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Item 1A. Risk Factors

2026-02-17 compared with 2025-02-18 · 49 added, 64 removed, 224 unchanged (34% of the section changed)

7 unchanged sentences

These prices are tied to market prices that can fluctuate widely due to factors beyond our control.

For example, over the course of 2024, WTI crude oil prices ranged from a high of $87 per barrel in April to a low of $66 per barrel in September.

Given the volatility in commodity price drivers and the worldwide political and economic environment, including potential economic slowdowns or recessions, unexpected shocks to supply and demand resulting from future global health crises, such as those that were experienced in connection with the COVID-19 pandemic, or increased uncertainty generated by armed hostilities and geopolitical tension in various oil-producing regions around the globe, prices for crude oil, bitumen, LNG, natural gas and NGLs may continue to be volatile.

For example, over the course of 2025, WTI crude oil prices ranged from a high of $80 per barrel in January to a low of $55 per barrel in December.

Given the volatility in the drivers of commodity prices and our associated realizations, the worldwide political and economic environment, including potential economic slowdowns or recessions, unexpected shocks to supply and demand, or increased uncertainty generated by armed hostilities and geopolitical tension and escalations in various oil-producing regions around the globe, prices for crude oil, bitumen, LNG, natural gas and NGLs may continue to be volatile.

Prolonged periods of 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 our share repurchase program and the timing of such repurchases.

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Our ability to successfully execute on our plans to reduce operational GHG emissions intensity is subject to a number of risks and uncertainties and such reductions may be costly and challenging to achieve.

Our framework for managing climate-related business risk is set out in our Climate Risk Strategy, which describes our strategic flexibility, approach to reducing Scope 1 and 2 emissions intensity, technology choices and engagement efforts.

Our framework for managing climate-related business risk is set out in our Climate-related Risk Strategy, which describes our strategic flexibility, approach to reducing Scope 1 and 2 emissions intensity, technology choices and engagement efforts.

Among other things, we have set near- and medium-term GHG intensity reduction targets, as well as targets around flaring and methane.

Our ability to achieve the stated targets, goals and ambitions within the Climate Risk Strategy's framework is subject to a number of risks and uncertainties beyond our control, including government policies and markets, acceptance of carbon capture technologies, development of markets and potential permitting and regulatory changes, all of which may impair our ability to execute on current or future plans.

In addition, the pace of development of effective emissions measurement and abatement technologies, and the actual pace of development may be inadequate, or the technologies actually developed may be insufficient to allow us to achieve our stated targets, goals and ambitions.

Furthermore, executing our Climate Risk Strategy could be costly, is likely to encounter unforeseen obstacles, will proceed at varying paces and may be accomplished in a manner that we cannot predict at this time.

Our ability to achieve the stated targets, goals and ambitions within the Climate-related Risk Strategy's framework is subject to a number of risks and uncertainties beyond our control, including government policies and markets, acceptance of carbon capture technologies, development of markets and potential permitting and regulatory changes, all of which may impair our ability to execute on current or future plans.

In addition, the pace of development of effective emissions measurement and abatement technologies, and the actual pace of deployment may be inadequate, or the technologies actually developed may be insufficient to allow us to achieve our stated targets, goals and ambitions.

Furthermore, executing our Climate-related Risk Strategy could be costly, is likely to encounter unforeseen obstacles, will proceed at varying paces and may be accomplished in a manner that we cannot predict at this time.

We expect to be required to purchase emission credits and/or offsets in the future.

There may be an insufficient supply of offsets, and we could incur increasingly greater expenses related to our purchase of such offsets.

Even if we are able to acquire an adequate amount of such offsets at satisfactory prices, investors, regulators or other third parties may not perceive this practice as an acceptable means of achieving our emission reduction goals.

As advanced technologies are developed to accurately measure emissions, we may be required to revise our emissions estimates and reduction goals or otherwise revise aspects of our Climate Risk Strategy.

