Welcome to the Second Quarter 2015 ConocoPhillips Earnings Conference Call. My name is Christine and I will be your operator for today's call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Ellen DeSanctis, VP-Investor Relations and Communications, ConocoPhillips. Ellen R. DeSanctis - VP-Investor Relations & Communications: Thank you, Christine, and hello to all of our participants today. With me on the call are Ryan Lance, our Chairman and CEO; Jeff Sheets, our EVP of Finance and our Chief Financial Officer; and Matt Fox, our EVP of E&P. Ryan's going to open the call this morning with some comments about the general business environment and then will turn the call over to Jeff and Matt for their customary second quarter comments. Q&A will follow that and we are going to ask that people limit their questions to one plus one follow-up. We will make some forward-looking statements this morning. And obviously our future performance could differ from our projections due to risks and uncertainties. Those are described on page 2 of this morning's material and in our periodic filings with the SEC. This information as well as our GAAP to non-GAAP reconciliations and other supplemental information can be found on our website. And now it's my pleasure to turn the call over to Ryan. Ryan M. Lance - Chairman & Chief Executive Officer: Thank you, Ellen and thank you all for joining the call today. As Ellen said, before we dive into the second-quarter results, I want to take the opportunity to provide some broad comments about our approach to the business in the current price environment. So let me give you the punch line of…

Thank you. And our first question is from Guy Baber of Simmons and Company. Please go ahead. Guy A. Baber - Simmons & Company International: Thanks very much for taking my question. I had a couple. First, was just hoping to discuss the decision making progress around determining whether to increase or decrease unconventional activity levels later this year and into 2016? You mentioned the development program discretion, so just wanted to dive a bit deeper into that. I think the prior view was to begin increasing the rig count the back half of this year, but oil prices have obviously weakened and you obviously have a lot of flexibility next year with $2 billion in major projects rolling off. So could you just help us understand the framework for determining unconventional activity spending levels as we go into next year? Ryan M. Lance - Chairman & Chief Executive Officer: Yeah, Guy, thanks. As we laid out in April, we saw some modest increases in the prices over the next couple of years in our path to sort of our working the medium-term in 2017. And if we see the – and in that plan we had some ramping up of our unconventional activity assumed in that plan. As our capital flexibility increased and our project capital was rolling off Surmont and APLNG, we're going to direct that to the unconventionals which are shorter cycle time, higher returns, and just better opportunities for the company. I would say if prices that we're seeing today, sub $60 Brent, high $40s and low $50s, we don't have plans to increase the capital and ramp up in the unconventionals if these kind of prices persist. So we're watching the space pretty closely. As Matt said, we'll announce our capital later this year, but…

Thank you. Our next question is from Doug Terreson of Evercore. Please go ahead.

Good morning, everybody. Ryan M. Lance - Chairman & Chief Executive Officer: Good morning. Ellen R. DeSanctis - VP-Investor Relations & Communications: Doug. Jeff W. Sheets - Chief Financial Officer & Executive Vice President: Doug.

Ryan, I wanted to continue on Guy's question about the downward revisions to operating capital cost and specifically you highlighted on slide five four different categories, and you just touched on deflation capture but I also wanted to see if you could comment on – or give us a little bit more insight on what you mean by discretion in development programs, deepwater reductions, program efficiencies, just a few more specifics there, if you have any? Ryan M. Lance - Chairman & Chief Executive Officer: Yeah, Doug. Be happy to. So we described sort of the deflation capture and efficiency that we're seeing in the portfolio to lower the capital required to keep flat production over time, and that's clearly something that we would dial in if we saw these kinds of prices persist. We talk about – something we don't talk about is asset sales. We think in the portfolio our size we have an ongoing rationalization program that keeps eliminating the bottom end of the portfolio and that's certainly there. We've got a lot of flexibility. The unconventionals are shorter cycle time and we can ramp those up at different speeds responding to the commodity price environment that we find ourselves in. So as we try to describe the actions, the levers and the tools, those are some of them. You mentioned the deepwater exploration. We're working through that as well but would expect that to be incremental in terms of capital savings and operating cost savings as we look forward at this kind of price level.

Okay. And then finally on cash flow, when using consensus estimates, divestitures and borrowings in the quarter, it seems like your dividend is covered for 2015, and on this point I wanted to see where your after-tax borrowing costs were on the recent borrowings in the period. And then also the status of any other funding sources such as a revolver, commercial paper or whatever you deem relevant, so maybe a question for Jeff? Jeff W. Sheets - Chief Financial Officer & Executive Vice President: Yeah, sure. Doug. As we mentioned in our brief remarks there, we were out in the debt markets in the second quarter and we issued $2.5 billion worth of debt. That was a mix of fixed and floating, and on average that was a 1.8%, 1.9% interest rate on a pre-tax basis, so you could tax effect that. So we ended the second quarter at $3.8 billion in cash on the balance sheet. It probably takes $800 million to $1 billion to operate our business, and then in addition to that we have about a $6 billion liquidity line that's undrawn currently.

