Exhibit 99
ConocoPhillips Fourth-Quarter 2006 Interim Update
HOUSTON--(BUSINESS WIRE)--Jan. 4, 2007--This update is intended to
give an overview of market and operating conditions experienced by
ConocoPhillips during the fourth quarter of 2006. The market
indicators and company estimates may differ considerably from the
company's actual results scheduled to be reported on January 24, 2007.
Highlights - Fourth-Quarter 2006 vs. Third-Quarter 2006
- -- Exploration and Production
-- Lower crude oil prices.
-- U.S. natural gas prices similar to third quarter.
-- Worldwide production similar to third quarter.
-- Impact of asset impairment and higher exploration expenses.
- -- Refining and Marketing
-- Significantly lower worldwide refining and marketing margins.
-- Worldwide refining capacity utilization rate in the
mid-90-percent range.
-- Higher turnaround costs.
-- Impact of held-for-sale impairment on domestic marketing
assets.
- -- LUKOIL Investment
-- Ownership of 20 percent at year end.
- -- Midstream and Chemicals
-- Midstream and Chemicals results expected to be lower than the
previous quarter.
- -- Corporate and Other
-- Debt balance of approximately $27.1 billion.
-- Capital program spending expected to be approximately $16.5
billion for 2006.
Exploration and Production (E&P)
The table below provides market price indicators for crude oil and
natural gas. The company's actual crude oil and natural gas price
realizations may vary from these market indicators due to quality and
location differentials, as well as the effect of pricing lags.
Market Indicators
4Q 2006 3Q 2006 4Q 2006 vs. 4Q 2005
3Q 2006
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Dated Brent ($/bbl) $59.68 $69.49 $(9.81) $56.90
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WTI ($/bbl) 59.94 70.38 (10.44) 59.99
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ANS USWC ($/bbl) 55.51 68.95 (13.44) 57.87
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Henry Hub first of
month ($/mmbtu) 6.56 6.58 (0.02) 13.00
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Source: Platts
Fourth-quarter production on a barrel-of-oil equivalent (BOE) per
day basis, including Syncrude and excluding LUKOIL, is anticipated to
be similar to the previous quarter. Increased production from Alaska
and the United Kingdom is expected to be offset by lower production
from the Timor Sea, U.S. Lower 48 and Libya. In Alaska, increased
production from the resumption of operations at Prudhoe Bay was
partially offset by weather-related transportation delays. Production
from the Timor Sea was negatively affected by production sharing
contract impacts.
In recent years, ConocoPhillips has been investing in gas
exploration and development opportunities in the Canadian Rockies
Foothills area. As a result of a combination of declining well
performance and drilling results, the company expects to record a
fourth-quarter impairment of approximately $90 million after-tax.
Exploration expenses are expected to be approximately $350 million
before-tax for the quarter.
Refining and Marketing (R&M)
The table below provides market indicators for regions where the
company has significant refining operations. The Weighted U.S. 3:2:1
margin is based on the geographical location and capacity of
ConocoPhillips' U.S. refineries. Realized refining margins may differ
due to the company's specific locations, configurations, crude oil
slates or operating conditions. The company's refining configuration
generally yields somewhat higher distillate volumes and lower gasoline
volumes than those implied by the market indicators shown below. In
addition, marketing margins may differ significantly from the U.S.
wholesale gasoline marketing indicator due to the product mix,
distribution channel and location of the company's refined product
sales.
