ConocoPhillips' CEO Ryan Lance. Source: ConocoPhillips.

ConocoPhillips (NYSE:COP) recently reported better-than-expected second-quarter results. Driving this result was the company's solid production and substantial cost reductions. That said, while its quarterly results were strong, CEO Ryan Lance wanted investors to know that its underlying business was even stronger. That was one of the key messages he had for shareholders on the company's second-quarter conference call.

1. The dividend is safe
Lance led off his prepared comments by pounding the table, so to speak, on the security of the company's quarterly dividend. He did so by proclaiming, "The dividend is safe. Let me repeat that. The dividend is safe."

Later on in the call he went into a bit more detail on why the payout not only remains safe but why the company was actually increasing it during the current environment. He said:

The increase was very modest, representing about $25 million impact in 2015. While every dollar matters, we believe this was an important message for our shareholders.

So far this year the company has paid out $1.8 billion in dividends to investors, which is a pretty tidy sum. However, the company wanted to pay out just a little bit more going forward to send the message to its investors and the market that the dividend remains the company's top priority. That's a very bold statement given how many energy-related dividends have been either cut or eliminated over the past year.

2. We're on pace to be cash flow neutral by 2017
One of the reasons there had been some concern surrounding the dividend is due to the fact that the company isn't yet cash-flow neutral. That said, the company reiterated its plan to be cash-flow neutral by 2017. In fact, Lance said that the company has "increasing flexibility and can achieve cash flow neutrality in 2017 and beyond at today's strip price, roughly $60 per barrel Brent." Said another way, the company is standing by its goal to be cash-flow neutral in 2017 at a $60 oil price, but it has flexibility to still meet that goal even if oil is lower as it can further trim its capital expenditures budget if necessary.

3. Focused on maintaining a strong balance sheet
Despite the fact that ConocoPhillips does plan to outspend cash flow for the next two years, it isn't doing so at the risk of weakening its balance sheet. Lance said:

[We're] focused on maintaining our balance sheet strength. We have additional capacity and ample access to liquidity. And as we've continuously said, we expect a company of our size would generate about $1 billion of asset sales annually from pruning the portfolio. That's an additional source of cash and good business.

As he points out, one way the company plans to match its cash outflow with inflows is to sell assets. Currently, the company has several noncore assets up for sale that will bolster its balance sheet as it works toward actual cash-flow neutrality in 2017. 

4. We can handle lower oil for longer
One of the buzz phrases in the industry over the past few months is the general idea that oil prices will now stay lower for longer. Lance made it clear on the call that it can handle that scenario with ease:

We know what's on everybody's mind. What if prices stay lower for longer? We believe we can achieve cash flow neutrality in 2017 and beyond through exercising capital flexibility even at $60 barrel Brent. We can exercise additional capital flexibility from various sources: deflation capture, efficiency improvements, discretion in development programs, uncommitted major projects, deepwater reductions and additional program efficiencies. And we believe we can achieve our 2017 production target giving the ramp from our major projects between now and then, the majority of which is from capital we've already invested. And this is all before tactical asset sales.

Said another way, ConocoPhillips has a lot of levers to pull in order to meet its target to grow production by 2%-3% per year through 2017 even if oil prices don't recover. Lance pointed out that the company can cut more spending, capture more efficiencies, and even sell more assets if it needs to in order to maintain its current plan. Bottom line, the company is well prepared to handle an oil price scenario of lower for longer.

Source: ConocoPhillips.

5. We're positioned to win in the long term
The overarching theme of ConocoPhillips' second-quarter conference call is the fact that the company is not only built to endure the downturn but it is built for long-term success. Lance hammered this point home:

Clearly the environment today is challenging for the industry. But we believe we're entering a new reality for the business. The winners will be those companies with a rational vision, high-quality asset base, and a strong workforce and a commitment to shareholders. The winners will be those companies who can manage short-, medium-, and long-term goals simultaneously and we're setting plans and delivering on the things we can control in the short-term, paying close attention to the drivers of medium- and long-term performance. We believe this broad perspective will serve us well and make us an even stronger company in the future.

The company is focused not only on the short-term market weakness but on delivering long-term growth no matter what commodity prices do in the interim. By focusing on the entire cycle, Lance believes his team is building a company that will deliver even stronger future performance for investors.

Investor takeaway
ConocoPhillips made several things abundantly clear on its second-quarter conference call. Not only is the dividend not going away, it will continue to rise. Further, this is a company that can handle lower oil for longer as it has an increasing amount of flexibility. As a result, its CEO wants investors to know that ConocoPhillips is positioned to win over the long term. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.