Okay. Great. Thanks a lot. Ellen R. DeSanctis - VP-Investor Relations & Communications: Thanks, Doug. Ryan M. Lance - Chairman & Chief Executive Officer: Thanks, Doug.

Thank you. Our next question is from Doug Leggate of Bank of America Merrill Lynch. Please go ahead.

Thanks. Good afternoon, everybody. I guess, Ryan, first of all, thank you for your remarks at the beginning of the call of the dividend. I think that's pretty clear, but I've got a couple of questions around the strategy, how that changes in a low oil price environment. First one's really on exploration. So you've cut a rig obviously this year you had a fairly large commitment. What does this say about the exploration strategy going forward, given the resource depth that you have and given that that's a key area of discretionary spending? Are you backing away from exploration post 2015? And I've got a follow up, please. Matthew J. Fox - Executive Vice President-Exploration & Production: Doug, I think I'll take that. And so the specific announcement we made earlier this month is only related to canceling the Ensco drillship. And that by itself is going to result in a decrease in our deepwater exploration capital by $300 million to $500 million a year for the next three years as a function of what the spread rate and the equity position would be. We're still going to be conducting deepwater exploration, though, through 2015 and into 2016. We have – we're appraising our existing discoveries in the Gulf of Mexico and West Africa and high grading the portfolio to fulfill the remaining rig commitments that we have. But more to the strategic question that you were asking, we are looking more broadly at our deepwater portfolio and considering alternatives to that portfolio. But anything we do is going to have to preserve value from the discoveries that we've made in the portfolio that we've built up over the last few years. So there is still a strategic question on the long-term position of deepwater. Now we have a very strong position in the unconventionals and as you mentioned, a very strong position across the resource base as a whole. So the strategic emphasis would be moving more towards developing the existing resource base but there still is a significant role for exploration to play in bringing new resources into the portfolio. So there will be more to come in this to over time, Doug, as we firm up those longer-term strategic implications of the deepwater decision.

Appreciate the answer, Matt. I guess the follow up is probably for you as well, I'm guessing, because there has been, I think, you and I had some time together earlier this year. There was some talk about 80,000 barrels a day of potential non-core production. With your comments about, one has to imagine that there is disposal potential in some of your existing undeveloped discoveries, how should we think about the scale of what you envisage to be your disposal backlog, if that's the right way to ask the question? And how would that capital be redeployed? Would it buy back stock? Would it shore up on the balance sheet? How would you use the spending? And then I'll leave it there. Thank you. Matthew J. Fox - Executive Vice President-Exploration & Production: Yeah. So, as Jeff and Ryan both mentioned, we expect to be some form of dispositions going on sort of continuously in the portfolio just to trim up. And it is nonstrategic. So for example, you may have seen yesterday or the day before that we are going to market our Cook Inlet position in Alaska. I think it's quite well known that we've had a package out there in Canada for nonstrategic assets and big gas assets, and we have some assets in the lower 48 that fit the same criteria. So we do have some tactical dispositions that we're currently marketing at the moment. So, I mean, the use of that cash would be to fund our dividend and our ongoing capital programs of the... Ryan M. Lance - Chairman & Chief Executive Officer: Yeah, and I'd jump in there, Doug, a little bit. The priorities are the dividend to the shareholder, the balance sheet, and then a growth we can afford.

Thank you. Our next question is from Paul Sankey of Wolfe. Please go ahead.

Hi, everyone. Ryan M. Lance - Chairman & Chief Executive Officer: Hi, Paul. Ellen R. DeSanctis - VP-Investor Relations & Communications: Paul.

You talked about 2017 cash flow neutrality and an $8 billion hold for that number. Are you implying that you are actually going to outspend cash flow between now and then? Or are you essentially going as fast as you can to get to cash flow neutrality? Ryan M. Lance - Chairman & Chief Executive Officer: I think it largely, Paul, depends on our outlook on the commodity prices, which we're watching pretty closely right now. But we would have some slight outspend in 2016 if we continue to ramp up and hold the capital at $11.5 billion, but that's something that we're looking at dropping down at the current price and continuing to exercise the flexibility. What people tend to forget about though, starting in 2016 and going into 2017, is we have pretty significant ramp in production from Surmont Phase 2 and from APLNG. And that's capital and cost that we spent the last four years to five years. We've got production coming on in 2016 and 2017 that people tend to forget about that is right in front of us. Surmont 2 just first steam earlier this year, we'll have first oil here imminently. And first cargo is coming out of APLNG. So the intention is to get to cash flow neutrality as quick as we can. And we're just trying to demonstrate that we've got a lot of flexibility, even at the current lower prices we're seeing today.