Market Indicators ($/bbl)
4Q 2006 3Q 2006 4Q 2006 vs. 4Q 2005
3Q 2006
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Refining Margins
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East Coast WTI 3:2:1 $7.86 $10.54 $(2.68) $9.32
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Gulf Coast WTI 3:2:1 6.77 11.00 (4.23) 10.27
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Mid-Continent WTI
3:2:1 10.11 17.75 (7.64) 11.93
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West Coast ANS 3:2:1 20.36 21.70 (1.34) 16.29
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Weighted U.S. 3:2:1 10.49 14.86 (4.37) 11.69
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NW Europe Dated
Brent 3:1:2 11.46 14.18 (2.72) 13.68
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WTI/Maya Differential
(trading month) 13.04 14.87 (1.83) 16.75
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U.S. Wholesale Gasoline
Marketing 1.81 5.75 (3.94) 2.63
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Source: Platts, Lundberg Survey and OPIS
Worldwide refining and marketing margins for the fourth quarter
are expected to be significantly lower than the third quarter, as
indicated in the table above. The company's average crude oil refining
capacity utilization rate for the fourth quarter is expected to be in
the mid-90-percent range. Fourth-quarter turnaround costs are expected
to be approximately $95 million before-tax.
As previously announced, R&M expects to record an impairment of
approximately $200 million after-tax in the fourth quarter related to
domestic marketing assets held for sale.
Corporate and Other
The company expects fourth-quarter corporate expenses to be lower
than previously communicated guidance primarily due to favorable
foreign currency impacts.
The company's debt balance is expected to be approximately $27.1
billion at the end of the year. The number of weighted-average diluted
shares outstanding during the fourth quarter is expected to be
approximately 1,673 million. The company anticipates spending for the
2006 capital program to be approximately $16.5 billion.
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 Section 27A of the Securities Act of 1933, as amended and Section
21E of the Securities Exchange Act of 1934, as amended, which are
intended to be covered by the safe harbors created thereby.
Forward-looking statements relate to future events and anticipated
results of operations, business strategies, and other aspects of our
operations or operating results. In many cases you can identify
forward-looking statements by terminology such as "anticipate,"
"estimate," "believe," "continue," "could," "intend," "may," "plan,"
"potential," "predict," "should," "will," "expect," "objective,"
"projection," "forecast," "goal," "guidance," "outlook," "effort,"
"target" and other similar words. However, the absence of these words
does not mean that the statements are not forward-looking. The
statements in this update are based on activity from operations for
the first two months of the fourth quarter of 2006 and include
estimated results for December 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 fourth quarter of 2006 on January 24, 2007,
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 including,
but not limited to, crude oil and natural gas prices; refining and
marketing margins; potential failure to achieve, and potential delays
in achieving expected reserves or production levels from existing and
future oil and gas development projects due to operating hazards,
drilling risks, and the inherent uncertainties in interpreting
engineering data relating to underground accumulations of oil and gas;
unsuccessful exploratory drilling activities; lack of exploration
success; potential disruption or unexpected technical difficulties in
developing new products and manufacturing processes; potential failure
of new products to achieve acceptance in the market; unexpected cost
increases or technical difficulties in constructing or modifying
company manufacturing or refining facilities; unexpected difficulties
in manufacturing, transporting or refining synthetic crude oil;
international monetary conditions and exchange controls; potential
liability for remedial actions under existing or future environmental
regulations; potential liability resulting from pending or future
litigation; general domestic and international economic and political
conditions, as well as changes in tax and other laws applicable to our
business. Other factors that could cause actual results to differ
materially from those described in the forward-looking statements
include other economic, business, competitive and/or regulatory
factors affecting our business generally as set forth in our filings
with the Securities and Exchange Commission (SEC). 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.
Cautionary Note to U.S. Investors -- The SEC permits oil and gas
companies, in their filings with the SEC, to disclose only proved
reserves that a company has demonstrated by actual production or
conclusive formation tests to be economically and legally producible
under existing economic and operating conditions. Production is
distinguished from oil and gas production because SEC regulations
define Syncrude as mining-related and not part of conventional oil and
natural gas reserves. The company uses certain terms in this release,
such as "includes Syncrude," that the SEC's guidelines strictly
prohibit us from including in filings with the SEC. U.S. investors are
urged to consider closely the disclosure in the company's periodic
filings with the SEC, available from the company at 600 North Dairy
Ashford Road, Houston, Texas 77079 and the company's Web site at
www.conocophillips.com/investor/sec. This information also can be
obtained from the SEC by calling 1-800-SEC-0330.
CONTACT: ConocoPhillips