Exhibit 99
ConocoPhillips Third-Quarter 2005 Interim Update
HOUSTON--(BUSINESS WIRE)--Oct. 3, 2005--This update is intended to
give an overview of market and operating conditions experienced by
ConocoPhillips (NYSE:COP) during the third quarter of 2005. The market
indicators and company estimates may differ considerably from the
company's actual results scheduled to be reported on October 26, 2005.
Highlights - Third-Quarter 2005 vs. Second-Quarter 2005
-- Impact of Hurricanes Katrina, Rita and Dennis
-- Approximately 20,000 barrels of oil equivalent production
per day downtime for the quarter.
-- Partner-operated Ursa field remains shut-in due to
Hurricane Katrina.
-- Company-operated Green Canyon platforms sustained damage
during Hurricane Rita and remain shut-in, with minimal
production impact for the quarter.
-- Company-operated Magnolia sustained minimal damage and
production is expected to resume shortly, contingent upon
resumption of operations at non-operated related
infrastructure, such as pipelines and utilities.
-- Alliance refinery expected to begin partial operation in
December and return to full operation in early 2006.
-- Sweeny refinery returned to normal operations.
-- Lake Charles refinery sustained minimal damage, and
startup expected in mid-October.
-- Initial estimate of the company's share of mutual
insurance premium charges, affecting the third quarter,
due to Hurricane Katrina is $30 million, after-tax. Total
impact of hurricane-related charges still being evaluated.
-- Exploration and Production
-- Higher crude oil prices.
-- Higher natural gas prices.
-- Daily production slightly less than prior quarter level,
including hurricane impacts.
-- Refining and Marketing
-- Higher worldwide refining margins.
-- Significantly lower U.S. and international marketing
margins.
-- Lower capacity utilization rate in the mid 90-percent
range, including hurricane impacts.
-- Decreased turnaround activity and costs.
-- LUKOIL Investment
-- Ownership of 14.8 percent at quarter end.
-- Midstream / Chemicals
-- Midstream results expected to be similar to previous
quarter.
-- Chemicals results anticipated to be lower than previous
quarter.
-- Corporate
-- Debt balance of approximately $13.5 billion.
Exploration and Production (E&P)
The table below provides market price indicators for crude oil and
natural gas. The company's actual crude oil and natural gas price
realizations may vary from these market indicators due to quality and
location differentials, as well as to the effect of pricing lags.
Market Indicators
3Q 2005 2Q 2005 3Q vs. 2Q 3Q 2004
2005
- ----------------------------------------------------------------------
Dated Brent ($/bbl) $61.54 51.59 9.95 41.54
- ----------------------------------------------------------------------
WTI ($/bbl) 63.05 53.03 10.02 43.86
- ----------------------------------------------------------------------
ANS USWC ($/bbl) 60.79 50.04 10.75 41.80
- ----------------------------------------------------------------------
Henry Hub first of month ($/mcf) 8.53 6.74 1.79 5.75
- ----------------------------------------------------------------------
Source: Platts
In advance of the arrival of Hurricane Katrina, production was
shut-in from seven Gulf Coast fields in which ConocoPhillips has an
interest. Following the hurricane, six fields restarted production.
The partner-operated Ursa field remains shut-in, pending full
assessment and infrastructure coming back online.
Hurricane Rita production impacts are largely expected to be
short-term in nature. These production impacts primarily occurred in
the Gulf of Mexico fields and the onshore Louisiana and Texas fields
in which ConocoPhillips has an interest. The company-operated Magnolia
field sustained minimal damage and production is expected to resume
shortly, contingent upon resumption of operations at non-operated
related infrastructure, such as pipelines and utilities.
Third-quarter production on a barrel-of-oil-equivalent basis,
including Syncrude, is expected to be slightly lower than the previous
quarter. Hurricanes Katrina, Rita and Dennis, along with unplanned
downtime in Alaska and the United Kingdom, negatively impacted
production during the quarter. Impacts of production-sharing contracts
in Indonesia, driven by higher prices, continued to lower production
volumes. These impacts result in 2005 full-year production that is
expected to be similar to 2004, assuming timely start-up of Gulf Coast
production, shut down as a result of Hurricane Rita. This excludes the
impact of the company's equity investment in LUKOIL.