Yeah, I understand. And I probably should have prefaced it by saying if we assume the strip, which I guess is something around what you're talking about here, is sort of a $60 outlook is what we see on the futures market? Ryan M. Lance - Chairman & Chief Executive Officer: Yeah, and that's why we've tried to put that into our slide at that kind of a price level just to give you some sense of how we would manage the business at that kind of a deck.

And I think you've been asked this and you've tried to answer it. Forgive me if I just slightly missed what was being said. But can you just run over again the deflation element here, the lower service costs here? I know you've done some excellent work in your presentation showing how costs are changing. When I was with Mr. Hirshberg, he said that this is actually lagging, this is last year's data. Would you mind just going back over how we get from an $11.5 billion, $11 billion run rate this year all the way down as low as $8 billion, seemingly simply if oil stays at $60? Ryan M. Lance - Chairman & Chief Executive Officer: Yeah, Doug (sic) [Paul] (32:40). So in April we talked about deflation, the $700 million that we were trying to capture. We now see that probably closer to $900 million. And obviously if the kind the strip prices that you're talking about persist, we'd expect that to continue down as well. So as we look out at that, the $8 billion is really to stay flat. The $9 billion or the $10 billion or $11.5 billion grows our production based on the amounts that we laid out in April. So we've got a lot of flexibility between the $11.5 billion that we laid out to the marketplace in April versus this what we're calling $8 billion just to stay flat production. So what we're trying to describe to folks is, with the capital flexibility, the deflation and the efficiencies that we're creating in the business is just adding to the flexibility on the capital side of the program. It gives us a lot of choice as we go into the back half of this year in deciding what kind of program we want to execute in 2016 and 2017 on our pathway to get to cash flow neutrality as quickly as we can.

That's great, Ryan. Thanks. And if I could just add in, we've had the idea that you would IPO the exploration business and have it as a standalone business. I assume you'd want to retain some access to that business as opposed to, for example, disposing of it all together but at the moment it feels like the potential for you to spin in (34:10) that business is going to be undervaluing it essentially. Ryan M. Lance - Chairman & Chief Executive Officer: Yeah, I think that's right. We're looking at all the alternatives right now, Paul, about that business. And we'll have more to come on that as we progress later in the year and into next year.

Thank you. Our next question is from Ryan Todd of Deutsche Bank. Please go ahead.

Great. Thanks. Maybe one more follow up on the cost issues. The incremental $300 million hit to OpEx that we saw on this, again, were you saying was that just incremental capital deflation? Is this more of an issue of pace? Or to be clear, are you trending towards much larger levels of cost reductions on a two-year basis than you had expected earlier? Jeff W. Sheets - Chief Financial Officer & Executive Vice President: Yeah, I can take that one, Ryan. Yes, we're definitely running ahead of schedule on where we thought we're going to be on reducing cost. And as we mentioned, it's a combination of deflation in the business, some minor amount of FX benefits, but it's really mostly related to us figuring out ways that we can drive costs out of our business. So we talked in terms of having this $1 billion cost reduction target. We're feeling really good about our ability to achieve that or go beyond that.

Great. Thanks. And then maybe on, at APLNG, you talked about hopefully a cargo during the fourth quarter. Can you maybe talk about what are the remaining steps that you have to achieve there at APLNG between now and the fourth quarter to get that first cargo? Matthew J. Fox - Executive Vice President-Exploration & Production: Yeah, so we're at the stage where we're beginning to load refrigerants. We have go – a process we've got, that's cold, turn the (36:10) mechanical runs, getting all the equipment (36:12) so the compressors are running and everything's running well. And that whole process of that sort of integrated completion and then hook-up, commissioning of the plant is all in hand and the gas is there on the upstream side to feed the plant. So we're feeling good about the ability to get the initial cargo sometime in the fourth quarter.

Great. Thanks a lot. Ellen R. DeSanctis - VP-Investor Relations & Communications: Thanks, Ryan.

