Exhibit 99.1
[LOGO - ConocoPhillips] [LOGO - BURLINGTON RESOURCES]
FOR IMMEDIATE RELEASE
CONOCOPHILLIPS TO ACQUIRE BURLINGTON RESOURCES IN $35.6 BILLION TRANSACTION
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BURLINGTON RESOURCES' GAS RESERVES AND PRODUCTION PROVIDE EXCELLENT STRATEGIC
FIT WITH CONOCOPHILLIPS' GLOBAL ENERGY PORTFOLIO
CONOCOPHILLIPS TO BECOME A LEADING NATURAL GAS PRODUCER IN NORTH AMERICA
Houston, Texas (December 12, 2005) - ConocoPhillips (NYSE: COP) and
Burlington Resources Inc. (NYSE: BR) announced today they have signed a
definitive agreement under which ConocoPhillips will acquire Burlington
Resources in a transaction valued at $35.6 billion. The transaction, upon
approval by Burlington Resources shareholders, will provide ConocoPhillips
with extensive, high quality natural gas exploration and production assets,
primarily located in North America. The Burlington Resources portfolio
provides a strong complement to ConocoPhillips' global portfolio of
integrated exploration, production, refining and energy transportation
operations, thereby positioning the combined company for future growth.
Under the terms of the agreement, Burlington Resources shareholders will
receive in the merger $46.50 in cash and 0.7214 shares of ConocoPhillips
common stock for each Burlington Resources share they own. This represents
a transaction value of $92 per share, based on the closing price of
ConocoPhillips shares on Friday, December 9, 2005, the last unaffected day
of trading prior to this announcement. The transaction preserves
ConocoPhillips' strong financial base, flexibility and cash flow, and
enables the company to continue its aggressive capital investment program,
including the funding of a substantial Exploration and Production and
Refining program.
Burlington Resources is one of the world's leading independent exploration
and production companies, and holds one of the industry's leading positions
in North American natural gas reserves and production. At December 31,
2004, Burlington Resources had total reserves of 2,001 MMBOE (million
barrels of oil equivalent). In addition, Burlington Resources has estimated
2005 production of approximately 475 MBOE/d (thousand barrels of oil
equivalent per day), and access to significant conventional and
unconventional resources.
Together, ConocoPhillips and Burlington Resources will have:
o Pro-forma reserves of 10.5 BBOE as of December 31, 2004, excluding 0.3
BBOE associated with ConocoPhillips' Syncrude operations, of which 52
percent is in North America; and
o Pro-forma 2005 production of 2.3 MMBOE/d, including LUKOIL and
Syncrude, of which 50 percent is in North America.
Jim Mulva, Chairman and Chief Executive Officer of ConocoPhillips, said:
"We are very pleased to have reached this agreement with Burlington
Resources, and are excited about the opportunities it provides our
respective companies and shareholders. With this transaction,
ConocoPhillips will expand our portfolio of high quality, low-risk,
longlived gas reserves, and become a leading producer of natural gas in
North America. The transaction also enhances ConocoPhillips production
growth and North American gas supply position both in the near-term,
through projects involving conventional and unconventional resources, and
in the long-term through LNG (liquefied natural gas) and Arctic gas
projects. In addition, the broader Burlington Resources portfolio is an
excellent complement to our integrated oil and gas portfolio, and
significantly increases our weighting in OECD (Organization for Economic
Co-operation and Development) country assets. The transaction will not only
provide Burlington Resources shareholders with a meaningful immediate
premium to the value of their shares, but also enables them to continue to
benefit as investors in the future growth of ConocoPhillips. We will
continue to invest in our growth for the benefit of our current and future
investors. Burlington Resources is an efficient, well-run exploration and
production organization, and we look forward to an exciting future of
growth together."
Bobby S. Shackouls, Chairman, President and Chief Executive Officer of
Burlington Resources, said, "The combination of ConocoPhillips and
Burlington Resources recognizes the substantial value we have created and
acknowledges the success of our employees in building a great company with
a strong asset base. Of equal importance, this transaction allows our
shareholders, customers and employees to participate in the future growth
of ConocoPhillips, a company that has the scale and scope to supply
consumers from every facet of the oil and gas industry more efficiently."
Based on the closing market prices for the shares of both companies
December 9, and their debt levels as of September 30, 2005, the combination
of ConocoPhillips and Burlington Resources would have an enterprise value
of $135 billion ($106 billion of equity; $29 billion of net debt and
preferred securities). Existing ConocoPhillips shareholders will own about
83 percent of ConocoPhillips following the transaction, and Burlington
Resources shareholders will own approximately 17 percent.
ConocoPhillips will fund its acquisition of Burlington Resources through
existing cash on hand, existing credit facilities, and new additional bank
and bond debt. The company plans to use cash from operations in the years
ahead to reduce its outstanding debt.
The transaction, based on 2006 First Call estimates, is expected to be
accretive to nearterm production growth and cash flow per share, and
slightly dilutive to ConocoPhillips near-term earnings per share.
ConocoPhillips expects to achieve synergies and pre-tax cost savings of
approximately $375 million annually after the operations of the two
companies are fully integrated. These savings will result largely from
reducing corporate expenses, optimizing the company's exploration
portfolio, and reducing operating expenses.
