty modest in terms of us getting into this. We currently expect sort of this to close, the Iraq transaction with Kirkuk around year-end, and we expect the acquisition capital to be in the $300 million-$500 million at close. Very importantly, that includes our share of historical costs spent to date. It also includes our expectation of costs from now to the end of the year. As we think about this longer term, we actually expect this joint venture to fund its own activity from its own cash flows. No to little capital expenditures for ConocoPhillips is our base case here. That's all interesting in terms of the structure and the funding. Most importantly, this asset competes really well within our portfolio. The opportunities are comfortably within our cost supply thresholds. We're looking at cost supply here around $30 bbl, and again, with long-term resource upside. That's the Kirkuk opportunity. Then in Syria, you saw a couple of announcements there, too. The opportunities here are a bit on the smaller side, yet they share the basic characteristics of what I just described for Iraq. They provide us a lot of long-term optionality. Then we've also got a long history, ConocoPhillips, in Syria. That goes back several decades. We know the country well, and we know the upside that's there. As I try to wrap it up, what I'll say is that the common denominator here is that we're stepping into existing, previously producing assets that are underdeveloped, and where the redevelopment then can be funded largely from the assets on cash flow with a goal of really preserving our capital efficiency. We see this as having limited to no impact on our capital program. When we think about our $7 billion free cash flow inflection we laid out in 2029, that's not impacted by this at all. In fact, what we see this as is upside to that in the future. Again, I think these are great adds to our portfolio, and I think they fit really nicely within what we described earlier of our strategy about how we always high grade the portfolio and are looking for assets that meet the characteristics that we like and add them into our portfolio. Within the framework, that's the key part, within the framework of how we manage our capital programs. Our next question comes from Sam Margolin with Wells Fargo. Your line is now open. Hi. Thanks for taking the question. I'm not going to be able to beat the prior congratulatory remarks, I'll just say thanks for being a great ambassador to the space and helping to rise the tide. Thank you. Not necessary, Sam. Thanks. All right. Maybe we can take another level down into this reinvestment rate and payout ratio theme, because it is, as other analysts have said on the call, it is the most frequent question that comes back to us from the investment community. Conoco has an opportunity to be a peer leader in regular dividend growth, not just because of the cash flow inflection, but also because of the composition and the production mix that's changing. Right? You'll have less unconventional as a% of your total production. What are your thoughts, Andy, if you can put your Chief Executive Officer and Chief Financial Officer hat on at the same time on just any friction or points of conflict in taking that position as a leader in regular dividend growth if you worry about dividend break even or the overall dividend burden, or if you think that that's very much in play. Thank you. Yeah. Great question. I think you framed it up in terms of the things that we obviously think about when we think about dividend growth. I'd start with, again, continuity statement. We already have peer-leading top quartile S&P 500 dividend growth. That's not changing. That's the plan. I absolutely, with the team, look really closely at what does it do when we basically increase the dividend, what's happening to our break even? As we described earlier, with the CapEx coming down, the Chief Financial Officer growing up, our free cash flow break even is structurally reducing. That's very constructive for the dividend. We also look very closely at our buyback program. I know you guys look at the dividend per share, in terms of how much we're raising that. I look very closely at the absolute dividend burden. Having the buyback program is very helpful when we are increasing the dividends, we have been in that top quartile, 8%+ type range. When we are buying back 5% of our stock on average each year, that is making it much more viable that we can keep doing that without having big impact on the burden. Yes, we look at the dividend burden. We look at the break-even impact. All of those things look really positive. We feel very confident about the way we are growing the dividend on the top quartile with the S&P 500 and fully expect us to carry on with that strategy. While you did not say it necessarily specifically, Sam, Andy referred to the share buyback program, and maybe some of the criticism we get a little bit is we are procyclically buying shares. We do not believe that. When we deliver $7 billion of free cash flow over the course of the next two, three years, we believe our share price is got to improve with a doubling of that free cash flow. We do not believe that we are procyclically buying our shares, which is an important part of our return of capital thesis. That is only going to get more flexibility as the top-line Chief Financial Officer continues to grow. Our next question comes from Betty Jiang from Barclays. Your line is now open. Hi, good morning. I guess I will just pile on the congratulations and wholeheartedly agree with everything that has been said so far. My question is on LNG, just given the headline today to add 2 million tons per annum, one in Southeast Asia, in Indonesia, one in Gulf Coast. Just wondering about the strategic rationale to add the Indonesia piece and how that fits into the Gulf Coast portfolio. Stepping out, clearly market is pretty constructive on LNG fundamentals for the next few years, but there