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Item 1A. Risk Factors

2023-02-16 compared with 2022-02-17 · 230 added, 1178 removed, 10 unchanged (99% of the section changed)

You should carefully

consider the following risk factors

in addition to the other information

included in this Annual

Report on Form 10-K.

These risk factors are not

the only risks we face.

Our business could also be affected

additional risks and uncertainties not currently

known to us or that we currently consider

to be immaterial.

of these risks or other risks that are yet unknown

were to occur,

our business, operating results and

condition, as well as the value of an investment

in our common stock could be adversely

You should carefully consider the following risk factors in addition to the other information included in this Annual Report on Form 10-K.

These risk factors are not the only risks we face.

Our business could also be affected by additional risks and uncertainties not currently known to us or that we currently consider to be immaterial.

If any of these risks or other risks that are yet unknown or currently considered immaterial were to occur, our business, operating results and financial condition, as well as the value of an investment in our common stock, could be materially and adversely affected.

Risks Related to Our Industry

Our operating results, our ability to execute

on our strategy and the carrying value of our assets

are exposed to

the effects of changing commodity prices.

The oil and gas business is a commodity business.

Our revenues, operating results

and future rate of growth are

highly dependent on the prices we receive for

crude oil, bitumen, natural gas

Such prices can fluctuate

widely depending upon global events or conditions

that affect supply and demand, most

of which are out of our

In early 2020 global oil demand decreased precipitously

alongside global COVID-19 economic shutdowns.

Although global oil demand and global oil prices improved

through 2021, the global economic recovery

Our industry will continue to be exposed to

the effects of changing commodity prices

volatility in commodity price drivers

and the worldwide political and economic environment

continued uncertainty caused by

armed hostilities in various oil-producing regions

around the globe.

Lower crude oil, bitumen, natural gas

and NGL prices may have a material adverse

effect on our revenues,

operating income, cash flows

and liquidity, and

may also affect the amount of dividends we elect

to declare and

pay on our common stock and the amount

of shares we elect to acquire as part of the share repurchase

and the timing of such acquisitions.

Lower prices may also limit the amount of reserves we

economically,

thus adversely affecting our proved

reserves and reserve replacement ratio

and accelerating the

reduction in our existing reserve levels

as we continue production from upstream

Prolonged depressed

crude oil prices may affect certain

decisions related to our operations,

including decisions to reduce capital

investments or curtail operated

Significant reductions in crude oil, bitumen, natural

gas and NGL prices could also require us to

reduce our capital

expenditures, impair the carrying value of our

assets or discontinue the classification of certain

assets as proved

In the past three years, we recognized

several impairments, which

are described in

prices decrease relative to their current

levels, and as we continue to optimize

our investments and exercise

capital flexibility,

it is reasonably likely we could

incur future impairments to long-lived assets

used in operations,

investment in nonconsolidated

entities accounted for under the equity

method and unproved properties.

Although it is not reasonably practicable to

quantify the impact of any future impairments

or estimated change to

our unit-of-production

rates at this time, our results

of operations could be adversely affected

Our business has been, and will continue to be, adversely affected

by the coronavirus (COVID-19) pandemic.

The COVID-19 pandemic and the measures put in place to

address it have negatively

impacted the global economy,

disrupted global supply chains, reduced global demand for

oil and gas and created significant

volatility and

disruption of financial and commodity markets.

Over the course of the pandemic, public health

officials have

recommended or mandated certain

precautions to mitigate

the spread of COVID-19, including limiting non-

essential gatherings of people, ceasing all non-essential

travel and issuing “social or

physical distancing” guidelines,

“shelter-in-place” orders and

mandatory closures or reductions in capacity

for non-essential businesses.

some of these limitations and mandates have

been relaxed in certain jurisdictions,

others have been reinstated

areas that have experienced a resurgence

of COVID-19 cases and there is no guarantee

restrictions will not be

reimposed in the future.

Despite the increased availability

of vaccines in certain jurisdictions, the COVID

pandemic may continue or worsen

during the upcoming months, including as a result of the emergence

infectious variants of the virus,

vaccine hesitancy or increased business and

social activities, which may cause

governmental authorities to reinstate

restrictions.

As a result, the ongoing impact of the COVID-19 pandemic

ConocoPhillips

remains uncertain and will depend on the severity,

location and duration of the effects

and spread of the disease,

the effectiveness and duration

of actions taken by authorities to contain

the virus or treat its effect, the availability

and effectiveness of vaccines

or other treatments, and how quickly and

to what extent economic conditions

See our Human Capital Management section within Item 1 and 2—Business and Properties

, for additional

information on how we have

been impacted and the steps we have

taken in response.

Our business is likely to continue to

be further negatively impacted by the COVID

-19 pandemic.

These impacts

could include but are not limited to:

Reduced demand for our products

as a result of reductions in travel

and commerce, whether related to

mandated restrictions or otherwise;

Disruptions in our supply chain due in part to scrutiny

or embargoing of shipments from infected

invocation of force majeure

clauses in commercial contracts

due to restrictions imposed as a result

global response to the pandemic;

Failure of third-parties on which we rely,

including our suppliers, contract

manufacturers, contractors,

joint venture partners

and external business partners, to

meet their obligations to the company,

significant disruptions in their ability to do so,

which may be caused by their own financial or operational

difficulties or restrictions imposed in response

to the disease outbreak;

Reduced workforce productivity

caused by, but

not limited to, illness, travel

restrictions, quarantine, or

government mandates;

Increased challenges in retention

of personnel caused by vaccine hesitancy

and the resistance of some in

our workforce to comply with

workplace protocols necessary to ensure

the health and safety of our

workforce and minimize disruptions

to the business, such as vaccine and testing requirements,

of personal protective equipment;

Voluntary or involuntary

curtailments to support oil prices or alleviate storage

shortages for our products.

Any of these factors, or other cascading

effects of the COVID-19 pandemic that

are not currently foreseeable,

could materially increase our costs,

negatively impact our revenues and

damage our financial condition, results of

operations, cash flows and liquidity position.

Despite the rollout of vaccines, the pandemic continues

and evolve, and the full extent and

duration of any such impacts cannot

be predicted at this time because of the

sweeping impact of the COVID-19 pandemic on daily life

around the world and a lack of certainty

as to if or when

conditions will return to pre-COVID

Unless we successfully develop resources, the scope

of our business will decline, resulting in an adverse impact to

our business.

As we produce crude oil and natural

gas from our existing portfolio,

the amount of our remaining reserves

If we are not successful in replacing the crude oil and

natural gas we produce with

good prospects for

future organic opportunities or through

acquisitions, our business will decline.

In addition, our ability to

successfully develop our reserves is dependent

on a number of factors, including our ability to

obtain and renew

rights to develop and produce hydrocarbons;

Our operating results, our ability to execute on our strategy and the carrying value of our assets are exposed to the effects of changing commodity prices.

Among the most significant factors impacting the Company’s revenues, operating results and future rate of growth are the sales prices for crude oil, bitumen, LNG, natural gas and NGL.

These prices can fluctuate widely, and many of the factors influencing the prices are beyond our control.

Between January 2020 and December 2022, WTI crude oil prices ranged from a low of a negative $38 per barrel in April 2020 to a high of $124 per barrel in March 2022.

Given the volatility in commodity price drivers and the worldwide political and economic environment, including potential economic slowdowns or recessions, as well as increased uncertainty generated by recent (and potential future) armed hostilities in various oil-producing regions around the globe, prices for crude oil, bitumen, LNG, natural gas and NGLs may continue to be volatile.

Low commodity prices could have a material adverse effect on our revenues, operating income, cash flows and liquidity, and may also affect the amount of dividends we elect to declare and pay on our common stock and the amount of shares we elect to acquire as part of the share repurchase program and the timing of such acquisitions.