Thank you. Our next question is from Blake Fernandez of Howard Weil. Please go ahead

Folks, good morning. Thanks for taking the question. I'm sorry, I'm going to go back on cost structure as well. I'm just curious about maybe the sustainability of some of the cost deflation that you're witnessing. Obviously industry in general sees costs coming down, but I'm just curious what steps are being taken to ensure that these are more structural so that they don't simply re-inflate once the commodity finally does recover. Ryan M. Lance - Chairman & Chief Executive Officer: Yeah, Blake, we're taking a pretty hard look top to bottom in terms of how we run the company and we're considering where we came from as an integrated company and the size, scale and capability we have as that company and looking at taking the opportunity now to a bit right-size relative to how an independent company like ConocoPhillips finds itself today. So there's things that we do in our company that were a remnant of the integrated company in terms of how much functional expertise to have in the center, how much oversight versus that accountability that goes out to the B (37:50). We've done a pretty good job of building that model on our lower 48 unconventional business. We're going to extend that across the whole company with less of a one-size-fits-all and more of a fit-for-purpose design, recognizing that an asset in the lower 48 is different than an asset in the North Sea or up in Alaska or offshore Australia. So really, our employees get it, they understand it, they understand where we're seeing. And we're already seeing the benefits of that shift. We've been working on that over the last two to three years as we've tried to build the culture of an independent company. Now certainly with the downturn it just puts more of a laser focus on the need to accelerate that, and to make it more prominent throughout the whole organization and the whole company, and then I think that will make it much more sustainable.

Thanks, Ryan. The follow up is on the strategic shift toward shorter cycle type of projects. I guess when I think of Deepwater, definitely longer-term, highly capital-intensive, but they do tend to contribute fairly well to earnings. And when I look at the lower 48 contribution for earnings it seems to be one of the areas that's the weakest. As you kind of shift more toward these shorter cycle projects, do you anticipate that to have a negative impact on your actual earnings profile? Or is that a concern? Jeff W. Sheets - Chief Financial Officer & Executive Vice President: I think you can – I'll take that one. When you look at lower 48 earnings, currently a driving factor there is really the level of depreciation that's being charged currently as we develop the unconventionals. And we're probably having depreciation charges which are a third larger than they'll be longer-term because of the reserve booking schedule and kind of the relative conservatism that's forced upon us as we book according to the rules that are out there. So as we go through time you're going to see depreciation rates come down in the lower 48 and that's going to have a significant improvement in the earnings from that segment. The other thing of course as you've heard us talk about, and you've heard the industry talk about, is just the cost levels that it's taking to develop reserves in the unconventionals have come down dramatically, and that will reflect itself in lower depreciation rates as well going forward over time. So yeah, where you do have fairly weak earnings coming out of our lower 48 segment over time you will see – currently, you will see those improve as we go forward.

Thank you. Our next question is from Ed Westlake of Credit Suisse. Please go ahead.

Yeah. Two very quick questions on the $60 breakeven again. Sorry, that would be what 2017 production, the same that you have laid out in the past or are you changing that production growth? Ryan M. Lance - Chairman & Chief Executive Officer: No. It's the same, Ed.

Okay. Great. Jeff W. Sheets - Chief Financial Officer & Executive Vice President: Yeah, as Ryan mentioned, a lot of the production growth is coming from things that we've already invested in.

Yeah. Okay. And then presumably even on that stay flat there would still be some positive cash margin shifts as you still back out some of the older gas production that's still in that mix as you get out to 2017 even on flat CapEx? Ryan M. Lance - Chairman & Chief Executive Officer: No, absolutely. So when you look at the Canadian – the Surmont 2 addition and the APLNG that's coming on at a higher margin than a large part of our portfolio with the North American gas piece that you described, Ed.

And then... Jeff W. Sheets - Chief Financial Officer & Executive Vice President: We always talk about margins in terms of kind of flat price cash margins. One of the things we are seeing as we talked about it as well, is costs are coming out of the business as well which improve margins across the board.

So it's kind of dividend, plus a little bit? And then just on APLNG, I mean, obviously, everyone's observed that the Asia LNG market has suddenly faced a sort of dramatic drop in demand and there's obviously a lot of cargos coming on to compete for that gas demand. I mean, clearly first cargo is an important milestone and the CapEx will fall for the project, and therefore the cash contribution from the APLNG associates will improve which we'll see next year. But can you talk a little bit about how you are placing that product into the market for train one and train two given weak demand? Ryan M. Lance - Chairman & Chief Executive Officer: Yeah, right now we're working through that, Ed. And I know there has been a lot of speculation in the marketplace around the contract, and the SPA that we have with the buyers. We have two buyers, we have a Japanese buyer for train two. And train one is going to China to Sinopec. And we have an SPA, we have a contract with them. They've got diversionary rights within China and with our approval which we have provided, they've got diversionary rights outside of China as well. And we're working with them to understand the volume that they can take into the country in 2016 and as we go forward into 2017 and I'd just remind people that our contract is a take-or-pay contract and we expect they're going to live to the terms of that contract.