is still debate around balances further out as the new supply coming to the market. Just would love some thoughts on the through-cycle earning power of this growing LNG marketing portfolio that you have built. Good morning, Betty. Let me just jump in there on the first part of your question. Yes, we added another 2 million tons of offtake. One in Indonesia was off the Bontang North Hub field. We had another one on the Gulf Coast. Just stepping back in terms of our strategy a little bit. That's unchanged. The majority of our offtake is coming from the Gulf Coast, and we positioned ourselves to have that low-cost supply with high quality, low liquefaction fees. A lot of that's, or most of that's from the Gulf Coast. What we're doing here is we're supplementing it with some Pacific Basin supply. Again, that's low cost of supply too. This was always part of our strategy. We don't expect to have a huge amount of our portfolio in the Pacific Basin. The reason we really like to have some is it kind of is very beneficial for us, and particularly our commercial organization, and the flexibility it provides as we start thinking about how we optimize the portfolio, think about when we're doing substitution and diversion. Having some LNG on the Pacific side is very helpful for just the overall optimization. It's not a change in our strategy. It's really just a tool to make sure that we can optimize and get the best margins. To the second part of your question around, yes, you look where prices are right now. They are very constructive. The way I'm going to answer this is I'm going to take a bit of a step back to sort of our views where we were prior to the war with Iran. We were a bit of an outlier in that we were always constructive on LNG demand and LNG pricing. We've been saying for quite some time that we think it's the part of the energy complex that's going to grow the most. It's going to double between here and 2050. We've always had a view that the pricing for LNG is going to be pretty constructive, and that's why we're building the portfolio we are. Just like our E&P portfolio, low cost supply wins in E&P, and in this world, think of low liquefaction fee as the version of low cost supply. We're making sure that we're building a portfolio that is very competitive. We expect over the long run that we'll be making pretty significant cash flow from these assets. We know there'll be some volatility over time, but we think that the price risk here is very much asymmetric to the upside. When we do see prices move, they tend to move a lot more on the upside than the downside. That is something that attracts us to this. Just to put it in context. For every $1 in MMBtu that we see in margin, on a 5 MTPA, that's about $200 million of cash flow for us. As we build this portfolio up sort of to that 10 million-15 million MTPA, and we start seeing those kind of margins increase, this is a very material cash flow engine for ConocoPhillips. We think this is a really important part of the energy complex for us to have a big stake in. Our next question comes from Josh Silverstein from UBS. Your line is now open. Yeah. Thanks everybody, and congratulations to both Andy and to Ryan as well. Andy, maybe for you, looking forward, I'm curious how you're thinking about the portfolio mix. The Lower 48 has gone up to around 65% of the production base and, with Willow and LNG ramping up over the next few years, maybe that comes down a little bit. I was curious how you see the balance of maybe unconventionals versus conventionals, if you want to look at it that way, and maybe was the entry into Iraq, Libya and Syria kind of deliberate to get you a little bit more balanced towards conventionals as well going forward? Thanks. Yeah, thanks. The way we think about it is somewhat agnostic, basically on where the resource comes from. We're going to look for the best cost of supply assets that we can find. Now that said, all things being equal, it's pretty nice to be able to balance some conventional in with the large and growing unconventional position we have. Things like Willow, things like NFE, things like NFS, things like we've done in Iraq, and even going back a bit further, some of the things we did where we increased our working interest in Surmont, and we took more equity in APLNG. These are all things that help balance that portfolio. We look at the assets basically in terms of do they compete on a cost of supply basis? When they do compete on a cost of supply basis, we then like to have that mix. As you say, it really does help us with giving us an advantage on our decline rate versus others. It helps with our reinvestment rate versus a pure unconventional company. We're not going to overreach and do something that isn't competitive just because it's not unconventional. We look for the best opportunities, and I'm pretty pleased with how we've been able to balance the portfolio with the big transactions that we were able to do in the unconventional to grow that position. Sometimes some of the ones we do on the conventional side sort of slip under the radar a little bit because they're smaller, but they've accumulated to quite big numbers. Of course, when we bring Willow on, that makes another material difference. I certainly like having that diversity in the portfolio. I think it helps us drive our reinvestment rate down. I think you'll see that continue. Not at expensive. We're not going to go and do something that doesn't compete on a cost of supply. That's exactly as how I described Iraq earlier, is that it ticks all the boxes from the structure, but first, second, and third thing that's important is it competes on a cost of supply basis. I think that's how the team and I are going to keep looking at this going forward. Our next question comes from James West from Melius Research. Your line is now open. Hey, good morning everyone. Ryan, congrats on a great 14-year run as Chief Executive Officer, I'm glad you're going to