ConocoPhillips (COP) reported second-quarter 2026 earnings of $3.9 billion, or $3.23 a share, after a first quarter in which earnings had fallen from a year earlier. Adjusted earnings were $4.0 billion, or $3.24 a share.

The reversal tracked realized prices. The company’s total average realized price was $62.33 per barrel of oil equivalent, 36% higher than the $45.77 per BOE realized in the second quarter of 2025. In the first quarter, the realized price had been $50.36 per BOE, 6% lower than a year earlier. Earnings and adjusted earnings increased from the year-ago quarter primarily due to higher prices.

Production did not move with earnings. Total company output was 2,248 thousand barrels of oil equivalent per day, down 143 MBOED from the same period a year ago. After adjusting for closed acquisitions and dispositions, production decreased 98 MBOED, or 4%. Organic growth from the Lower 48 was more than offset by the impact of the Middle East conflict on Qatar and higher Surmont royalties.

Lower 48 production was 1,479 MBOED, including 720 MBOED from the Delaware Basin, 202 MBOED from the Midland Basin, 363 MBOED from the Eagle Ford and 189 MBOED from the Bakken.

Cash generation followed the price recovery. Cash provided by operating activities was $7.4 billion. Excluding a change in working capital, cash from operations was $7.2 billion. In the first quarter, cash from operations had been $4.3 billion and CFO $5.4 billion after a $1.1 billion working-capital outflow.

The company funded $3.0 billion of capital expenditures and investments. It received $0.2 billion of disposition proceeds from the sale of noncore assets, repurchased $2.0 billion of shares and paid $1.0 billion in ordinary dividends. Share repurchases doubled from the first quarter, lifting total shareholder distributions to $3.0 billion. It is on track for a 45% return of CFO in 2026.

Chairman and chief executive officer Ryan Lance said the company delivered strong second-quarter results with exceptional operational performance, record production from its Permian position and disciplined execution. He said the company doubled quarterly share repurchases, achieved its $5 billion asset disposition target ahead of schedule, secured low-cost-of-supply opportunities in the Middle East and increased LNG offtake to 12 MTPA.

ConocoPhillips signed agreements to sell noncore Lower 48 assets for $1.7 billion, which closed in July, achieving the $5 billion disposition target ahead of schedule. It signed an agreement to acquire a 42% interest in a joint venture in the Kirkuk area of northern Iraq, with closing expected by year-end 2026, and an agreement for re-entry into Syria. Additional offtake of 2 million tonnes per annum brought total LNG offtake to 12 MTPA.

Cash and short-term investments ended the quarter at $8.1 billion, versus $6.7 billion at the end of the first quarter. Long-term investments were $1.2 billion. The company declared a third-quarter ordinary dividend of $0.84 a share.

Third-quarter 2026 production is expected to be 2.29 to 2.32 million barrels of oil equivalent per day. All full-year guidance items remain unchanged after the first-quarter update to production and capital guidance.

The company remains on track to achieve a $7 billion free cash flow inflection by 2029.