Thank you. Our next question is from Paul Cheng of Barclays. Please go ahead

Hey, guys. Ryan M. Lance - Chairman & Chief Executive Officer: Good morning, Paul.

Maybe just several quick questions. The first one is probably for Jeff. Jeff, on the second quarter, what is your cost saving run rate and what do you expect those run rate are going to look like in the third and the fourth quarter? Jeff W. Sheets - Chief Financial Officer & Executive Vice President: I'm not sure how to interpret your question, Paul. So when you say cost savings, I mean, are...?

Right. I mean that you have a program there to reduce costs, and I'm trying to understand how much of that cost savings is already reflected in your second quarter result and what is the incremental improvement we could expect in the remainder of the year into next year? Jeff W. Sheets - Chief Financial Officer & Executive Vice President: So when we – I'll take you back to the analyst presentation. When we talked about 2014 cost levels of $9.7 billion and we were going to take that down to $8.7 billion, that was the $1 billion we were taking out, and we said we thought we'd get halfway there in 2015. So we gave cost guidance of $9.2 billion. So we're well along that path is what we're pointing out today and we actually revised that $9.2 billion down to $8.9 billion. So we're going to continue to see that as we go through the year, and you can see that we've had some pretty low cost levels in the first part of the year. The difficulty I have with your question is there is variability from quarter to quarter as we go through the year, but if you look at the whole year, we're running well ahead of where we thought we were going to be for the year.

Do you have a number that you can share? In the second quarter what is the cash operating cost? Jeff W. Sheets - Chief Financial Officer & Executive Vice President: Well as – well, you can look at our – at our... Ellen R. DeSanctis - VP-Investor Relations & Communications: Paul, it's in the supplemental. Jeff W. Sheets - Chief Financial Officer & Executive Vice President: ...balance sheet, it was $2.1 billion essentially in what we call cash operating cost, which is production cost... Ellen R. DeSanctis - VP-Investor Relations & Communications: Operating. Jeff W. Sheets - Chief Financial Officer & Executive Vice President: ...G&A cost and the G&A associated with exploration was $2.1 billion.

$2.1 billion, so annualized it is $8.4 billion, but you talk about... Jeff W. Sheets - Chief Financial Officer & Executive Vice President: Right. That...

...the full year is $8.9 billion? Jeff W. Sheets - Chief Financial Officer & Executive Vice President: Yeah, so again, that's why I point out that we have seasonality in our costs related to turnaround activities and we'll have some costs that'll increase as we go through the year and as production ramps up in some of the new projects.

And maybe the second question is for Ryan. Ryan, I presume that now you have reset this year the CapEx at $11 billion, so that the next several years the base case is $11 billion also. Under what commodity price – let's assume that if the commodity price stays where we are, what is the CapEx going to look like? Is it going to stick at the $11 billion end up that you're going to reduce it? I'm trying to understand that, what's the criteria you're going to go for? Are you trying to – because clearly you're not going to reach the cash flow neutral mark (46:05) this year, so what kind of criteria we should be looking at that would set your CapEx program? Ryan M. Lance - Chairman & Chief Executive Officer: Well, as I said, Paul, we'll try to – we'll set a capital budget later in the year as we look at what the commodity price and what we can afford. When we laid out a plan at $11.5 billion, that assumed some slight modest recovery in prices. If we see prices aren't recovering and they remain at kind of today's level going forward into 2016, you shouldn't expect us to be spending the $11 billion, $11.5 billion, $11.5 billion we laid out in April or the $11 billion that we're talking about today. So no. We're going to manage the whole system to make sure we reach cash flow neutrality. We're doing the right things to grow the business and fund the maintenance capital but you should expect it to become lower. And we'll provide more clarity around that as we go through the course of the year and we watch where commodity prices end up.

Thank you. Our next question is from Roger Read of Wells Fargo. Please go ahead.

Thank you. Good morning. Ryan M. Lance - Chairman & Chief Executive Officer: Good morning, Roger. Ellen R. DeSanctis - VP-Investor Relations & Communications: Good morning, Roger.

I guess maybe to get back to some of the internal cost cutting and the commentary about structuring the company more like an E&P as opposed to a large integrated, and then given where you are on the operating cost savings, what more should we expect to see from a streamlining or the head count reductions, that sort of structure? Ryan M. Lance - Chairman & Chief Executive Officer: Well, as Jeff said, we're well on our way to the $1 billion cost challenge. We think we're certainly going to hit that, probably exceed that. The exploration decision that we made and announced earlier, as I said, that's going to be incremental both on a capital and an operating cost side. Will have some impact on the organization as we think about that going forward, so we think there's running room beyond where we're at, but it's something that we're spending a lot of time looking at. And with respect to re-looking at how we run the company, that's going to deliver sustainable reductions for the longer term. So it's not just about taking $1 billion or more out of the cost system in the short (48:35) deflation, it is about making that a sustainable cut over time, and that's where our focus is at right now.

