Shares of ConocoPhillips (NYSE: COP) have gotten off to a hot start in 2026. The U.S. oil and gas giant has gained more than 20%, pushing its share price above $110. The main factor fueling that rise is the rally in crude oil prices.
The oil stock could have plenty of fuel to continue rallying. Here’s a look at whether $200 a share is within its reach.
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ConocoPhillips has one of the lowest-cost resource bases in the oil and gas industry. That enables it to generate lots of cash in the current environment. Last year, Brent crude, the global benchmark price, averaged $69.09 per barrel. That price point enabled ConocoPhillips to produce $19.9 billion in cash flow from operations and $7.3 billion in free cash flow after capital expenditures. This robust free cash flow enabled the company to return $9 billion to investors via dividends ($4 billion) and share repurchases ($5 billion).
The company expects to generate an incremental $1 billion in free cash flow this year, fueled entirely by cost savings. Meanwhile, it anticipates producing another $1 billion of additional free cash flow in 2027 and 2028, driven by the completion of three major liquefied natural gas investments. On top of that, it expects to hit a significant inflection point in 2029, when its Willow oil project in Alaska starts up, adding another $4 billion to its annual free cash flow. All this assumes Brent oil averages around $70 a barrel (Brent was in the low-$70s before the U.S. and Israel attacked Iran).
That has the company on track to nearly double its annual free cash flow by 2029, even if crude prices fall a bit.
While ConocoPhillips doesn’t need higher oil prices to fuel a meaningful increase in free cash flow, it could produce an even bigger free cash flow gusher in the coming years if oil prices rise. That’s…
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