Exhibit 99
ConocoPhillips Second-Quarter 2005 Interim Update
HOUSTON--(BUSINESS WIRE)--July 1, 2005--This update is intended to
give an overview of market and operating conditions experienced by
ConocoPhillips (NYSE:COP) during the second quarter of 2005. The
market indicators and company estimates may differ considerably from
the company's actual results to be reported on July 27, 2005.
Highlights - Second-Quarter 2005 vs. First-Quarter 2005
-- Exploration and Production
-- Higher crude oil prices.
-- Higher U.S. natural gas prices.
-- Lower worldwide production, as anticipated.
-- Refining and Marketing
-- Higher worldwide refining margins.
-- Higher worldwide marketing margins.
-- Improved capacity utilization rate.
-- Turnaround costs similar to prior quarter levels.
-- LUKOIL Investment
-- Ownership of 12.6 percent at quarter end.
-- Midstream / Chemicals
-- Lower Midstream results.
-- Lower Chemicals results.
-- Corporate
-- Debt-to-capital ratio of 23 percent.
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
2Q 2005 1Q 2005 2Q vs. 1Q 2Q 2004
2005
------- ------- ---------- -------
Dated Brent ($/bbl) $51.59 47.50 4.09 35.36
WTI ($/bbl) 53.03 49.70 3.33 38.31
ANS USWC ($/bbl) 50.04 44.86 5.18 37.02
Henry Hub first of month ($/mcf) 6.74 6.27 0.47 6.00
Source: Platts
As anticipated, second-quarter production on a
barrel-of-oil-equivalent basis, including Syncrude, is expected to be
approximately 4 percent below that of the previous quarter. Increased
output in Canada and Venezuela is expected to be more than offset by
the impact of scheduled maintenance at the Bayu-Undan field and in the
North Sea, unscheduled downtime in Alaska, and normal seasonal
fluctuation. Full-year production, including Syncrude, is expected to
be approximately 3 percent higher than the amount produced in 2004.
This excludes the impact of our equity investment in LUKOIL.
Second-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
($/bbl) 2Q 2005 1Q 2005 2Q vs. 1Q 2Q 2004
2005
- ------- ------- ------- --------- -------
Refining Margins
East Coast WTI 3:2:1 $8.80 6.40 2.40 9.14
Gulf Coast WTI 3:2:1 9.63 6.37 3.26 9.17
Mid-Continent WTI 3:2:1 11.51 7.92 3.59 11.65
West Coast ANS 3:2:1 22.20 19.61 2.59 24.13
Weighted U.S. 3:2:1 12.31 9.24 3.07 12.60
NW Europe Dated Brent 3:1:2 15.09 11.14 3.95 10.43
WTI/Maya differential (trading month) 13.04 17.08 (4.04) 8.71
U.S. Wholesale Gasoline Marketing 2.20 0.16 2.04 1.83
Source: Platts
Refining margins for the second quarter are expected to be higher
than those of the first quarter, as indicated in the table above.
Although the WTI/Maya differential narrowed, refining margins continue
to benefit from light-heavy differentials. High crude costs continue
to negatively affect the Refining and Marketing segment due to
fixed-price products that do not necessarily move with the price of
crude. Worldwide marketing margins are expected to improve
significantly over those of the first quarter.
The company's average crude oil refining capacity utilization rate
for the second quarter is expected to exceed 95 percent.
Second-quarter turnaround costs are expected to be approximately $110
million before-tax.
Midstream / Chemicals
The Midstream segment results are expected to be lower in the
second quarter due to the first-quarter net impact to ConocoPhillips
associated with the restructuring of its ownership in Duke Energy
Field Services, LLC (DEFS). At the end of the second quarter,
ConocoPhillips' interest in DEFS remained at 30.3 percent. Additional
transfers related to the restructuring are expected to occur early in
the third quarter of 2005, subject to normal regulatory approvals.
The Chemicals segment results are expected to be lower primarily
due to lower margins from olefins and polyolefins, as well as lower
margins and volumes from aromatics and styrenics.
Corporate
The company expects its debt-to-capital ratio to be approximately
23 percent. In addition, the average diluted shares outstanding during
the second quarter are expected to be 1,419 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; weighted U.S. refining margins; marketing
margins; refinery utilization rates; turnaround costs; debt-to-capital
ratio; and average diluted shares outstanding. These statements are
based on activity from operations for the first two months of the
second quarter of 2005 and include estimated results for June, 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 second quarter of
2005 on July 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, Houston