Third-quarter exploration expenses are expected to be higher than
the prior quarter, due to increased exploration activity.
Refining and Marketing (R&M)
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
3Q 2005 2Q 2005 3Q vs. 2Q 3Q 2004
2005
- ----------------------------------------------------------------------
Refining Margins ($/bbl)
- ----------------------------------------------------------------------
East Coast WTI 3:2:1 $14.81 8.80 6.01 7.00
- ----------------------------------------------------------------------
Gulf Coast WTI 3:2:1 17.42 9.63 7.79 6.33
- ----------------------------------------------------------------------
Mid-Continent WTI 3:2:1 17.06 11.51 5.55 8.09
- ----------------------------------------------------------------------
West Coast ANS 3:2:1 26.61 22.20 4.41 17.92
- ----------------------------------------------------------------------
Weighted U.S. 3:2:1 18.51 12.35 6.16 9.10
- ----------------------------------------------------------------------
NW Europe Dated Brent 3:1:2 16.53 15.09 1.44 11.76
- ----------------------------------------------------------------------
WTI/Maya differential (trading
month) 15.48 13.04 2.44 11.66
- ----------------------------------------------------------------------
U.S. Wholesale Gasoline
Marketing 0.42 2.20 (1.78) 1.50
- ----------------------------------------------------------------------
Source: Platts
As indicated in the table above, worldwide refining margins for
the third quarter are expected to be higher than the second quarter,
moderated somewhat by the company's refining configuration, which is
more heavily weighted toward distillates. R&M segment earnings are
expected to be negatively impacted by a significant reduction in
worldwide marketing margins. Realized U.S. wholesale marketing margins
were significantly lower than market indicators, and realized
international marketing margins are expected to be lower than the
previous quarter. In addition, lower co-products margins and higher
utility costs continue to negatively impact segment earnings.
Turnaround costs are expected to be approximately $54 million
before-tax.
The company's average crude oil refining capacity utilization rate
for the third quarter is expected to be lower, in the mid 90-percent
range, primarily as a result of the impact of Hurricanes Katrina and
Rita on the company's 715,000-barrel-per-day Gulf Coast refining
capacity.
ConocoPhillips' 247,000-barrel-per-day Alliance refinery located
in Belle Chasse, La., remains shut down as a result of damages
sustained during Hurricane Katrina. Initial access to the refinery was
limited due to flooding and infrastructure damage to the surrounding
areas. Removal of water from the site is complete, the area has been
secured, and repairs have begun. The refinery is expected to begin
partial operation in December and return to full operation in early
2006.
The Sweeny, Texas, and Lake Charles, La., refineries were shutdown
in anticipation of Hurricane Rita. Sweeny has returned to normal
operations. Pending power restoration, Lake Charles is anticipated to
resume operations in mid-October.
Corporate
The company's expected debt balance at the end of the third
quarter is approximately $13.5 billion. Compared with the previous
quarter, corporate expenses from continuing operations are expected to
be negatively impacted by approximately $80 million, after-tax, due to
premiums paid on the early retirement of debt, increased
benefit-related charges and negative foreign exchange impacts. The
average diluted shares outstanding during the third quarter is
expected to be 1,418 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 the impact of Hurricanes Katrina,
Rita and Dennis on ConocoPhillips' main business segments;
ConocoPhillips' expected crude oil, natural gas and natural gas
liquids production and prices; expected exploration expenses; weighted
worldwide refining margins; worldwide marketing margins; refinery
utilization rates; turnaround costs; balance sheet debt level;
corporate expenses from continuing operations; and average diluted
shares outstanding. These statements are based on activity from
operations for the first two months of the third-quarter of 2005 and
include estimated results for September, 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 third-quarter of 2005 on October
26, 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. 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.
CONTACT: ConocoPhillips, Houston