Lower prices may also limit the amount of reserves we can produce economically, thus adversely affecting our proved reserves and reserve replacement ratio and accelerating the reduction in our existing reserve levels as we continue production from upstream fields.

Prolonged depressed prices may affect strategic decisions related to our operations, including decisions to reduce capital investments or curtail operated production.

Significant reductions in crude oil, bitumen, LNG, natural gas and NGL prices could also require us to reduce our capital expenditures, impair the carrying value of our assets or discontinue the classification of certain assets as proved reserves.

Although it is not reasonably practicable to quantify the impact of any future impairments or estimated change to our unit-of-production rates at this time, our results of operations could be adversely affected as a result.

Unless we successfully develop resources, the scope of our business will decline, resulting in an adverse impact to our business.

As we produce crude oil, bitumen, natural gas and NGLs from our existing portfolio, the amount of our remaining reserves declines.

If we are not successful in replacing the resources we produce with good prospects for future organic development or through acquisitions, our business will decline.

In addition, our ability to successfully develop our reserves is dependent on a number of factors, including our ability to successfully navigate political and regulatory challenges to obtain and renew rights to develop and produce hydrocarbons;

our success at reservoir optimization;

to bring long-lead

time, capital intensive projects

to completion on budget and on schedule;

and our ability

to efficiently and

profitably operate mature

If we are not successful in developing the resources

in our portfolio, our

financial condition and results of operations

may be adversely affected.

The exploration and production of oil and gas is a highly comp

etitive industry.

The exploration and production

of crude oil, bitumen, natural gas and NGLs

is a highly competitive business.

compete with private, public

and state-owned companies in all

facets of the exploration and

production business,

including to locate and obtain new sources

of supply and to produce crude oil, bitumen, natural

gas and NGLs in an

efficient, cost-effective

We must compete for

the materials, equipment, services, employees

personnel (including geologists, geophysicists,

engineers and other specialists) necessary to conduct

our business.

Some of our competitors are larger

and have greater resources

than we do, or may have

established strategic

ConocoPhillips

term positions or strong governmental

or other relationships in countries

or areas in which we operate, or may

willing to incur a higher level of risk than we are willing to

incur to obtain potential sources

consequence, we may be at a competitive

disadvantage in certain respects,

such as in accessing the necessary

materials, equipment, services, resources

and personnel.

In addition, we may be at a competitive disadvantage

when competing with state-owned

companies if they are motivated

by political or other factors in making their

business decisions, with less emphasis on financial returns.

If we are not successful in our competition for

reserves, our financial condition and results

of operations may be adversely

Any material change in the factors and assumptions

underlying our estimates of crude oil, bitumen, natural gas

and NGL reserves could impair the quantity and value of those reserves.

Our proved reserve information

included in this annual report represents

management’s best estimates

assumptions, as of a specified date, of the volumes

to be recovered from underground

accumulations of crude oil,

bitumen, natural gas and NGLs.

Such volumes cannot be directly measured and the

estimates and underlying

assumptions used by management are subject to

substantial risk and uncertainty.

Any material changes in the

factors and assumptions underlying

our estimates of these items could result

in a material negative impact to the

volume of reserves reported or could

cause us to incur impairment expenses on property

associated with the

production of those reserves.

Future reserve revisions could also

result from changes in, among other things,

governmental regulation.

Our business may be adversely affected by price controls,

government-imposed limitations on production

exports of crude oil, bitumen, natural gas and NGLs, or the unavailability of adequate

gathering, processing,

compression, transportation, and pipeline facilities and

equipment for our production of crude oil, bitumen,

natural gas and NGLs.

As discussed herein, our operations

are subject to extensive governmental

From time to time,

regulatory agencies have imposed

price controls and limitations

on production by restricting the rate

crude oil, bitumen, natural gas and

NGL wells below actual production capacity.

Similarly, in response

domestic energy costs, circumstances

determined to be in the economic interest

of the country,

or a declared

national emergency,

government could restrict

the export of our products which would

adversely impact

our domestic business.

Because legal requirements are frequently

changed and subject to interpretation,

cannot predict whether future restrictions

on our business may be enacted or become applicable

Our ability to sell and deliver the crude oil, bitumen, natural

gas, NGLs and LNG that we produce also

the availability,

and capacity of gathering, processing, compression,

transportation and pipeline facilities

and equipment, as well as any necessary diluents

to prepare our crude oil, bitumen, natural

gas, NGLs and LNG for

Furthermore, we rely on there being sufficient

facilities and takeaway

capacity to support our ambitions

to reduce routine flaring.

The facilities, equipment and diluents

we rely on may be temporarily

unavailable to us

due to market conditions, extreme

weather events, regulatory

reasons, mechanical reasons or other factors

conditions, many of which are beyond

In addition, in certain newer plays, the capacity

facilities, equipment and diluents may

not be sufficient to accommodate production

from existing and new wells,

and construction and permitting delays,

permitting costs and regulatory or

other constraints could limit or delay

the construction, manufacture or other acquisition

of new facilities and equipment.

If any facilities, equipment or

diluents, or any of the transportation

methods and channels that we rely on become unavailable

for any period of

time, we may incur increased costs

to transport our crude oil, bitumen, natural

gas, NGLs and LNG for sale or we

may be forced to curtail our

production of crude oil, bitumen, natural

ConocoPhillips

Our investments in joint ventures decrease

our ability to manage risk.

We conduct many of our operations

through joint ventures in which we

may share control with our

joint venture

There is a risk our joint venture participants

may at any time have economic,

business or legal interests

or goals that are inconsistent

with those of the joint venture or us, or our joint

venture partners may be unable

meet their economic or other obligations and

we may be required to fulfill those obligations

Failure by us,

or an entity in which we have a joint venture

interest, to adequately manage

the risks associated with any

operations, acquisitions or dispositions could

have a material adverse

effect on the financial condition or results

operations of our joint ventures

and, in turn, our business and operations.

Our operations present hazards and risks that require significant

and continuous oversight.

The scope and nature of our operations

present a variety of significant hazards

and risks, including operational

hazards and risks such as explosions,

fires, product spills, severe weather,

geological events, labor disputes,

geopolitical tensions, armed hostilities, terrorist

or piracy attacks, sabotage,

civil unrest or cyberattacks.

operations are subject to the additional

hazards of pollution, toxic substances

and other environmental hazards

Offshore activities may pose incrementally

greater risks because of complex

subsurface conditions such

as higher reservoir pressures, water

depths and metocean conditions.

All such hazards could result in loss of

human life, significant property

and equipment damage, environmental

pollution, impairment of operations,

substantial losses to us and damage to

our reputation.

Our business and operations may be disrupted

respond, or are perceived not to

respond, in an appropriate manner to

any of these hazards and risks

major crisis or if we are unable to efficiently

restore or replace affected

operational components

and capacity.

insurance may not be adequate to

compensate us for all resulting

losses, and the cost to obtain

adequate coverage may

increase for us in the future.

our ability to bring long-lead time, capital intensive projects to completion on budget and on schedule;

and our ability to efficiently and profitably operate mature properties.

If we are not successful in developing the resources in our portfolio, our financial condition and results of operations may be adversely affected.

The exploration and production of oil and gas is a highly competitive industry.

The exploration and production of crude oil, bitumen, natural gas and NGLs is a highly competitive business.

We compete with private, public and state-owned companies in all facets of the exploration and production business, including to locate and obtain new sources of supply and to produce crude oil, bitumen, natural gas and NGLs in an efficient, cost-effective manner.

In addition, as the energy transition progresses, we anticipate the oil and gas industry will face additional competition from alternative fuels.

We must compete for the materials, equipment, services, employees and other personnel (including geologists, geophysicists, engineers and other specialists) necessary to conduct our business.

If we are not successful in our competition, our financial condition and results of operations may be adversely affected.