Okay. Great. Thanks. And then for Jeff, looking at the cash flow statement or the cash flow waterfall, working capital was a negative to this point. As you think about latter part of this year or 2016, is there a – an opportunity to pull out of working capital as well as cash flow from the business, as well as potentially more debt? What are some of the things we should think about maybe as some of these large projects start to come online, as to whether they consume or free up capital, in addition to the CapEx changes? Jeff W. Sheets - Chief Financial Officer & Executive Vice President: I think from a working capital perspective, what we've seen in the first half of the year is really just the effect of a couple of things is, accounts payable coming down because of the lower activities on the capital side. This is really the – as we've moved our capital program down from the $16 billion, $17 billion kind of level last year to this $11 billion this year, you've got this lag effect on working capital. Now that we're kind of down at the level that we're going to be at on capital, we wouldn't expect that effect to continue in subsequent quarters. And then as prices come down, you've seen changes in, kind of, our taxes payable as well come off and be a use of cash from a working capital perspective. That's pretty well out of the system now also. So we wouldn't anticipate that being a significant change in use of cash going forward for us. As I mentioned on the call, we still have really solid access to the capital markets to the extent that we – that it's necessary to go beyond our cash balances to fund our capital and our dividend in the period before 2016 when we get to cash flow neutrality. We certainly have the ability to do that in a very effective way.

Thank you. Our next question is from Evan Calio of Morgan Stanley. Please go ahead. Evan Calio - Morgan Stanley & Co. LLC: Hey. Good afternoon, guys. Ellen R. DeSanctis - VP-Investor Relations & Communications: Hey, Evan. Ryan M. Lance - Chairman & Chief Executive Officer: Evan. Evan Calio - Morgan Stanley & Co. LLC: Yeah, maybe my question's related to the U.S. earnings power comment and offshore exploration reduction. Maybe for Matt, I mean, I know you look at resource upstream globally and the savings and efficiencies onshore, U.S. unconventional have been most notable to date. I mean, do you see the scope for international to significantly move down the cost curve to compete for greenfield capital? Or in this strip environment, do you see the U.S. and your U.S. unconventional position as economically superior and effectively taking market share? Matthew J. Fox - Executive Vice President-Exploration & Production: So does that mean – I'm thinking from a deflation perspective, more than half of the deflation that we've seen has been in North America so far. And historically, the international business has been slower to respond from an unconventional – from a deflation perspective, so we still expect to see more of that come in over the next months and into 2016 on the international side. And as we see this emerge, then we can understand what implications it has for capital costs, and then that has implications for the viability of projects across the portfolio as a whole, so that they – what we're seeing emerge from a deflation perspective, will influence how we think about capital allocation in the years ahead. Evan Calio - Morgan Stanley & Co. LLC: Right, and efficiencies here as well. I mean, at current strip pricing, what's the break-even period on one of your $8 million to $9 million Eagle Ford wells? Is that – are we a little over a year? What's... Matthew J. Fox - Executive Vice President-Exploration & Production: I think we're still in the 12-month to 18-month sort of level to get – for break-even on an individual well. Evan Calio - Morgan Stanley & Co. LLC: That's pretty powerful. If I could slip in just one other – if, just a question on the – if you can discuss it, the changes to working capital associated with investing activities in the quarter. That was sequentially higher. What drove that reclassification, the working capital change from investing activity? Jeff W. Sheets - Chief Financial Officer & Executive Vice President: Yeah, I think you're noticing that on the cash flow statement this time we broke working capital out from related to operating activities and investing activities. We did that to provide more clarity on what was really driving the changes in working capital. And, again, as I mentioned a couple times now, the real driver has been just the slowdown in the capital investing activities.

Thank you. Our next question is from Alastair Syme of Citi. Please go ahead.

