Exhibit 99
ConocoPhillips First Quarter 2005 Interim Update
HOUSTON--(BUSINESS WIRE)--April 5, 2005--This update is intended to give an
overview of market and operating conditions experienced by ConocoPhillips
(NYSE:COP) during the first quarter of 2005. The market indicators and company
estimates may differ considerably from the company's actual results to be
reported on April 27, 2005.
Highlights - First Quarter 2005 vs. Fourth Quarter 2004
-- Exploration and Production
-- Higher crude oil prices.
-- Lower U.S. natural gas prices.
-- Daily production close to prior quarter levels.
-- Refining and Marketing
-- Higher U.S. refining margins.
-- Lower international refining margins.
-- Significantly lower worldwide marketing margins.
-- Capacity utilization rate in the low 90-percent range.
-- Increased turnaround activity and costs.
-- LUKOIL Investment
-- Ownership of 11.3 percent at quarter end.
-- Midstream/Chemicals
-- Lower Midstream natural gas liquids prices.
-- Restructure of DEFS.
-- Higher Chemicals results.
-- Corporate
-- Debt balance of $14.0 billion.
Exploration and Production
The table below provides market price indicators for crude oil and natural
gas. The company's actual crude oil and natural gas price realizations may vary
from these market indicators due to quality and location differentials, as well
as the effect of pricing lags.
Market Indicators
1Q 2005 4Q 2004 1Q 2005 vs. 1Q 2004
4Q 2004
- ----------------------------------------------------------------------
Dated Brent ($/bbl) $47.50 44.00 3.50 31.95
- ----------------------------------------------------------------------
WTI ($/bbl) 49.70 48.29 1.41 35.23
- ----------------------------------------------------------------------
ANS USWC ($/bbl) 44.86 42.61 2.25 34.14
- ----------------------------------------------------------------------
Henry Hub first of month
($/mcf) 6.27 7.07 (0.80) 5.69
- ----------------------------------------------------------------------
Source: Platts
First-quarter production on a barrel-of-oil equivalent basis, including
Syncrude, is expected to be close to that of the previous quarter. Greater
output in Venezuela and China is expected to be offset by the impact of
unscheduled maintenance in Canada, and reduced volumes in the United Kingdom and
Norway. Full-year production, including Syncrude, is now expected to be
approximately 3 percent higher than the amount produced in 2004, primarily due
to unscheduled downtime and maintenance at Prudhoe Bay and elsewhere in Alaska.
This excludes the impact of our equity investment in LUKOIL. First-quarter
exploration expenses are expected to be lower than those of the prior quarter.
Refining and Marketing
The table below provides market indicators for regions where the company
has significant refining operations. The Weighted U.S. 3:2:1 margin is based on
the geographical location and capacity of ConocoPhillips' U.S. refineries.
Realized refining margins may differ due to the company's specific locations,
configurations, crude oil slates or operating conditions. In addition, the
company's refining configuration generally yields somewhat higher distillate
volumes and lower gasoline volumes than those implied by the market indicators
shown below.
Market Indicators
1Q 2005 4Q 2004 1Q 2005 vs. 1Q 2004
4Q 2004
- ----------------------------------------------------------------------
Refining Margins ($/bbl)
- ----------------------------------------------------------------------
East Coast WTI 3:2:1 $6.40 5.73 0.67 6.87
- ----------------------------------------------------------------------
Gulf Coast WTI 3:2:1 6.37 4.09 2.28 6.36
- ----------------------------------------------------------------------
Mid-Continent WTI 3:2:1 7.92 5.52 2.40 6.91
- ----------------------------------------------------------------------
West Coast ANS 3:2:1 19.61 17.25 2.36 16.10
- ----------------------------------------------------------------------
Weighted U.S. 3:2:1 9.24 7.24 2.00 8.39
- ----------------------------------------------------------------------
NW Europe Dated Brent 3:1:2 11.14 15.24 (4.10) 7.78
- ----------------------------------------------------------------------
WTI/Maya differential (trading
month) 17.08 15.99 1.09 9.36
- ----------------------------------------------------------------------
U.S. Wholesale Gasoline
Marketing 0.04 1.97 (1.93) 0.69
- ----------------------------------------------------------------------
Source: Platts
U.S. refining margins for the first quarter are expected to be higher than
those of the fourth quarter, while international refining margins are expected
to be lower, as indicated in the table above. Refining margins should continue
to benefit from increased heavy-light differentials; however, high crude costs
continue to negatively impact segment earnings due to fixed price products that
do not necessarily move with the price of crude. These net refining margin
improvements are expected to be offset by significantly lower worldwide
marketing margins and increased turnaround activity. This increased turnaround
activity is expected to reduce processed input and clean product yields.
The company's average crude oil refining capacity utilization rate for the
first quarter is expected to be in the low 90-percent range, down from the prior
quarter. First quarter turnaround costs are expected to be approximately $120
million before-tax.
Midstream/Chemicals
In connection with the previously announced restructuring of
ConocoPhillips' ownership in Duke Energy Field Services (DEFS), the company
expects to recognize net after-tax benefits of approximately $290 million,
mainly resulting from DEFS' sale of TEPPCO Partners, L.P. As of the end of the
first quarter, ConocoPhillips' interest in DEFS remained at 30.3 percent.
Additional transfers related to the restructuring are expected to occur in the
second quarter of 2005, subject to regulatory approvals.
The Chemicals segment results are expected to be higher due to improved
olefins and polyolefins margins.
Corporate
The company's expected debt balance at the end of the first quarter is
$14.0 billion. In addition, the average diluted shares outstanding during the
first quarter are expected to be 711 million shares.
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This update contains forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. The forward-looking statements are about ConocoPhillips' main business
segments: exploration and production, refining and marketing, midstream and
chemicals. There are also forward-looking statements about ConocoPhillips'
expected crude oil, natural gas and natural gas liquids production and prices;
expected exploration expenses; the impacts the company's share of asset sales;
weighted U.S. refining margins; marketing margins; refinery utilization rates;
turnaround costs; balance sheet debt level; and average diluted shares
outstanding. These statements are based on activity from operations for the
first two months of the first quarter of 2005 and include estimated results for
March, and as such are preliminary and are estimates. All of the forward-looking
data is therefore subject to change. Actual results, which will be reported in
the company's earnings release for the first quarter of 2005 on April 27, 2005,
may differ materially from the estimates given in this update.
Where in any forward-looking statement, the company expresses an
expectation or belief as to future results, such expectation or belief is
expressed in good faith and believed to have a reasonable basis. However, there
can be no assurance that such expectation or belief will result or be achieved.
The actual results of operations can and will be affected by a variety of risks
and other matters that could cause the stated expectation or belief to differ
materially from that stated in this update.
CONTACT: ConocoPhillips