ConocoPhillips 2022 10-K

Risk Factors Table of Contents

Our ability to successfully execute on our energy transition plans is subject to a number of risks and uncertainties and may be costly to achieve.

In 2020, we announced our Paris-aligned climate risk framework, including an ambition to achieve net-zero emissions on operational emissions by 2050.

In 2022, we published our Plan for the Net-Zero Energy Transition (the “Plan”) and continued to set increasingly ambitious targets around emissions and flaring.

Our ability to achieve stated targets, goals and ambitions is subject to a number of risks and uncertainties out of our control, including the pace of development of currently undeveloped technologies, policies and markets, as well as potential regulations that may impair our ability to execute on current or future plans.

Furthermore, we are still in the planning stages, and execution could be costly and have unforeseen obstacles.

We may be required to purchase emission credits, and there may be insufficient offsets to achieve our goals.

As advanced technologies are developed to accurately measure emissions, we may be required to revise our emissions estimates and reduction goals.

We may be adversely affected and potentially need to reduce economic end-of-field life of certain assets and impair associated net book value due to the emissions intensity of some of our assets.

Even if we meet our goals, our efforts may be characterized as insufficient.

In 2021, we established our Low-Carbon Technologies organization to identify and evaluate business opportunities that address end-use emissions and early-stage low-carbon technology opportunities that would leverage our existing expertise and adjacencies.

While we perform a thorough analysis on these investments, the related technologies and markets are at early stages of development and we do not yet know what rate of return we will achieve.

The success of our low-carbon strategy will in part be dependent upon the cooperation of agencies, the support of stakeholders, the success of our investments, and our ability to apply our existing strengths and expertise.

Any material change in the factors and assumptions underlying our estimates of crude oil, bitumen, natural gas and NGL reserves could impair the quantity and value of those reserves.

Our proved reserve information included in this annual report represents management’s best estimates based on assumptions, as of a specified date, of the volumes to be recovered from underground accumulations of crude oil, bitumen, natural gas and NGLs.

Such volumes cannot be directly measured and the estimates and underlying assumptions used by management are subject to substantial risk and uncertainty.

Any material changes in the factors and assumptions underlying our estimates of these items could result in a material negative impact to the volume of reserves reported or could cause us to incur impairment expenses on property associated with the production of those reserves.

Future reserve revisions could also result from changes in, among other things, governmental regulation and commodity prices.

Our business may be adversely affected by price controls, government-imposed limitations on production or exports of crude oil, bitumen, LNG, natural gas and NGLs, or the unavailability of adequate gathering, processing, compression, transportation, and pipeline facilities and equipment for our production of crude oil, bitumen, natural gas and NGLs.

As discussed herein, our operations are subject to extensive governmental regulations.

From time to time, regulatory agencies have imposed price controls and limitations on production by restricting the rate of flow of crude oil, bitumen, natural gas and NGL wells below actual production capacity.

Similarly, in response to increased domestic energy costs, circumstances determined to be in the economic interest of the country, or a declared national emergency, governments could restrict the export or import of our products which would adversely impact our business.

Because legal requirements are frequently changed and subject to interpretation, we cannot predict whether future restrictions on our business may be enacted or become applicable to us.

Our ability to sell and deliver the crude oil, bitumen, LNG, natural gas and NGLs that we produce also depends on the availability, proximity, and capacity of gathering, processing, compression, transportation and pipeline facilities and equipment, as well as any necessary diluents to prepare our crude oil, bitumen, LNG, natural gas and NGLs for transport.

Furthermore, we rely on there being sufficient facilities and takeaway capacity to support our commitment to reduce routine flaring.

The facilities, equipment and diluents we rely on may be temporarily unavailable to us due to market conditions, extreme weather events, regulatory reasons, mechanical reasons or other factors or conditions, many of which are beyond our control.

In addition, in certain newer plays, the capacity of necessary facilities, equipment and diluents may not be sufficient to accommodate production from existing and new wells, and construction and permitting delays, permitting costs and regulatory or other constraints could limit or delay the construction, manufacture or other acquisition of new facilities and equipment.

If any facilities, equipment or diluents, or any of the transportation methods and channels that we rely on become unavailable for any period of time, we may incur increased costs to transport our crude oil, bitumen, LNG, natural gas and NGLs for sale, or we may be forced to curtail our production of crude oil, bitumen, natural gas or NGLs.

ConocoPhillips 2022 10-K

Risk Factors Table of Contents

Our ability to manage risk or influence outcomes in joint ventures may be constrained.

We conduct many of our operations through joint ventures in which another joint venture partner is operator or we may not have majority control.

In these cases, the economic, business, or legal interests or goals of the operator or the voting majority may be inconsistent with ours, and we may not be able to influence the decision making or outcomes to align with our interests or goals.

Failure by an operator or a majority, with whom we have a joint venture interest, to adequately manage the risks associated with any operations could have an adverse effect on the financial condition or results of operations of our joint ventures and, in turn, our business and operations.

Our operations present hazards and risks that require significant and continuous oversight.

The scope and nature of our operations present a variety of significant hazards and risks, including operational hazards and risks such as explosions, fires, product spills, severe weather, geological events, global health crises, such as epidemics and pandemics, labor disputes, geopolitical tensions, armed hostilities, terrorist or piracy attacks, sabotage, civil unrest or cyberattacks.

Our operations are subject to the additional hazards of pollution, toxic substances and other environmental hazards and risks.

Offshore activities may pose incrementally greater risks because of complex subsurface conditions such as higher reservoir pressures, water depths and metocean conditions.

All such hazards could result in loss of human life, significant property and equipment damage, environmental pollution, impairment of operations, substantial losses to us and damage to our reputation.

Our business and operations may be disrupted if we do not respond, or are perceived not to respond, in an appropriate manner to any of these hazards and risks or any other major crisis or if we are unable to efficiently restore or replace affected operational components and capacity.

Further, our insurance may not be adequate to compensate us for all resulting losses, and the cost to obtain adequate coverage may increase for us in the future or may not be available.

In addition, although we design and operate our business operations to accommodate expected climatic conditions, to the extent there are significant changes in the earth's climate, such as more severe or frequent weather conditions in the markets where we operate or the areas where our assets reside, we could incur increased expenses, our operations and supply chain could be adversely impacted and demand for our products could fall.

Our business has been, and may continue to be, adversely affected by the coronavirus (COVID-19) pandemic.

The COVID-19 pandemic and the measures put in place to address it negatively impacted the global economy, disrupted global supply chains, reduced global demand for oil and gas and created significant volatility and disruption of financial and commodity markets.

Our business was adversely impacted by the COVID-19 pandemic and may be impacted again in the future depending on the scope and severity of current or future outbreaks.

Potential impacts to our business could include, but are not limited to, reduced demand for our products, disruptions to our supply chain, disruptions in our contractual arrangements with our service providers, suppliers and other counterparties, failures by our suppliers, contract manufacturers, contractors, joint venture partners and external business partners, to meet their obligations to us, reduced workforce productivity, and voluntary or involuntary curtailments to support oil prices or alleviate storage shortages for our products.

Any of these factors, or other cascading effects of the COVID-19 pandemic that are not currently foreseeable, could materially increase our costs, negatively impact our revenues and damage our financial condition, results of operations, cash flows and liquidity position.

The full extent and duration of any such impacts cannot be predicted at this time because of the lack of certainty surrounding the pandemic.

ConocoPhillips 2022 10-K

Risk Factors Table of Contents

Legal and Regulatory Risks

We expect to continue

to incur substantial capital

expenditures and operating costs

as a result of our compliance

with existing and future environmental

laws and regulations.

Our business is subject to numerous laws and

regulations relating to the protection

of the environment, which are

expected to continue to have

an increasing impact on our operations.