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 early 2021, we established a multidisciplinary Low Carbon Technologies organization with the remit of supporting our emissions reduction objectives, understanding the alternative energy landscape and prioritizing opportunities for future competitive investment.

Such potential investments may expose us to numerous financial, legal, operational, reputational and other risks.

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, if any, and we may suspend our evaluation or investment if we determine that applicable markets have not developed at the pace required to support further investment.

For example, as a result of the hydrogen and ammonia markets not developing at a pace required to support further investment, in 2024 we decided to suspend our evaluation of a low-carbon ammonia production facility on the U.S.

Furthermore, we may not be able to scale potential investments.

The success of our low-carbon strategy will depend in part upon the cooperation of government agencies, the support of stakeholders, the development of relevant markets for low carbon fuels, our ability to research and forecast potential investments, willingness of industry partners to collaborate and our ability to apply our existing strengths and expertise to new technologies, projects and markets.

We continue to evaluate low carbon opportunities for potential future investment in support of our operational emission reduction targets.

Such potential investments may expose us to numerous financial, legal, operational, reputational and other risks and may not ultimately contribute materially to operational emissions reductions.

The success of any such investment will depend in part upon the cooperation of government agencies, the support of stakeholders, the development of relevant markets for low carbon fuels, our ability to research and forecast potential investments, willingness of industry partners to collaborate and our ability to apply our existing strengths and expertise to new technologies, projects and markets.

Estimates of crude oil, bitumen, natural gas and NGL reserves are imprecise and may be subject to revision, and 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.

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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;

we may be forced to curtail our production of crude oil, bitumen, natural gas or NGLs, or we may not be able to meet all the objectives in our Climate Risk Strategy, such as reducing routine flaring.

we may be forced to curtail our production of crude oil, bitumen, natural gas or NGLs, or we may not be able to meet all the objectives in our Climate-related Risk Strategy, such as reducing routine flaring.

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

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Our operations are subject to hazards and risks that require significant and continuous oversight.

Our operations are subject to a variety of hazards and risks that require significant and continuous oversight, such as the monitoring, prevention or mitigation of or protection from 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 a variety of hazards and risks that require significant and continuous oversight, such as the monitoring, prevention or mitigation of or protection from explosions;

product spills;

severe weather;

geological events;

global health crises, such as epidemics and pandemics;

labor disputes;

geopolitical tensions and escalations;

armed hostilities;

terrorist or piracy attacks;

civil unrest or cyberattacks.

Our operations are subject to additional hazards concerning exposure to and potential release of pollutants and toxic substances, as well as other environmental hazards and risks.

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Any of these factors, or other cascading effects of such factors, could materially increase our costs;

negatively impact our revenues or ability to implement and advance our Climate Risk Strategy;

negatively impact our revenues or ability to implement and advance our Climate-related Risk Strategy;

and damage our financial condition, results of operations, cash flows and liquidity position.

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Any actual or perceived 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, as well as our ability to implement and advance our Climate Risk Strategy could be adversely affected.

Existing and future laws, regulations and internal initiatives relating to global climate change, such as limitations on GHG emissions or provisions aimed at reducing such 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 as well as our ability to implement and advance our Climate Risk Strategy.

For example, in 2024, New York and Vermont passed legislation seeking to hold certain energy companies financially responsible for state climate change mitigation and adaptation measures, following the "polluter pays" model of existing Superfund laws.

This responsibility may include paying into a fund for infrastructure repairs and recovery from extreme

ConocoPhillips 2025 10-K

Risk Factors Table of Contents

This responsibility may include paying into a fund for infrastructure repairs and recovery from extreme weather events that would otherwise be covered by the government.

weather events that would otherwise be covered by the government.

While only two U.S.

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Compliance with such legislation may expose us to significant additional liabilities.

Additionally, legislation has been introduced in certain U.S.

states that would provide Attorneys General, insurers and individuals a right to recover against certain energy companies for alleged climate change impacts.