Hi, everyone. Jeff, I think you noted a few times about the bond offerings in the quarter. But I think I'm right in saying that you saw a negative credit watch. So I kind of was wondering where those discussions sit in the current environment with the various rating agencies and how vociferously you would feel you'd need to defend a single A rating? Jeff W. Sheets - Chief Financial Officer & Executive Vice President: So where we're currently rated is A1 with Moody's, which is the highest single A. And we're at a middle single A with Standard & Poor's and Fitch. And all of them, as you mentioned, have us on a negative outlook. All three of the agencies confirmed our rating in conjunction with the $2.5 billion bond offering that we did in the second quarter. So I think the position that they're in is they're waiting to see how commodity prices play out and what levels of incremental borrowing we might do before we get to cash flow neutrality in 2017. But as we said before, as we look at different scenarios of what borrowings we might do and before we get to neutrality in 2017, we're still very comfortable that level of borrowing is not going to take us out of the single A range. It could knock us down a notch within that range, but it wouldn't take us out of that range.

And defending single A would be paramount, would it? Jeff W. Sheets - Chief Financial Officer & Executive Vice President: Well, we think that's the right place for a company like ours to be. It just fits strategically with the direction we're heading as a company to be one that has a priority on shareholder distributions, like we've talked about with the dividend, that is pursuing modest growth and wants to have the capability to do that through all kinds of different commodity price cycles. So we do feel like that's the appropriate credit space for us to be in.

Okay. Thank you very much.

Thank you. Our next question is from John Herrlin of Société Générale. Please go ahead.

Yeah, hi. Thank you. With the Cook Inlet sale, does that include the Kenai plant? Matthew J. Fox - Executive Vice President-Exploration & Production: No, it doesn't.

Okay. Thanks, Matt. Next one. You talked a lot obviously about efficiencies and cost savings and optimizations and deflation, all that. You're a big company, as Ryan talked about earlier. You have the ability technically to run your fields differently than, say, smaller companies. So how much of your overall performance is related to that type of self-help from, say, field automatization so you can minimize unplanned downtime and enhance recoveries? Matthew J. Fox - Executive Vice President-Exploration & Production: So, it's just part of our cost reduction process. We are looking at our operating costs, our lifting costs across the company as a whole. And we've for years have had a very strong operations excellence program that we've applied across the organization. Frankly, for the past few years, we've been focusing that on increasing production. That's what you do when oil prices are $100 a barrel. But the same, the tools exist within that capability to focus that more on cost reduction. So we are refocusing our operations excellence on making sure that we're getting the right balance of the right operating efficiency and the right costs in this price environment. So having that capability and that sort of integrated view across the whole organization is really good. Ryan M. Lance - Chairman & Chief Executive Officer: Yeah, and I would add, John, to that that as we talk about the independents, some of the capability we have as a company, our functional excellence around integrated operation centers and the ops excellence plans that Matt talked about, the reservoir understanding and characterization, the EUR, the stimulated rock volume work that we're doing, we're going to maintain that and expand that capability because we think it's differential in leveraging in the independent world.

Thank you. Ellen R. DeSanctis - VP-Investor Relations & Communications: Thanks, John.

Thank you. Our next question is from Jason Gammel of Jefferies. Please go ahead.

Thanks very much. I had another question on long-cycle time versus short-cycle time investments and you're clearly at a point where you're hitting an inflection point and capital is dropping away and production ramp is coming in. But I suppose long-cycle time by definition means that if you're not investing today, then you don't have those big step changes in production in, let's say, the 2019, 2020 timeframe. So my question is two-fold. First of all, do you expect to move towards FID on any major capital projects this year and next year, just given the capital-constrained environment? And then the second part of the question is, over the cycle, how much CapEx above the $8 billion of maintenance CapEx would you want to be putting into these longer-cycle time projects relative to your short-cycle time investment opportunities? Matthew J. Fox - Executive Vice President-Exploration & Production: On the FID question, we will be making final investment decisions on a few relatively small projects as we go through this year and into next year. We're in a fortunate position that most of our major projects that are in the portfolio now are not mega projects and they're projects that we've executed before, like adding drill sites in Alaska or adding platforms in the North Sea or in China, so that they're all relatively small-scale things. So we do have the scope within the capital program to continue to invest in those longer-cycle but smaller-scale projects. And we will do that. One of the strategic questions which I think is what you're getting at, Jason, is for the long term what is the right balance for a company like us between the more flexible short-cycle investment opportunities, of which we have a lot within our development programs in particular in unconventional business, and then these longer-cycle projects of the characteristics I just spoke about. And that, we have flexibility to, we have to decide exactly what that ratio should be and that's one of the lenses that we look at our strategy through.

Okay. Thanks, Matt. Appreciate the thoughts.