For a description of the most significant of

these environmental laws and

regulations, see the “Contingencies—Environmental”

and “Contingencies—Climate

Change” sections of Management’s

Discussion and Analysis of Financial Condition and Results

of Operations.

These laws and regulations continue

to increase in both number and complexity and

affect our operations

respect to, among other things:

Permits required in connection with exploration,

drilling, production and other activities, including those

issued by national, subnational, and local authorities;

The discharge of pollutants into

the environment;

Emissions into the atmosphere, such

as nitrogen oxides, sulfur dioxide, mercury

and GHG emissions,

including methane;

We expect to continue to incur substantial capital expenditures and operating costs as a result of our compliance with existing and future environmental laws and regulations.

Our business is subject to numerous laws and regulations relating to the protection of the environment, which are expected to continue to have an increasing impact on our operations.

For a description of the most significant of these environmental laws and regulations, see the “Contingencies—Environmental” and “Contingencies—Climate Change” sections of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

These laws and regulations continue to increase in both number and complexity and affect our operations with respect to, among other things:

• Permits required in connection with exploration, drilling, production and other activities, including those issued by national, subnational, and local authorities;

• The discharge of pollutants into the environment;

• Emissions into the atmosphere, such as nitrogen oxides, sulfur dioxide, mercury and GHG emissions, including methane;

• Carbon taxes;

The handling, use, storage, transportation,

disposal and cleanup of hazardous materials

and hazardous

and nonhazardous wastes

The dismantlement, abandonment and restoration

of historic properties and facilities at

the end of their

useful lives;

Exploration and production

activities in certain areas, such as offshore

environments, arctic fields, oil

sands reservoirs and unconventional

We have incurred and

will continue to incur substantial

capital, operating and maintenance, and

expenditures as a result of these laws and

In addition, to the extent these expenditures

by a buyer as a result of a disposition, it may

result in our incurring substantial costs

if the buyer is unable to satisfy

these obligations.

Any failure by us to comply

with existing or future laws, regulations

and other requirements

could result in administrative

or civil penalties, criminal fines, other enforcement

actions or third-party litigation

ConocoPhillips

To the extent

these expenditures, as with all costs,

are not ultimately reflected in

the prices of our

products and services, our business, financial condition, results

of operations and cash flows in future

could be materially adversely affected.

Existing and future laws, regulations and internal initiatives

relating to global climate change, such as

limitations on GHG emissions may impact or limit our business plans,

result in significant expenditures, promote

alternative uses of energy or reduce demand for our products.

Continuing political and social attention

to the issue of global climate change has resulted

in both existing and

pending international agreements

and national, regional or local legislation and regulatory

measures to limit GHG

emissions, such as cap and trade regimes, specific

emission standards, carbon taxes,

restrictive permitting,

increased fuel efficiency standards

and incentives or mandates for renewable

Although we may support

many of these legislative and regulatory

measures, how and when they are enacted could

result in a material

adverse effect to our

business, financial condition, results of operations

and cash flows in future periods.

For example, in November 2021,

Environmental Protection

Agency published a Proposed Rule that would

revise the regulations governing

the emission of GHG and volatile organic compounds

from new oil and gas

production facilities, and emission guidelines

for states to use when revising

Clean Air Act implementation plans to

limit GHG emissions from existing oil and gas

Although the company supports the direct federal

regulation of methane from new and existing

the final form and substance of any regulations

currently known and could result in additional

capital expenditures and compliance,

operating and maintenance

costs, any of which may have

an adverse effect on our business

and results of operations.

Additionally,

in 2021, the U.S.

joined the international community at

the 26th Conference of the Parties (COP26).

• The handling, use, storage, transportation, disposal and cleanup of hazardous materials and hazardous and nonhazardous wastes;

• The dismantlement, abandonment and restoration of historic properties and facilities at the end of their useful lives;

• Exploration and production activities in certain areas, such as offshore environments, arctic fields, oil sands reservoirs and unconventional plays.

We have incurred and will continue to incur substantial capital, operating and maintenance, and remediation expenditures as a result of these laws and regulations.

In addition, to the extent these expenditures are assumed by a buyer as a result of a disposition, it may result in our incurring substantial costs if the buyer is unable to satisfy these obligations.

Any failure by us to comply with existing or future laws, regulations and other requirements could result in administrative or civil penalties, criminal fines, other enforcement actions or third-party litigation against us.

To the extent these expenditures, as with all costs, are not ultimately reflected in the prices of our products, our business, financial condition, results of operations and cash flows in future periods could be adversely affected.

Existing and future laws, regulations and internal initiatives relating to global climate change, such as limitations on GHG emissions, may impact or limit our business plans, result in significant expenditures, promote alternative uses of energy or reduce demand for our products.

Continuing political and societal attention to the issue of global climate change has resulted in both existing and pending international agreements and national, regional or local legislation and regulatory measures to limit GHG emissions, such as cap and trade regimes, specific emission standards, carbon taxes, restrictive permitting, increased fuel efficiency standards, and incentives or mandates for renewable and alternative energy.

Although we may support the intent of legislative and regulatory measures aimed at addressing climate-related risks, the specifics of how and when they are enacted could result in a material adverse effect to our business, financial condition, results of operations and cash flows in future periods.

For example, in November 2021, the U.S.

Environmental Protection Agency published a Proposed Rule (revised and republished as a Supplemental Proposal in November 2022) that would revise the regulations governing the emission of GHG and volatile organic compounds from new oil and gas production facilities, and emission guidelines for states to use when revising Clean Air Act implementation plans to limit GHG emissions from existing oil and gas facilities.

While the form and substance of the regulation is not yet final, the new regulation could result in additional capital expenditures and compliance, operating and maintenance costs, any of which may have an adverse effect on our business and results of operations.

Additionally, in 2022, the U.S.

joined the international community at the 27th Conference of the Parties (COP27).

At the conclusion of COP27, the U.S.

200 other counties agreed to the Glasgow Climate

committing to revisiting and strengthening

their current emissions targets

to 2030 in 2022 and finalizing the

outstanding elements of the Paris

In addition, our operations continue

in countries around the world

which are party to the Paris Agreement.

The implementation of current

agreements and regulatory measures,

well as any future agreements

or measures addressing climate change and

GHG emissions, may adversely impact

the demand for our products, impose taxes

on our products or operations or require

us to purchase emission

credits or reduce emission of GHGs from our operations.

As a result, we may experience declines in commodity

prices or incur substantial capital expenditures

and compliance, operating, maintenance

and remediation costs,

any of which may have an

adverse effect on our business

and results of operations.

In September 2021, we announced an improvement

to our Paris-aligned climate risk framework,

committed to an improvement

to our targets for reduc

ing our scope 1 and 2 emissions intensity on both a

operated and net equity basis and reaffirmed

our commitment to advocate

for the reduction of scope 3 emissions

through our support for a U.S.

Compliance with, and achievement of,

climate change-related

internal initiatives such as the foregoing

may increase costs, require

us to purchase emission credits, or limit or

impact our business plans.

If we are not successful in select internal initiatives,

we may be adversely affected

potentially need to reduce

economic end-of-field life

of certain assets and impair associated

net book value.

Increasing attention to

global climate change has also resulted in pressure

from and upon stockholders,

institutions and/or financial markets

to modify their relationships with oil and gas

companies and to limit

investments and/or funding to

such companies.

For example, Harvard University

announced in September 2021

that it will stop investing

its $42 billion endowment in fossil fuels and will let its current

investments expire without

As public pressure continues to

mount, our access to capital on terms we

find favorable (if it is available

at all) may be limited and our costs

may increase,

our reputation could be damaged or our business

and results of

operations may be otherwise adversely

Furthermore, increasing attention

to global climate change has resulted

in an increased likelihood of governmental

investigations and private

litigation, which could increase our costs

or otherwise adversely affect our business.

