Key Points

Unlike competitors that target oil-rich zones such as the Permian Basin, ConocoPhillips commits substantial resources to Alaska's North Slope.
The firm's $9 billion Willow initiative remains three years from startup, yet it could generate $4 billion in extra yearly cash flow once production begins.
Paired with $3 billion in added annual cash flow from efficiency gains, the stock stands ready for gains in value and dividend increases.

Ignore the Permian Basin, Guyana, and similar oil-rich zones that major energy firms have pursued lately. Oil and gas leader ConocoPhillips turns its attention northward to Alaska's North Slope.

Alaska has hosted major oil exploration for decades, yet ConocoPhillips pursues no ordinary venture. The company positions this multibillion-dollar effort as central to its cash flow expansion plans.

If it succeeds, the Willow project could deliver billions in extra cash flow by 2029. Together with other initiatives, this profit jump could support ConocoPhillips as one of the most watched oil stocks.

Image source: Getty Images.

ConocoPhillips and its Willow project

Projected to cost as much as $9 billion, the Willow project ranks as the largest energy exploration effort on Alaska's North Slope in over two decades. Although the expense appears large, the potential rise in crude output looks notable. Forecasts point to peak output of 180,000 barrels daily and more than 600 million barrels of recoverable oil overall.

Though startup is not expected until early 2029, leaders see an immediate profit boost. Since last year, the firm has highlighted the project as the capstone of its push to lift yearly cash flow from 2025 through the end of the decade.

Investor updates note that ConocoPhillips is set to deliver an expected $7 billion in added free cash flow by 2029, with $1 billion each year from 2026 through 2028.

Put simply, the company plans to secure $3 billion in extra cash flow via routine cost cuts, while the Willow project supplies the remaining $4 billion.

Do shares belong in the buy zone?

ConocoPhillips posted $19.8 billion in operating cash flow for 2025, so an added $7 billion inside three years marks a strong gain. This rise should fuel further dividend growth and sustain or expand the buyback program.

If much of the cash flow reaches net income, it should push ConocoPhillips shares higher. At roughly 11 times forward earnings, a modest discount to peers such as ExxonMobil, investors appear not to have priced in much of the Willow upside.

One reason may exist. Forecasts assume crude oil stays above $70 per barrel. Energy markets remain volatile, and geopolitics plus global economic conditions could shift prices in either direction over four years.

Only time will reveal whether the Willow project succeeds, yet it offers a solid potential catalyst alongside other strengths. Beyond fair valuation, ConocoPhillips ranks among leading dividend payers in oil with a 2.9 percent forward yield and double-digit annual dividend growth over five years.

All factors considered, shares look attractive at present levels.

Should investors purchase ConocoPhillips shares now?

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Thomas Niel holds no positions in any stocks mentioned. The Motley Fool recommends ConocoPhillips. The Motley Fool maintains a disclosure policy.

The views and opinions expressed here belong to the author and do not necessarily reflect those of Nasdaq, Inc.