Should such legislation become law, we may be exposed to additional, significant liabilities.

Furthermore, in December 2023, the EPA published a final rule that revises the regulations governing, among other things, the emission of methane 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 methane emissions from existing oil and gas facilities.

Also pursuant to the Inflation Reduction Act of 2022, the EPA published certain rules in 2024 to facilitate the determination and payment of a charge on methane emissions from selected facilities in the oil and natural gas industry, including many of the facilities operated by ConocoPhillips.

These final rules 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 2023, at the international community at the 28th Conference of the Parties (COP28), nearly 200 countries, including most of the countries in which we operate, renewed their commitment to deliver on the aims of the 2015 Paris Agreement.

COP28 included a decision on the world's first 'global stocktake' to ratchet up climate action before the end of the decade — including a goal to triple renewable energy capacity by 2030 — and for the first time its final agreement explicitly recommended "transitioning away from fossil fuels in the energy system."

However, in 2025 the EPA moved to dismantle some climate-related regulations (e.g.

delaying compliance deadlines for methane standards and proposing to eliminate most obligations under the Greenhouse Gas Reporting Program).

These policy swings create additional uncertainty for companies who need to plan for operations that will endure through administrations.

These regulatory changes may also complicate our ability to access non-operated or joint venture emissions data to complete our inventory of emissions.

Additionally, international climate initiatives, such as the United Nations Conference of the Parties summits, continue to shape the global response to climate change.

These summits can lead to commitments from numerous countries to meet the objectives of agreements like the Paris Agreement, through adopting country level regulation to reduce greenhouse gas emissions.

The implementation of current agreements and regulatory or judicial 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 require us to purchase emission credits or reduce emissions of GHGs from our operations.

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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 financial markets 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 financial market participants to potentially limit or discontinue investments, insurance and funding to oil and gas companies.

Attention to global climate change has also resulted in pressure from and upon stockholders, financial institutions and other financial market participants to potentially limit or discontinue investments, insurance and funding to oil and gas companies.

For example, a significant number of financial institutions have pledged to meet the goal of net zero by 2050, as well as setting interim targets for 2030 or earlier.

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As public pressure continues to mount on the financial sector, our costs of capital may increase.

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.

Furthermore, 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 and continuing through 2025, 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.

Additional lawsuits with similar allegations are expected to be filed by governmental entities.

In 2025, a putative class action was filed against oil and gas companies, including ConocoPhillips, seeking to hold energy companies liable for increased home insurance premiums allegedly due to climate change losses.

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

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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, liquidity and ability to implement and advance the Climate Risk Strategy.

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

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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 NGLs pricing and taxation;

other regulatory or economic developments (including the macro effects of international trade policies and disputes);

disruptive geopolitical conditions such as the escalation of geopolitical tension in the Middle East in late 2023 and through 2024;

other regulatory or economic developments (including the macro effects of U.S.

and international trade policies and disputes);

disruptive geopolitical conditions such as recent conflict escalation in the Middle East and Eastern Europe;

and international monetary and currency rate fluctuations.

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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, including our ability to implement and advance the Climate Risk Strategy.

Any of these actions could adversely affect our business or operating results, including our ability to implement and advance the Climate-related Risk Strategy.

ConocoPhillips 2025 10-K

Risk Factors Table of Contents

Risks Related to Our Acquisition of Marathon Oil

Integrating Marathon Oil's business may be more difficult, costly or time-consuming than expected, and we may fail to achieve the expected benefits and synergies of the Marathon Oil acquisition, which may adversely affect our business results and negatively affect the value of our common stock.

The success of our acquisition of Marathon Oil will depend on, among other things, our ability to integrate Marathon Oil with our business in a manner that facilitates development opportunities and realizes expected synergies.

We may encounter difficulties in integrating our and Marathon Oil’s businesses and realizing the expected benefits and synergies of the acquisition of Marathon Oil.