Beginning in 2017, cities, counties, governments

and other entities in several states

have filed lawsuits

against oil and gas companies,

including ConocoPhillips, seeking compensatory

damages and equitable relief to

ConocoPhillips

abate alleged climate change impacts.

Additional lawsuits with similar allegations are

expected to be filed.

amounts claimed by plaintiffs are unspecified

and the legal and factual issues

involved in these cases are

unprecedented.

ConocoPhillips believes these lawsuits

are factually and legally meritless and

are an inappropriate

vehicle to address the challenges associated

with climate change and will vigorously

defend against such lawsuits.

The ultimate outcome and impact to

us cannot be predicted with certainty,

and we could incur substantial

costs associated with defending

these and similar lawsuits in the future.

We could also receive lawsuits

failure or lack of diligence to meet our

publicly stated ESG goals, so

called “greenwashing” cases.

In addition, although we design and operate

our business operations to accommodate

expected climatic

conditions, to the extent there are

significant changes in the earth’s

climate, such as more severe or frequent

weather conditions in the markets

where we operate or the areas

where our assets reside, we could incur

increased expenses, our operations

and supply chain could be adversely impacted, and

demand for our products

For more information on legislation

or precursors for possible regulation

relating to global climate change that

affect or could affect

our operations and a description

of the company’s response,

see the “Contingencies—Climate

Change” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations

Domestic and worldwide political and economic developments

could damage our operations and materially

reduce our profitability and cash flows.

Actions of the U.S., state, local

and foreign governments, through

sanctions, tax and other legislation, executive

order and commercial restrictions,

could reduce our operating profitability

both in the U.S.

locations, restrictions on our operations;

and nearly 200 other countries, including most of the other countries in which we operate, renewed solidarity to deliver on the outstanding elements of the Paris Agreement and the Glasgow Climate Pact agreed to at the 26th Conference of the Parties in 2021.

The implementation of current agreements and regulatory measures, as well as any future agreements or measures addressing climate change and GHG emissions, may adversely increase our capital and operating expenses, impact the demand for our products, impose taxes on our products or operations, or

ConocoPhillips 2022 10-K

Risk Factors Table of Contents

require us to purchase emission credits or reduce emissions of GHGs from our operations.

For example, in August 2022, the U.S.

enacted the Inflation Reduction Act of 2022, which includes a charge on methane emissions from selected facilities in the oil and gas industry, including many of the facilities operated by ConocoPhillips.

As a result, we may experience declines in commodity prices or incur substantial capital expenditures and compliance, operating, maintenance and remediation costs, any of which may have an adverse effect on our business and results of operations.

For more information on legislation or precursors for possible regulation relating to global climate change that affect or could affect our operations and a description of the company's response, see the "C ontingencies—Climate Change” sections of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Broader investor and societal attention to and efforts to address global climate change may limit who can do business with us or our access to capital and could subject us to litigation.

Increasing attention to global climate change has also resulted in pressure from and upon stockholders, financial institutions and other market participants to modify their relationships with oil and gas companies and to limit or discontinue investments, insurance and funding to such companies.

For example, a significant number of financial institutions are now members of the Glasgow Financial Alliance for Net Zero (GFANZ), thereby pledging to the goal of net zero by 2050 on scope 1, 2 and 3 emissions, as well as setting interim targets for 2030 or earlier.

While GFANZ members are not prohibited from having relationships with oil and gas companies, they are facing intense scrutiny for providing any sort of financial support to such companies, which may lead to greater restrictions on GFANZ members in the future.

Conversely, we also face pressure from some in the investment community and certain public interest groups to limit the focus on ESG in our decision-making.

As public pressure continues to mount, our access to capital on terms we find favorable (if it is available at all) may be limited, and our costs may increase, our reputation could be damaged, and our business and results of operations may be otherwise adversely affected.

Furthermore, increasing attention to global climate change has resulted in an increased likelihood of governmental investigations and private litigation, which could increase our costs or otherwise adversely affect our business.

Beginning in 2017, cities, counties, governments and other entities in several states/territories in the U.S.

have filed lawsuits against oil and gas companies, including ConocoPhillips, seeking compensatory damages and equitable relief to abate alleged climate change impacts.

Additional lawsuits with similar allegations are expected to be filed.

The amounts claimed by plaintiffs are unspecified and the legal and factual issues involved in these cases are unprecedented.

ConocoPhillips believes these lawsuits are factually and legally meritless, and are an inappropriate vehicle to address the challenges associated with climate change and will vigorously defend against such lawsuits.

The ultimate outcome and impact to us cannot be predicted with certainty, and we could incur substantial legal costs associated with defending these and similar lawsuits in the future.

We could also receive lawsuits alleging a failure or lack of diligence to meet our publicly stated ESG goals, or alleging misrepresentation related to our ESG activity.

Political and economic developments could damage our operations and materially reduce our profitability and cash flows.

Actions of the U.S., state, local and foreign governments, through sanctions, tax and other legislation, executive orders and commercial restrictions, could reduce our operating profitability both in the U.S.

In certain locations, restrictions on our operations;

leasing restrictions;

special taxes

or tax assessments;

transparency regulations

that could require us to disclose competitively

sensitive information or might

violate non-disclosure laws of other countries

have been imposed or proposed by governments

or certain interest

For example, in 2020 a ballot initiative

known as the Fair Share Act was proposed

in the state of Alaska,

which, if enacted would have increased

share of production revenues and

required producers to

publicly disclose additional financial information.

Although ultimately defeated,

similar initiatives may be

proposed and may be successful in the future.

In addition, we may face regulatory

changes in the U.S.

but not limited to, the enactment of tax

law changes that adversely affect

the fossil fuel industry,

emissions standards, restrictive

flaring requirements, and more stringent

environmental impact studies

We also cannot rule out the possibility

of similar regulatory shifts and attendant

cost and market access

implications in other international jurisdictions.

One area subject to significant political and

regulatory activity is the use of hydraulic

fracturing, an essential

completion technique that facilitates

production of oil and natural gas

otherwise trapped in lower permeability

rock formations.

A range of local, state,

federal and national laws and

regulations currently govern or,

hydraulic fracturing

operations, prohibit hydraulic

fracturing in some jurisdictions.

Although hydraulic fracturing

has been conducted safely for

many decades, a number of new laws, regulations

and permitting requirements are

under consideration which could result

in increased costs, operating restrictions,

operational delays or could

the ability to develop oil and natural

gas resources.

Certain jurisdictions in which we operate have

adopted or are

considering regulations that could impose

new or more stringent permitting, disclosure

or other regulatory

requirements on hydraulic

fracturing or other oil and natural gas

operations, including subsurface water

In addition, certain interest

groups have also proposed ballot initiatives

and constitutional amendments designed

to restrict oil and natural

gas development generally and hydraulic

fracturing in particular.

In the event that ballot

initiatives, local, state,

or national restrictions or prohibitions are

adopted and result in more stringent

on the production and development of oil and

natural gas in areas where we

conduct operations, we may

significant costs to comply with

such requirements or may experience delays

or curtailment in the permitting or

pursuit of exploration,

development or production activities.

Such compliance costs and delays,

curtailments,

limitations or prohibitions could have

a material adverse effect

on our business, prospects, results of operations,

financial condition and liquidity.

ConocoPhillips

government can also prevent

or restrict us from doing business in foreign

These restrictions

and those of foreign governments

have in the past limited our ability to

operate in, or gain access to,

opportunities

in various countries.

Actions by host governments, such

as the expropriation of our oil assets by the Venezuelan

government, have affected

operations significantly in the past

and may continue to do so in the future.

domestic and international policies and regulations

may affect our ability to collect payments

such as those

to the settlement with Petróleos

de Venezuela, S.A.

or the ICSID Award against

Government of Venezuela;

or to obtain or maintain licenses or permits,

including those necessary for drilling and

development of wells in various locations.

