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By David Wethe and Mitchell Ferman
ConocoPhillips announced that Ryan Lance will retire after 14 years as the top boss and be succeeded by his financial chief Andy O’Brien next month.
Lance, the longest-serving CEO at a major oil company, will become executive chair of the board, and Konnie Haynes-Welsh, vice president for finance and controller, will become chief financial officer, the energy giant announced Thursday in a statement.
ConocoPhillips becomes the latest major US shale company since last year to see a retirement in its CEO suite after Occidental Petroleum Corp., Devon Energy Corp. and Diamondback Energy Inc., and the biggest global oil producer to welcome a new boss since BP Plc in April.
“I don’t think the company has ever been in a stronger position, and I wouldn’t leave if I didn’t think that was the case,” Lance told analysts and investors Thursday on a conference call. “Now’s the right time.”
Lance, 64, transformed ConocoPhillips into an exploration and production giant, becoming CEO of the upstream company that was split out from its downstream business Phillips 66 in 2012. The petroleum engineer from Montana Tech led the expansion of ConocoPhillips, which started with assets valued at an estimated $110 billion, into a market capitalization of $139 billion today that has even surpassed fully integrated supermajor BP.
Read More: Oil Giants’ Soaring Profits Clash With Waning Momentum in Stocks
Lance’s Covid-era shale deals in particular transformed ConocoPhillips into a Permian powerhouse — buying Concho Resources for $13 billion in 2021 and Shell Plc’s Permian Basin assets later that year for $9.5 billion, cementing the company as one of the top operators in North America’s hottest oil patch.
“While Andy O’Brien’s position as the likely successor to CEO Lance has been well telegraphed and anticipated by the investment community, we think the timing will still come as a surprise as most investors (including us) thought that CEO Lance would stay through 2029,” Arun Jayaram, an analyst at JPMorgan Chase & Co., wrote Thursday in a note to investors. “While we believe Andy is the right person to lead the company on a go forward basis, we do believe the stock’s valuation appropriately embedded a ‘Ryan Lance premium’ given his unparalleled track record of counter-cyclical investing and prudent portfolio management decisions over the past 10+ years.”
O’Brien, who began his career when the company was simply named Conoco in 1997, has held a number of leadership roles with the Houston-based operator including its Alaska and international units, as well as its liquefied natural gas business.
The company posted second-quarter earnings results on Thursday that beat analysts’ expectations.
Shares of ConocoPhillips, which have 23 buy ratings, eight holds and 1 sell, rose about 1% at 12:59 p.m. in New York. The shares have climbed 25% over the past 12 months, greater than the S&P 500 or Brent oil.
(Updates with CEO comment in fourth paragraph and comopany shares in final paragraph.)
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