Upon completion of the merger, Mr. Shackouls and Steven J. Shapiro,
Executive Vice President, Finance and Corporate Development, will retire,
and Randy L. Limbacher, currently Burlington Resources Executive Vice
President and Chief Operating Officer, will become Executive Vice President
responsible for North and South America, reporting to Mr. Mulva. William B.
Berry, presently ConocoPhillips' Executive Vice President-Exploration and
Production, will become Executive Vice President responsible for Europe,
Asia, Africa and the Middle East, also reporting to Mr. Mulva. Mr.
Shackouls and William E. Wade, currently an independent director of
Burlington Resources, will join ConocoPhillips's Board of Directors. A
transition team has been formed and will be led by Mr. Limbacher of
Burlington Resources, and John E. Lowe, ConocoPhillips' Executive Vice
President-Planning, Strategy and Corporate Affairs.
The acquisition is conditioned upon, among other things, the approval of
Burlington Resources shareholders and customary regulatory approvals. The
transaction is expected to be completed in the first half of 2006.
Goldman, Sachs & Co. and Citigroup Global Markets Inc. acted as financial
advisors, and Wachtell, Lipton, Rosen & Katz acted as legal counsel to
ConocoPhillips. Morgan Stanley and J.P. Morgan Securities Inc. acted as
financial advisors, and Fried, Frank, Harris, Shriver & Jacobson LLP acted
as legal counsel to Burlington Resources.
ADDITIONAL INFORMATION
NOTE TO INVESTMENT COMMUNITY: There will be an investment community
presentation tomorrow, Tuesday, December 13 at 8:30 a.m. EST. A webcast of
the presentation with slides will be available in a listen-only mode to
individual investors, media and other interested parties on the Internet at
www.ConocoPhillips.com and www.br-inc.com.
NOTE TO NEWS MEDIA: There will be a telephonic Media Q&A at 10:30 am -11:00
a.m. EST. Those wishing to participate should dial 877-707-9631 (North
America) or 785-832-0201 (International) approximately 5 minutes before the
call.
Today's news release, along with other information about ConocoPhillips and
Burlington Resources, is also available on the Internet at
www.ConocoPhillips.com and www.br-inc.com.
ABOUT BURLINGTON RESOURCES
Burlington Resources ranks among the world's largest independent oil and
gas companies, and holds one of the industry's leading positions in North
American natural gas reserves and production. Headquartered in Houston,
Texas, the company conducts exploration, production and development
operations in the U.S., Canada, the United Kingdom, Africa, China and South
America. For additional information see the Burlington Resources Web site
at www.br-inc.com.
FORWARD-LOOKING STATEMENTS
This press release may contain projections and other forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act
of 1934, as amended. Any such projections or statements reflect the
company's current views with respect to future events and financial
performance. No assurances can be given, however, that these events will
occur or that such projections will be achieved and actual results could
differ materially from those projected. A discussion of important factors
that could cause actual results to differ materially from those projected
is included in the company's periodic reports filed with the Securities and
Exchange Commission.
ABOUT CONOCOPHILLIPS
ConocoPhillips is an integrated petroleum company with interests around the
world. For more information, go to www.conocophillips.com.
CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE
PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
Except for the historical and factual information contained herein, the
matters set forth in this press release, including statements as to the
expected benefits of the acquisition such as efficiencies, cost savings,
market profile and financial strength, and the competitive ability and
position of the combined company, and other statements identified by words
such as "estimates, "expects," "projects," "plans," and similar expressions
are forward-looking statements within the meaning of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to risks and uncertainties that may
cause actual results to differ materially, including required approvals by
Burlington Resources shareholders and regulatory agencies, the possibility
that the anticipated benefits from the acquisition cannot be fully
realized, the possibility that costs or difficulties related to the
integration of Burlington Resources operations into ConocoPhillips will be
greater than expected, the impact of competition and other risk factors
relating to our industry as detailed from time to time in each of
ConocoPhillips' and Burlington Resources' reports filed with the SEC. You
should not place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. Unless legally required,
ConocoPhillips
undertakes no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise.
ADDITIONAL INFORMATION
ConocoPhillips will file a Form S-4, Burlington Resources will file a proxy
statement and both companies will file other relevant documents concerning
the proposed merger transaction with the Securities and Exchange Commission
(SEC). INVESTORS ARE URGED TO READ THE FORM S-4 AND PROXY STATEMENT WHEN
THEY BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You will be able to obtain
the documents free of charge at the website maintained by the SEC at
www.sec.gov.
ConocoPhillips, Burlington Resources, and their respective directors and
executive officers, may be deemed to be participants in the solicitation of
proxies from Burlington Resources' stockholders in connection with the
merger. Information about the directors and executive officers of
ConocoPhillips and their ownership of ConocoPhillips stock will be set
forth in the proxy statement for ConocoPhillips' 2006 Annual Meeting of
Stockholders. Information about the directors and executive officers of
Burlington Resources and their ownership of Burlington Resources stock will
be set forth in the proxy statement for Burlington Resources' 2006 Annual
Meeting of Stockholders. Investors may obtain additional information
regarding the interests of such participants by reading the Form S-4 and
proxy statement for the merger when they become available.
Investors should read the Form S-4 and proxy statement carefully when they
become available before making any voting or investment decisions.
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Contacts:
For ConocoPhillips For Burlington Resources
Investors: Investors:
Gary Russell Lee Ahlstrom
212-207-1996 (713) 624-9548
Media:
Sam Falcona James Bartlett
281-293-5966 (713) 624-9354