Similarly, the declaration

of a “climate emergency” could

actions to limit exports of our products and other

restrictions.

Local political and economic factors

in international markets

could have a material adverse

effect on us.

Approximately 38 percent

of our hydrocarbon

production was derived from production

outside the U.S.

and 29 percent of our proved reserves,

as of December 31, 2021, were located

outside the U.S.

We are subject to

risks associated with operations

in both domestic and international markets,

including changes in foreign

governmental policies relating

to crude oil, natural gas, bitumen, NGLs

or LNG pricing and taxation, other

economic or diplomatic developments (including

the macro effects of international

trade policies and disputes),

potentially disruptive geopolitical conditions,

and international monetary and currency

rate fluctuations.

Restrictions on production of oil and

gas could increase to the extent

governments view such measures as

approach for pursuing national

and global energy and climate policies.

In addition, some countries where we

operate lack a fully independent judiciary

This, coupled with changes in foreign law or policy,

lack of legal certainty that exposes

our operations to increased risks,

including increased difficulty in enforcing

agreements in those jurisdictions and increased risks

of adverse actions by local government authorities,

expropriations.

Other Risk Factors Facing

our Business or Operations

We may need additional capital in the

future, and it may not be available on acceptable terms

We have historically

relied primarily upon cash generated

by our operations to fund our

operations and strategy;

we have also relied from time to

time on access to the debt and equity capital markets

There can be no assurance that additional

debt or equity financing will be available in the future on

terms or at all.

In addition, although we anticipate we will be

able to repay our existing

indebtedness when it

matures or in accordance with our stated

plans, there can be no assurance we will be able to

Our ability to

obtain additional financing or refinance our existing

indebtedness when it matures or in

accordance with our

plans, will be subject to a number of factors,

including market conditions, our

operating performance, investor

sentiment and our ability to incur additional debt

in compliance with agreements governing our then-outstanding

If we are unable to generate sufficient

funds from operations or raise

additional capital for any reason,

business could be adversely affected.

In addition, we are regularly evaluated

by the major rating agencies based on a number of factors,

including our

financial strength and conditions affecting

the oil and gas industry generally.

We and other industry companies

have had their ratings reduced

in the past due to negative commodity

price outlooks.

Any downgrade in our credit

rating or announcement that our credit

rating is under review for possible

downgrade could increase the cost

associated with any additional indebtedness

ConocoPhillips

Our business may be adversely affected by deterioration

in the credit quality of, or defaults under

our contracts

with, third-parties with whom we do business.

The operation of our business requires

us to engage in transactions with

numerous counterparties operating

variety of industries, including other companies

operating in the oil and gas industry.

These counterparties may

default on their obligations to

us as a result of operational failures

or a lack of liquidity,

or for other reasons,

including bankruptcy.

Market speculation about the credit

quality of these counterparties, or their ability

continue performing on their existing

obligations, may also exacerbate

any operational difficulties

issues they are experiencing, particularly as it relates

to other companies in the oil and gas industry

as a result of

the volatility in commodity prices.

Any default by any of our

counterparties may result in our

inability to perform

our obligations under agreements we have

made with third-parties or may otherwise adversely

affect our business

or results of operations.

In addition, our rights against any of our counterparties

as a result of a default may not be

adequate to compensate us

for the resulting harm caused or may

not be enforceable at all in some circumstances.

We may also be forced

to incur additional costs as we attempt

to enforce any rights

we have against

counterparty,

which could further adversely impact our results

of operations.

Our ability to execute our capital

return program is subject to certain considerations.

In December 2021, we initiated a three

-tier capital return program

that consists of our ordinary dividend, share

repurchases and a quarterly variable

return of cash (VROC).

Ordinary dividends are authorized and determined

by our Board of Directors in its

sole discretion and depend

upon a number of factors, including:

special taxes or tax assessments;

and payment transparency regulations that could require us to disclose competitively sensitive information or might cause us to violate non-disclosure laws of other countries have been imposed or proposed by governments or certain interest groups.

In addition, we may face regulatory changes in the U.S.

including, but not limited to, the enactment of tax law changes that adversely affect the fossil fuel industry, new methane emissions standards, restrictive flaring requirements, and more stringent environmental impact studies and reviews.

We also cannot rule out the possibility of similar regulatory shifts and attendant cost and market access implications in other international jurisdictions.

One area subject to significant political and regulatory activity is the use of hydraulic fracturing, an essential completion technique that facilitates production of oil and natural gas otherwise trapped in lower permeability rock formations.

A range of local, state, federal and national laws and regulations currently govern or, in some hydraulic fracturing operations, prohibit hydraulic fracturing in some jurisdictions.

Although hydraulic fracturing has been conducted safely for many decades, a number of new laws, regulations and permitting requirements are under consideration which could result in increased costs, operating restrictions, operational delays or could limit the ability to develop oil and natural gas resources.

Certain jurisdictions in which we operate have adopted or are considering regulations that could impose new or more stringent permitting, disclosure or other regulatory requirements on hydraulic fracturing or other oil and natural gas operations, including subsurface water disposal.

ConocoPhillips 2022 10-K

Risk Factors Table of Contents

In addition, certain interest groups have also proposed ballot initiatives and constitutional amendments designed to restrict oil and natural gas development generally and hydraulic fracturing in particular.

In the event that ballot initiatives, local, state, or national restrictions or prohibitions are adopted and result in more stringent limitations on the production and development of oil and natural gas in areas where we conduct operations, we may incur significant costs to comply with such requirements or may experience delays or curtailment in the permitting or pursuit of exploration, development or production activities.

Such compliance costs and delays, curtailments, limitations or prohibitions could have a material adverse effect on our business, prospects, results of operations, financial condition and liquidity.

Local political and economic factors in international markets could have a material adverse effect on us.

Approximately 32 percent of our hydrocarbon production was derived from production outside the U.S.

in 2022, and 32 percent of our proved reserves, as of December 31, 2022, were located outside the U.S.

We are subject to risks associated with our operations in foreign jurisdictions and international markets, including changes in foreign governmental policies relating to crude oil, bitumen, LNG, natural gas or NGL pricing and taxation, other political, economic or diplomatic developments (including the macro effects of international trade policies and disputes), potentially disruptive geopolitical conditions, and international monetary and currency rate fluctuations.

For example, in response to higher energy prices resulting from the conflict between Russia and Ukraine, in December 2022, Australia’s Parliament passed legislation setting a one-year price cap on natural gas.

Restrictions on production of oil and gas could increase to the extent governments view such measures as a viable approach for pursuing national and global energy and climate policies.

In addition, some countries where we operate lack a fully independent judiciary system.

This, coupled with changes in foreign law or policy, results in a lack of legal certainty that exposes our operations to increased risks, including increased difficulty in enforcing our agreements in those jurisdictions and increased risks of adverse actions by local government authorities, such as expropriations.

Actions by host governments, such as the expropriation of our oil assets by the Venezuelan government, have affected operations significantly in the past and may continue to do so in the future.

In addition, the U.S.

government has the authority to prevent or restrict us from doing business in foreign jurisdictions or with certain parties.

These restrictions and similar restrictions imposed by foreign governments have in the past limited our ability to operate in, or gain access to, opportunities in various jurisdictions.

Changes in domestic and international policies and regulations may also restrict our ability to obtain or maintain licenses or permits necessary to operate in foreign jurisdictions, including those necessary for drilling and development of wells.

Similarly, the declaration of a “climate emergency” could result in actions to limit exports of our products and other restrictions.

Any of these actions could adversely affect our business or operating results.

Other Risk Factors Facing our Business or Operations

We may need additional capital in the future, and it may not be available on acceptable terms or at all.

We have historically relied primarily upon cash generated by our business to fund our operations and strategy;

however, we have also relied from time to time on access to the capital markets for funding.

