Exhibit 99
ConocoPhillips Fourth-Quarter 2007 Interim Update
HOUSTON--(BUSINESS WIRE)--Jan. 3, 2008--This update is intended to
give an overview of market and operating conditions experienced by
ConocoPhillips (NYSE:COP) during the fourth quarter of 2007. The
market indicators and company estimates may differ considerably from
the company's actual results scheduled to be reported on January 23,
2008.
Highlights - Fourth-Quarter 2007 vs. Third-Quarter 2007
- -- Exploration and Production
-- Higher crude oil prices.
-- Higher U.S. natural gas prices.
-- Higher worldwide production, as previously communicated.
-- Enactment of retroactive Alaska production tax increase.
- -- Refining and Marketing
-- Lower domestic refining and marketing margins.
-- Improved market capture, partially due to planned inventory
reductions.
-- Improved worldwide refining capacity utilization rate.
- -- Midstream and Chemicals
-- Midstream results expected to be higher than the previous
quarter.
-- Chemicals results anticipated to be similar to the previous
quarter due to a one-time tax benefit.
- -- Corporate and Other
-- Corporate expenses expected to be similar to the previous
quarter.
-- Debt balance of approximately $21.7 billion.
-- Share repurchases of approximately $2.5 billion.
Exploration and Production (E&P)
The table below provides market price indicators for crude oil and
natural gas. The company's actual crude oil and natural gas price
realizations may vary from these market indicators due to quality and
location differentials, as well as the effect of pricing lags.
Market Indicators
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4Q 2007 3Q 2007 4Q 2007 vs. 4Q 2006
3Q 2007
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Dated Brent ($/bbl) $88.69 $74.87 $13.82 $59.68
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WTI ($/bbl) 90.66 75.48 15.18 59.94
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ANS USWC ($/bbl) 88.76 76.49 12.27 55.51
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Henry Hub first of month
($/mmbtu) 6.97 6.16 0.81 6.56
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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 approximately 60,000 BOE per day higher than the previous quarter.
Exploration expenses are expected to be approximately $250 million
before-tax for the quarter.
During the fourth quarter, the state of Alaska enacted new
production tax legislation that is anticipated to have a negative
after-tax impact of approximately $250 million, of which approximately
$100 million is retroactive to prior periods in 2006 and 2007.
Fourth-quarter results are expected to be positively impacted by
approximately $350 million due to a tax-rate reduction recently
enacted in Canada and the release of escrowed funds in connection with
the extinguishment of the Hamaca project financing indebtedness.
Refining and Marketing (R&M)
The table below provides market indicators for regions where the
company has significant refining operations. The Weighted U.S. 3:2:1
margin is based on the geographical location and capacity of
ConocoPhillips' U.S. refineries. Realized refining margins may differ
due to the company's specific locations, configurations, crude oil
slates or operating conditions. The company's refining configuration
generally yields somewhat higher distillate volumes and lower gasoline
volumes than those implied by the market indicators shown below. In
addition, marketing margins may differ significantly from the U.S.
wholesale gasoline marketing indicator due to the product mix,
distribution channel and location of the company's refined product
sales.
Market Indicators ($/bbl)
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4Q 2007 3Q 2007 4Q 2007 vs. 4Q 2006
3Q 2007
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Refining Margins
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East Coast WTI 3:2:1 $ 8.47 $11.73 $ (3.26) $ 7.86
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Gulf Coast WTI 3:2:1 6.55 11.74 (5.19) 6.77
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Mid-Continent WTI 3:2:1 9.37 20.92 (11.55) 10.11
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West Coast ANS 3:2:1 16.58 16.22 0.36 20.36
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Weighted U.S. 3:2:1 9.65 14.74 (5.09) 10.49
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NW Europe Dated Brent
3:1:2 15.55 13.37 2.18 11.46
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WTI/Maya Differential
(trading month) 15.00 12.41 2.59 13.04
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WTI/Brent Differential
(trading month) 1.97 0.61 1.36 0.26
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U.S. Wholesale Gasoline
Marketing (0.43) 0.66 (1.09) 1.81
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Source: Platts, Lundberg Survey and OPIS
Domestic refining and marketing margins for the fourth quarter are
anticipated to be lower than the third quarter, as indicated in the
table above. Overall, the company's average worldwide crude oil
refining capacity utilization rate for the fourth quarter is expected
to improve to the mid-90-percent range. Domestically, the utilization
rate is anticipated to be slightly lower than the third quarter.
Internationally, the return to full-quarter production at the
company's Wilhelmshaven, Germany, refinery is expected to have a
positive impact on the utilization rate for the fourth quarter, but a
negative impact on international market capture due to the relatively
lower margins associated with hydro-skimming volumes. Market capture
is expected to be further impacted by planned and unplanned downtime
at the Humber refinery in North Lincolnshire, United Kingdom.
Worldwide, realized market capture is anticipated to improve,
partially due to planned inventory reductions. Fourth-quarter
turnaround costs are expected to be approximately $80 million
before-tax.
Corporate and Other
ConocoPhillips' debt balance is expected to be approximately $21.7
billion at the end of the fourth quarter. The company anticipates
fourth-quarter repurchases under the share repurchase program to be
approximately $2.5 billion, for a total of approximately $7 billion
for the year. The number of weighted-average diluted shares
outstanding during the fourth quarter is expected to be approximately
1,612 million.
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 2007 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 2007 on January 23, 2008,
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.
CONTACT: ConocoPhillips
KEYWORD: TEXAS
INDUSTRY KEYWORD: OIL/GAS ENERGY
SOURCE: ConocoPhillips