Thank you. Our next question is from Neil Mehta of Goldman Sachs. Please go ahead. Neil S. Mehta - Goldman Sachs & Co.: Good afternoon. Ryan M. Lance - Chairman & Chief Executive Officer: Hi, Neil. Ellen R. DeSanctis - VP-Investor Relations & Communications: Hey, Neil. Neil S. Mehta - Goldman Sachs & Co.: I appreciate that incremental disclosure on cash flow neutrality in 2017. Definitely been top of mind for investors. Two more industry-focused questions. I guess the first one, Ryan, Speaker Boehner yesterday came out in favor of crude exports. Senate, I think as we speak, is at least discussing it. Flipside is, we're going into an election year, just want to get your thoughts on the latest temperature on this issue as you've really been leading the charge on behalf of the industry? Ryan M. Lance - Chairman & Chief Executive Officer: Yeah, thanks, Neil. No, it was – we're glad to see. We've been working with the Speaker's office to get them to support the repeal of the ban and get it up for a vote later this year, and I think we made some significant progress, both in the House and the Senate. And of course the Speaker's comments yesterday were well received by the industry and everybody. I still would – it's still going to be a little bit of a tough uphill climb. There's – we're getting bipartisan support, both in the House and the Senate. We could use a little bit more of the democratic support for it, so we're working on that. But what chances do I give it of passing this year? We – I haven't climbed to 50%, but it's encouraging to see that we may get a vote, at least an up/down vote in at least one of…

Thank you. And our last question is from James Sullivan of Alembic Global Advisors. Please go ahead.

Hey, guys. Thanks for fitting me in. Just wanted to be very crystal-clear on one point. Obviously you guys had highlighted a 2014 to 2016 operating cost to go back to that issue – reduction of $1 billion of which you'd said about 70% was supposed to be, roughly 70% was supposed to be structural savings. Am I right in thinking that that was really before you guys had envisioned a strategic review of the kind that has been talked about a couple times regarding streamlining some of your, let's call, the major-like execution capacities? Which would – is it right to think of those as incremental, potential incremental structural cost savings outside of that original first $1 billion? Ryan M. Lance - Chairman & Chief Executive Officer: Well, no, James. When we laid out the $1 billion we kind of had a vision that we were going to go through this process and make some structural changes to the company. So I would say that some, not all, but many of those structural changes are built into the $1 billion trajectory that we're on. As Jeff described, I think we're ahead of plan and our expectation is that we'll generate more savings beyond the $1 billion. And then the exploration decision that we made not to pursue, continue pursuing some of the deepwater, that is incremental to the $1 billion decision, and we're working through what the implications of that given that we have some portfolio and discovered portfolio that we're going to continue to invest in or monetize in other ways.

Okay. That makes sense. So down-shifting in that way would be the incremental piece. Okay. Just a separate thing kind of following up on the quarterly discussion regarding long, short cycle. But – and correct me if there has been a change in this – but looking at AKLNG. As I understood it, there was a potential for that to proceed to pre-FEED in 2016 or at least graduate to the next step in the development process, which would probably require a material capital contribution from stakeholders. Maybe that's getting pushed to the right, but could you describe your thinking on that project? Your participation in it? And how it fits into your portfolio given that obviously we're trying to skew toward shorter cycle projects at the moment? Ryan M. Lance - Chairman & Chief Executive Officer: Yeah, I think we are making some progress on that with the partners in alliance with the state. There's still a lot of work to do to get an aligned view around the fiscals and state's participation, and what that's going to look like. So there's a lot of work to go do even before we take that next step that you described into pre-FEED. I think the companies are looking at the kind of end of this year, into 2016 to make that decision. But a lot of that is dependent on kind of how we see the alignment working with the State of Alaska and their participation in the project. It's a very, very long project. No resource risk for us. So it kind of goes back to Matt's comment as how much of this long, longer cycle time, but very flat production with very low resource risk do you want in the portfolio. And we're going through those thoughts and analysis right now. It doesn't mean that there's zero of that in the portfolio. I think a healthy portfolio has some of that. We've got some LNG properties, we've got our Qatar property, we've got APLNG coming online. We have a large resource potential in the oil sands, we're trying to figure out how to break those projects into shorter cycle time projects. But still are long dated resources barrels that are attractive and should be a part of the portfolio. So that's going to be the challenge for us as we think about AKLNG going forward.

Okay. Great. All right. That's all I had. Thanks, guys. Ryan M. Lance - Chairman & Chief Executive Officer: Thanks, James. Ellen R. DeSanctis - VP-Investor Relations & Communications: Thanks, James.

Thank you. I will now turn the call back over to Ellen DeSanctis, VP-Investor Relations and Communications, ConocoPhillips. Ellen R. DeSanctis - VP-Investor Relations & Communications: Thanks, Christine, and thanks to all our participants. Obviously feel free to call us back for any follow-up questions. We really appreciate your time and interest. Thank you.

Thank you. And thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.