get some time to work on your golf game now. Thanks. Congrats to Andy and Konnie as well. Thank you. I guess my question follows along a bit with that portfolio strategy question. As we look at kind of the last couple of quarters, especially this quarter with some big moves into the Middle East, should we expect a similar type of cadence of kind of new projects as we go quarter to quarter or year to year going forward? Or will there be some slowing as you have molded the story around dividend growth and a free cash flow significant ramp coming? This has certainly been a pretty busy quarter, I don't want to set an expectation that we're going to do what we've done with Iraq and Syria and dispositions to the extent we have this quarter every quarter. I'm going to steal Nick's line when it comes to Lower 48 production sometimes. It's lumpy. Things come, sometimes they come in bunches. I wouldn't read into this quarter's activity as sort of a sign that we're going to be doing this kind of activity every quarter. Our teams, we're looking at things. The Middle East is certainly an interesting space right now with a lot of activity and we're one of the few companies that can really compete in that space. We're one of the few companies that sort of know how to be nimble and make that work. Yes, it's an area we're looking at. I go back to the strategy answer I gave. It's got to fit within that framework and our strategy and our capital structure, our reinvestment rate. Everything we're doing is really to enhance that. We're not going to break that structure. As these opportunities come along, that's what they're being evaluated against. It's the same on the disposition side. As we look at the portfolio, we formally achieved our $5 billion target, that doesn't mean that discipline looking at the portfolio stops. That's something that we do every day in the team. I think the short answer is it was a busy quarter. Please don't expect the exact same level of activity every quarter, but our teams are always looking for the right opportunities for ConocoPhillips. Our next question comes from Gabe Daoud from Truist Securities. Your line is now open. Thanks, operator. Afternoon, everyone, and congrats to Ryan and Andy as well. I just wanted to maybe ask about Lower 48 and any particular technologies that you guys are testing around improving productivity or recovery factors, particularly in the Permian. Would also, I guess, just love generally an update around the Lower 48 and what you guys are working on. Thank you. You bet, Gabe. Good morning. Well, let's start with on the technology side. We are testing a range of technologies with a clear objective to not only improve recovery, but more importantly, improve capital efficiency, as Andy just mentioned. Meaning that fewer dollars spent per barrel of oil on an EUR basis. We're seeing really encouraging results from real-time fracture diagnostics where we can optimize our completions on stage by stage. We're using surfactants in far field diverter applications. I may provide a little bit more detail on the real-time fracture optimization that allows us to optimize frack designs on the fly. We're seeing, we're adjusting stage volumes up to ±30% to improve reservoir contact and recovery. That's given us the potential to cut completion costs and improve cost of supply. In fact, we've seen adjustments up to 60% of the frack stages for a well versus the original basis of design. On the far field diverters, we've seen that work extremely well in the Eagle Ford. That's where we can divert frack energy away from offset wells, and keeping the frack in the near targeted wellbore, reducing runaway fractures or what we call frack hits, and that's improving recovery as well. Finally, we've heard a lot about surfactants out there. We have been testing fit-for-purpose surfactants and we're seeing encouraging results in the Permian over the last 12 months, where we've seen cumulative oil volumes and lower water oil ratios. In fact, we're realizing a range of results, but up to 20% uplift in oil productivity for a treated versus untreated well. We'll need to look at the longer term performance and how that plays out, but very encouraging early results. As a reminder, when you look at these results, the biggest driver on productivity and recovery is still rock quality, and we have peer-leading tier 1 inventory depth across the 4 basins that we operate in. This is where we really see the differential, Gabe, is as a broader shale industry matures, that rock quality advantage should translate into even wider capital efficiency advantages in our peer group. Couple other items on capital efficiencies that we've been really leaning into this year is really lateral lengths is a key driver for that. We're increasing our average lateral length by 15% this year compared to 2025. In fact, we've doubled the number of three-mile laterals or greater this year as well. If you specifically look at the Permian, all of our wells that we're bringing online this year are greater than two miles with several three and four-mile laterals being drilled. As we talked about last year, that 15% improvement in D&C efficiencies, that's more feet per day, more stages per day, that continues into 2026. We're seeing that through continuous pumping, auto frack, semi frack, and remote frack. Just hats off to the team. They're really executing well. You obviously seen it. Ryan and Andy talked about the Permian production record. We hit 920,000 in second quarter, and that was a key driver for our outperformance and just seeing really just strong base and development well performance. Teams are executing well. In fact, if you look at that outperformance over the first half of 2026, Permian production was 10% year-on-year underlying basis. That's actually stronger than any peer, major E&P. Yeah, just bottom line, executing well and hats off to our teams. Thank you. Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.