There can be no assurance that additional financing will be available in the future on acceptable terms or at all.

In addition, although we anticipate we will be able to repay our existing indebtedness when it matures or in accordance with our stated plans, there can be no assurance we will be able to do so.

Our ability to obtain additional financing or refinance our existing indebtedness when it matures or in accordance with our plans, will be subject to a number of factors, including market conditions, our operating performance, investor sentiment and financial institution policies regarding the oil and gas industry.

If we are unable to generate sufficient funds from operations or raise additional capital for any reason, our business could be adversely affected.

In addition, we are regularly evaluated by the major rating agencies based on a number of factors, including our financial strength and conditions affecting the oil and gas industry generally.

We and other industry companies have had our ratings reduced in the past due to negative commodity price outlooks.

Any downgrade in our credit rating or announcement that our credit rating is under review for possible downgrade could increase the cost associated with any additional indebtedness we incur.

ConocoPhillips 2022 10-K

Risk Factors Table of Contents

Our business may be adversely affected by deterioration in the credit quality of, or defaults under our contracts with, third-parties with whom we do business.

The operation of our business requires us to engage in transactions with numerous counterparties operating in a variety of industries, including other companies operating in the oil and gas industry.

These counterparties may default on their obligations to us as a result of operational failures or a lack of liquidity, or for other reasons, including bankruptcy.

Market speculation about the credit quality of these counterparties, or their ability to continue performing on their existing obligations, may also exacerbate any operational difficulties or liquidity issues they are experiencing.

Any default by any of our counterparties may result in our inability to perform our obligations under agreements we have made with third-parties or may otherwise adversely affect our business or results of operations.

In addition, our rights against any of our counterparties as a result of a default may not be adequate to compensate us for the resulting harm caused or may not be enforceable at all in some circumstances.

We may also be forced to incur additional costs as we attempt to enforce any rights we have against a defaulting counterparty, which could further adversely impact our results of operations.

Our ability to execute our capital return program is subject to certain considerations.

In December 2021, we initiated a three-tier capital return program that consists of our ordinary dividend, share repurchases and a variable return of cash (VROC).

Ordinary dividends are authorized and determined by our Board of Directors in its sole discretion and depend upon a number of factors, including:

• Cash available for distribution;

Our results of operations and anticipated

future results of operations;

Our financial condition, especially in relation to

the anticipated future capital needs of our

The level of distributions paid by comparable

• Our results of operations and anticipated future results of operations;

• Our financial condition, especially in relation to the anticipated future capital needs of our properties;

• The level of distributions paid by comparable companies;

• Our operating expenses;

Other factors our Board of Directors

deems relevant.

VROC distributions are also authorized

and determined by our Board of Directors

in its sole discretion and depend

upon a number of factors, including:

The anticipated level of distributions

required to meet our capital returns

• Other factors our Board of Directors deems relevant.

VROC distributions are also authorized and determined by our Board of Directors in its sole discretion and depend upon a number of factors, including:

• The anticipated level of distributions required to meet our capital returns commitment;

• Forward prices;

Balance sheet cash;

Other factors our Board of Directors

deems relevant.

We expect to continue

to pay a quarterly ordinary dividend

to our stockholders.

In addition, based on the current

environment, we anticipate

also paying a quarterly VROC to

our shareholders staggered from

dividend payment, resulting in up to

eight cash distributions to shareholders

throughout the year;

amount of the VROC is variable and will depend upon the

above factors, and our Board

of Directors may determine

not to pay a VROC in a quarter or may

cease declaring a VROC at any time.

our Board of Directors may

reduce our ordinary dividend or cease declaring dividends

at any time, including if it determines that

provided by operating activities,

after deducting capital expenditures

and investments, are not sufficient

our desired levels of dividends to our stockholders

or to pay dividends to our stockholders

ConocoPhillips

Additionally, as

of December 31, 2021, $10.9 billion of repurchase authority

remained of the $25 billion share

repurchase program our Board

of Directors had authorized.

Our share repurchase program

does not obligate us to

acquire a specific number of shares during any

period, and our decision to commence, discontinue

repurchases in any period will depend

on the same factors that our Board

of Directors may consider when

declaring dividends, among others.

In the past we have suspended our share

repurchase program in response

market downturns, including as a

result of the oil market downturn

that began in early 2020, and we may do so

again in the future.

Any downward revision

in the amount of our ordinary dividend or VROC or the volume of

shares we purchase

under our share repurchase program

could have an adverse effect

on the market price of our common stock.

There are substantial risks with any

acquisitions or divestitures we have completed

or that we may choose to

We regularly review our portfolio

and pursue growth through acquisitions

and seek to divest noncore assets or

We may not be able to complete these

transactions on favorable

terms, on a timely basis, or at all.

Even if we do complete such transactions,

our cash flow from operations may

be adversely impacted or otherwise

the transactions may not result in the

benefits anticipated due to various

risks, including, but not limited to (i) the

failure of the acquired assets or businesses

to meet or exceed expected

returns, including risk of impairment;

the inability to dispose of noncore assets and

businesses on satisfactory terms and conditions;

and (iii) the

discovery of unknown and unforeseen liabilities

or other issues related to any

acquisition for which contractual

protections are inadequate

or we lack insurance or indemnities, including environmental

liabilities, or with regard

to divested assets or businesses, claims by

purchasers to whom we have provided

contractual indemnification.

In addition, we may face difficulties

in integrating the operations,

technologies, products and personnel of any

acquired assets or businesses.

we completed two major acquisitions in

2021, including the

acquisition of Concho in January and the acquisition of the Shell Permian assets

Combined, these

transactions added approximately

800,000 net acres, thereby significantly

increasing our unconventional

and operations in the Permian.

We may still encounter

difficulties integrating the acquired

assets into our

There are a large number of processes,

policies, procedures, operations

and technologies and systems

that must be integrated

in connection with the transactions and the integration

of the acquired assets.

possible that the integration process

could result in the disruption of our ongoing business;

inconsistencies in

standards, controls,

procedures and policies;

unexpected integration

higher than expected integration

and an overall post-completion

integration process that

takes longer than originally anticipated.

and will be required to devote management

attention and resources

to integrating the business

practices and

Any delays encountered

in the integration process

could have an adverse effect

on our revenues or on

our level of expenses or capital investment

and operating results, which may

adversely affect the value

common stock.

In addition, the actual integration may

result in additional and unforeseen

expect that the strategic benefits,

and additional income, as well as the realization

of other efficiencies related to

the integration of the acquired

assets, may offset incremental

transaction-related costs

over time, if we are not

able to adequately address integration

ConocoPhillips

Our technologies, systems and networks

may be subject to cyberattacks.

Our business, like others within the oil and

gas industry,

has become increasingly dependent on digital

technologies, some of which are managed by third

-party service providers on whom we rely

to help us collect, host

or process information.

Among other activities, we rely on digital technology to

estimate oil and gas reserves,

process and record financial and operating

data, analyze seismic and drilling information

and communicate with

employees and third-parties.

As a result, we face various cybersecurity

threats such as attempts to

unauthorized access to, or control

of, sensitive information

about our operations and our employees, attempts

render our data or systems

(or those of third-parties with whom we do business,

including third-party cloud and IT

service providers) corrupted or unusable,

threats to the security of our facilities and infrastructure

as well as those

of third-parties with whom we do business,

including third-party cloud and IT service providers,

and attempted

cyber terrorism.

In addition, computers control

oil and gas production, processing equipment

and distribution systems

are necessary to deliver our production

A disruption, failure, or a cyberattack

of these operating

systems, or of the networks

software and infrastructure

on which they rely,

many of which are not owned or

operated by us, could damage critical

production, distribution or storage

assets, delay or prevent delivery

make it difficult or impossible to accurately

account for production and settle

transactions, or negatively

impact public health or safety,

economic security, or

national security.