If we are not able to successfully achieve our objectives, the anticipated benefits of the acquisition of Marathon Oil may not be realized fully, or at all, or may take longer to realize than expected.

Prior to the completion of our acquisition of Marathon Oil, each of ConocoPhillips and Marathon Oil operated as an independent public company.

There can be no assurances that Marathon Oil’s business can be integrated successfully into ours.

It is possible that the integration process could result in the loss of commercial and vendor partners;

the disruption of our, Marathon Oil’s or both companies’ ongoing businesses;

inconsistencies in standards, controls, procedures and policies;

unexpected integration issues;

higher than expected integration costs;

and an overall post-completion integration process that takes longer than originally anticipated.

We will be required to devote management attention and resources to integrating Marathon Oil’s business practices and operations.

An inability to realize the full extent of the anticipated benefits of the acquisition of Marathon Oil, as well as any delays encountered in the integration process, could have an adverse effect upon our revenues, level of expenses and operating results, which may adversely affect the value of our common stock.

In addition, the actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized.

There are numerous processes, policies, procedures, operations and technologies and systems that must be integrated in connection with our acquisition of Marathon Oil and the integration of Marathon Oil’s business.

Any efficiencies related to the integration of Marathon Oil’s business may not offset incremental transaction and acquisition-related costs in the near term or at all.

If we are not able to adequately address integration challenges, we may be unable to successfully integrate operations or realize the anticipated benefits of the acquisition.

The market value of our common stock could decline if large amounts of our common stock are sold now that the Marathon Oil acquisition has been consummated.

We issued shares of ConocoPhillips common stock to former Marathon Oil stockholders.

Former Marathon Oil stockholders may decide not to hold the shares of ConocoPhillips common stock that they received in the acquisition of Marathon Oil, and ConocoPhillips stockholders may decide to reduce their investment in ConocoPhillips due to the changes to ConocoPhillips’ investment profile as a result of the acquisition of Marathon Oil.

Other Marathon Oil stockholders, such as funds with limitations on their permitted holdings of stock in individual issuers, may be required to sell the shares of ConocoPhillips common stock that they received in the acquisition of Marathon Oil.

Such sales of ConocoPhillips common stock could have the effect of depressing the market price for ConocoPhillips common stock.

Other Risk Factors Facing our Business or Operations

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

ConocoPhillips 2024 10-K

Risk Factors Table of Contents

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.

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• Other factors our Board of Directors deems relevant.

We paid a quarterly VROC to our shareholders in the first three quarters of 2024.

In the fourth quarter of 2024, we declared an ordinary dividend that incorporated the prior VROC equivalent per share payment and did not make a separate VROC payment.

VROC distributions remain an option in elevated price environments, to be authorized and determined by our Board of Directors in its sole discretion and depending on factors it deems relevant.

We paid a quarterly ordinary dividend to our shareholders in each quarter of 2025.

Our Board may determine not to pay a dividend in a quarter or may cease declaring a dividend at any time.

Additionally, as of December 31, 2024, $30.7 billion of repurchase authority remained.

In October 2024, our Board of Directors approved an increase from our prior authorization of $45 billion by a total of the lesser of $20 billion or the number of shares issued in our acquisition of Marathon Oil, such that the company is not to exceed $65 billion in aggregate purchases.

Additionally, as of December 31, 2025, up to $25.7 billion of share repurchase authority remained.

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.

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In addition, many of our vendors, including suppliers that are closely integrated into our business, have been victims of cybersecurity attacks that have accessed and exfiltrated information from their systems.

Our risks may be exacerbated by a delay or failure to detect a cybersecurity incident or understand the full extent of such incident notwithstanding our risk management processes and controls.

Our risks may be exacerbated by a delay or failure to detect a cybersecurity incident or to understand the full extent of such incident notwithstanding our risk management processes and controls.

We face risks associated with new and ever-increasing phishing techniques, hidden malware, as well as risks associated with electronic data proliferation and technology digitization.

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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