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HOUSTON - ConocoPhillips (NYSE:COP), a prominent player in the Oil & Gas industry with a market capitalization of $118.67 billion and annual revenue of $59.39 billion, has entered into a 20-year agreement to purchase 4 million tonnes per annum (MTPA) of liquefied natural gas from Sempra Infrastructure’s (NYSE:SRE) Port Arthur LNG Phase 2 project in Texas, the company announced Thursday. According to InvestingPro data, the company trades at an attractive P/E ratio of 12.7x.
The long-term sales and purchase agreement (SPA) will allow ConocoPhillips to offtake LNG on a free-on-board basis, supporting the company’s strategy to deliver natural gas to global markets.
This deal expands the existing partnership between the two companies. In July 2022, ConocoPhillips signed a similar 20-year agreement for 5 MTPA of LNG from Port Arthur LNG Phase 1 and acquired a 30% equity stake in that project, which is expected to begin operations in 2027.
"This SPA advances our global LNG portfolio strategy as we build a flexible and reliable LNG supply network to meet growing energy demand," said Ryan Lance, chairman and chief executive officer of ConocoPhillips. The company’s strong financial position is reflected in its 55-year track record of consecutive dividend payments, currently yielding 3.29%, and its GOOD financial health score according to InvestingPro analysis.
Jeffrey W. Martin, chairman and CEO of Sempra, noted that "the role of U.S. LNG in meeting the energy security needs of America’s allies continues to grow."
Unlike the Phase 1 agreement, ConocoPhillips’ participation in Phase 2 will be limited to offtake only, without an equity investment. The final investment decision for Phase 2 is still pending.
The Port Arthur LNG facility is being developed in Jefferson County, Texas. According to the press release statement, the companies view the project as an opportunity to connect American natural gas producers with growing overseas markets while supporting domestic economic growth and job creation. InvestingPro analysis suggests ConocoPhillips is currently trading below its Fair Value, presenting a potential opportunity for investors. For detailed insights and access to the comprehensive Pro Research Report covering ConocoPhillips and 1,400+ other US stocks, consider exploring InvestingPro’s advanced analytics platform.
In other recent news, ConocoPhillips reported its second-quarter earnings for 2025, surpassing expectations with earnings per share of $1.42, compared to the forecast of $1.38. The company’s revenue also exceeded projections, reaching $15 billion against the anticipated $14.91 billion. These results highlight the company’s strong financial performance in the recent quarter. Additionally, RBC Capital reiterated its Outperform rating for ConocoPhillips, maintaining a price target of $113, citing improvements in the company’s free cash flow. Piper Sandler raised its price target for the company from $123 to $124, maintaining an Overweight rating and noting ConocoPhillips’ peer-leading growth rate in free cash flow per share from 2025 to 2030. Melius Research initiated coverage on ConocoPhillips with a Hold rating and a price target of $117. These developments reflect a range of analyst perspectives on the company’s financial health and future prospects.
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