ConocoPhillips' (COP) strong operations in fiscal Q2 should offset Middle East headwinds, with the company likely to reiterate production and equity affiliate distribution projections for the fiscal year, UBS Securities said in a Tuesday note.

ConocoPhillips is set to release its fiscal Q2 results on Aug. 6.

The company's N3 project in Qatar weighed on the fiscal quarter's output but outperformance by the rest of its portfolio kept production at midpoint level of its full-year guidance, the brokerage said. UBS also said it expects ConocoPhillips to add the extra Permian rig in H2 to sustain operational efficiencies through 2027.

Meanwhile, strong pricing at ConocoPhillips' APLNG and EGLNG should back the company's fiscal 2026 equity affiliate distributions guidance of $1.5 billion, the brokerage added.

UBS cut its price target on ConocoPhillips to $143 from $155, with a buy rating.

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