Although we have experienced occasional

cybersecurity incidents, none have had

a material effect on our

business, operations or reputation.

As cyberattacks have

to evolve, we have become subject

government-imposed security requirements

to implement specific mitigation measures

to protect against

ransomware attacks

and other known threats to information

and operations technology.

In response, we must

continually expend additional resources

to continue to modify or enhance our protective

measures or to

investigate and

remediate any vulnerabilities

Our implementation of reasonable security

and controls to monitor and mitigate

security threats and to increase security

for our information, facilities

infrastructure may result

in increased costs.

Despite our ongoing investments

in security resources, talent and

business practices, we are unable to assure

that any security measures will be completely

If our systems and infrastructure

were to be breached, damaged or disrupted,

we could be subject to serious

negative consequences, including disruption

of our operations, damage to our reputation,

a loss of counterparty

trust, reimbursement or other costs,

increased compliance costs, litigation

exposure and legal liability or regulatory

fines, penalties or intervention.

In addition, we have exposure to

cybersecurity incidents and the negative

of such incidents related to our data

and proprietary information housed

on third-party IT systems, including

Any of these could materially and adversel

affect our business, results of operations

or financial condition,

and any of the foregoing can

be exacerbated by a delay

or failure to detect a cybersecurity

incident or the full

extent of such incident notwithstanding

reasonable security procedures and controls.

The prevalence of remote

working during the pandemic has introduced

additional cybersecurity risk.

Although we have business continuity

plans in place, our operations may be adversely

affected by significant

and widespread disruption to our systems

and infrastructure that support

our business.

While we continue to evolve and modify our business

plans, there can be no assurance that

they will be completely effective

in avoiding disruption and business

insurance may not be adequate to

compensate us for all resulting

losses, and the cost to obtain

adequate coverage may

increase for us in the future.

ConocoPhillips

• The amount of cash we hold;

• Total yield;

• Other factors our Board of Directors deems relevant.

We expect to continue to pay a quarterly ordinary dividend to our stockholders.

In addition, based on the current environment, we anticipate also paying a quarterly VROC to our shareholders staggered from the ordinary dividend payment, resulting in up to eight cash distributions to shareholders throughout the year;

however, the amount of dividends and VROC is variable and will depend upon the above factors, and our Board of Directors may determine not to pay a dividend or VROC in a quarter or may cease declaring a dividend or VROC at any time.

For example, in October 2022, we paid a VROC of $1.40 per share, and in January 2023, we paid a VROC of $0.70 per share.

Additionally, as of December 31, 2022, $21.6 billion of repurchase authority remained of the $45 billion share repurchase program our Board of Directors had authorized.

Our share repurchase program does not obligate us to acquire a specific number of shares during any period, and our decision to commence, discontinue or resume repurchases in any period will depend on the same factors that our Board of Directors may consider when declaring dividends, among other factors.

In the past we have suspended our share repurchase program in response to market downturns, including as a result of the oil market downturn that began in early 2020, and we may do so again in the future.

Any downward revision in the amount of our ordinary dividend or VROC or the volume of shares we purchase under our share repurchase program could have an adverse effect on the market price of our common stock.

ConocoPhillips 2022 10-K

Risk Factors Table of Contents

There are substantial risks with any acquisitions or divestitures we have completed or that we may choose to undertake.

We regularly review our portfolio and pursue growth through acquisitions and seek to divest noncore assets or businesses.

We may not be able to complete these transactions on favorable terms, on a timely basis, or at all.

Even if we do complete such transactions, our cash flow from operations may be adversely impacted or otherwise the transactions may not result in the benefits anticipated due to various risks, including, but not limited to (i) the failure of the acquired assets or businesses to meet or exceed expected returns, including risk of impairment;

(ii) the inability to dispose of noncore assets and businesses on satisfactory terms and conditions;

and (iii) the discovery of unknown and unforeseen liabilities or other issues related to any acquisition for which contractual protections are inadequate or we lack insurance or indemnities, including environmental liabilities, or with regard to divested assets or businesses, claims by purchasers to whom we have provided contractual indemnification.

In addition, we may face difficulties in integrating the operations, technologies, products and personnel of any acquired assets or businesses.

Our technologies, systems and networks may be subject to cybersecurity threats.

Our business, like others within the oil and gas industry, is faced with growing cybersecurity threats as we increasingly rely on digital technologies across our business, some of which are managed by third-party service providers on whom we rely to help us collect, host or process information.

As a result, we face various cybersecurity threats, both internal and external, such as attempts to gain unauthorized access to, or control of, sensitive information about our operations and our employees, attempts to render our data or systems (or those of third-parties with whom we do business, including third-party cloud and IT service providers) corrupted or unusable, threats to the security of our facilities and infrastructure as well as those of third-parties with whom we do business, including third-party cloud and IT service providers, and attempted cyber terrorism.

Cybersecurity threats could affect the security of our data and proprietary information housed internally and on third-party IT systems, including the cloud.

A successful attack may result in gaining unauthorized access to, or control of, and disclosure of sensitive information about our operations and our employees and/or partners;

attempts to corrupt, sabotage, or render our data or systems (or those of third parties with whom we do business, including third-party cloud and IT service providers) unusable;

theft or manipulation of our proprietary business information, whether from insiders or external threat actors;

and cyberextortion for the return of data.

The impact to our data could subject our company to potential reputational damage, legal liability, regulatory fines and penalties, and increased compliance costs.

In addition, cybersecurity threats could also disrupt our oil and gas operations both domestically and abroad given that computers aid to control production, our equipment and monitor our distribution systems globally and are necessary to deliver our production to market.

A disruption, failure, or a cyberattack of these operating systems, or of the networks, software and infrastructure on which they rely, many of which are not owned or operated by us, could damage production, distribution or storage assets, delay or prevent delivery to markets, make it difficult or impossible to accurately account for production and settle transactions, or negatively impact public health or safety, economic security, or national security.

Although we have experienced occasional cybersecurity threats, none have currently had a material effect on our business, operations or reputation.

We will comply with government-imposed security requirements to implement specific mitigation measures to protect against cybersecurity threats to our information and operational technology.

In addition, we must continually expend additional resources to continue to modify or enhance our protective measures or to investigate and remediate any vulnerabilities detected.

We maintain an extensive network of technical security procedures and controls, training, and policy enforcement mechanisms to monitor and mitigate security threats and to increase security for our information, facilities and infrastructure.

Despite our ongoing investments in security resources, talent and business practices, we are unable to assure that any security measures, or measures implemented by third parties, will be completely effective.

If our systems and infrastructure were to be breached, damaged or disrupted, we could be subject to serious negative consequences, including disruption of our operations, damage to our reputation, a loss of employee and/or third party trust, reimbursement or other costs, increased compliance costs, litigation exposure and legal liability or regulatory fines, penalties or intervention.

In addition, we have exposure to cybersecurity incidents and the negative impacts of such incidents related to our data and proprietary information housed on third-party IT systems, including the cloud.

Any of these could materially and adversely affect our business, results of operations or financial condition, and any of the foregoing can be exacerbated by a delay or failure to detect a cybersecurity incident or the full extent of such incident notwithstanding reasonable security procedures and controls.

The prevalence of remote work has introduced additional

ConocoPhillips 2022 10-K

Risk Factors Table of Contents

cybersecurity risk.

Although we have business continuity plans in place, our operations may be adversely affected by significant and widespread disruption to our systems and infrastructure that support our business.

While we continue to evolve and modify our business continuity plans, there can be no assurance that they will be completely effective in avoiding disruption and business impacts.

Further, our insurance may not be adequate to compensate us for all resulting losses, and the cost to obtain adequate coverage may increase for us in the future.

Unresolved Staff Comments

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors