restructuring analyst presentation 7-14-11

7/31/2019 Restructuring Analyst Presentation 7-14-11

1/19

Creating

Two

Leading

EnergyCompanies

AnalystMeeting

July14,

2011


2/19

1

FORTHEPURPOSESOFTHESAFEHARBOR

PROVISIONS

OFTHE

PRIVATE

SECURITIES

LITIGATION

REFORM

ACT

OF

1995

CautionaryStatement

Thefollowingpresentationincludesforwardlookingstatements. Thesestatementsrelatetofutureevents,

such as anticipated revenues, earnings, business strategies, competitive position or other aspects of our

operationsor

operating

results.

Actual

outcomes

and

results

may

differ

materially

from

what

is

expressed

or

forecast insuch forwardlookingstatements.Thesestatementsarenotguaranteesof futureperformance

and involve certain risks, uncertainties and assumptions that are difficult to predict such as oil and gas

prices; refiningandmarketingmargins;operationalhazardsanddrilling risks;potential failure toachieve,

andpotentialdelaysinachievingexpectedreservesorproductionlevelsfromexistingandfutureoilandgas

developmentprojects;

unsuccessful

exploratory

activities;

unexpected

cost

increases

or

technical

difficulties

in constructing, maintaining or modifying company facilities; international monetary conditions and

exchangecontrols;potentialliabilityforremedialactionsunderexistingorfutureenvironmentalregulations

orfrompendingorfuturelitigation;limitedaccesstocapitalorsignificantlyhighercostofcapitalrelatedto

illiquidity or uncertainty in the domestic or international financial markets; general domestic and

internationaleconomic

and

political

conditions,

as

well

as

changes

in

tax,

environmental

and

other

laws

applicabletoConocoPhillips

businessandothereconomic,business,competitiveand/orregulatoryfactors

affecting ConocoPhillips

business generally as set forth in ConocoPhillips

filingswith the Securities and

ExchangeCommission(SEC).


3/19

2

HistoricalStrategy

KeyPremises

Integrationcreatesvalue

Scaleandscopeneededtocompete

Growthinhydrocarbondemand

Resourcecapturewillbemoredifficultandexpensive

Execution

Positionedeachbusinesslinetocompeteeffectively

E&P,R&M,MidstreamandChemicals

Quality

assets

but

portfolio

optimization

needed

M&Aintegrationandcostsynergiescaptured

Ledto

significant

value

creation


4/19

3

CashfromOperations

$92B

Capital

Employed

ROCEimprovement

Marginenhancement

Per

share

growth

Shareholderdistributions

CurrentFocus

Increasingshareholder

value

2010cashfromoperationsandaveragecapitalemployed. Corporatecapitalemployeddistributedacrosssegments.

16%

84%

OECD

NonOECD

66%

9%

25%E&P

R&M

Other


5/19

4

CurrentStrategicObjectives

ImproveROCE

ExpandmarginsperBOE Maintaincapitaldiscipline

Portfoliooptimization

Growpershare

Reserves

and

production Earningsandcashflow

Increasedistributions Annualdividendincreases Sharerepurchases

Creatingshareholder

value


6/195

Key2011/2012Initiatives

Disciplined$28Bcapitalprogram

Additional

$5

10

B

in

asset

sales

$10+Binsharerepurchases

100%+reservereplacement

Reducerefiningcapacity

ImproveROCE


7/196

StrategyAssessment

IntegratedStrategyhasbeeneffective

Increasedreservesandproduction

Generatedcompetitiveshareholderreturns

Environmenthaschanged

Downstreamcapabilitynotkeytoresourceaccess

ResourceNationalismandNOCcompetition

Movement

to

service

agreements

ValueofIOCassetsnotreflectedinequityvalue

Transparencyandpotentialofbusinessesnotasclearaspureplays

IncreasinglydifficulttocreatedifferentialvaluetolargerIntegrateds

Emphasisonadditionalvolumesnotalwaysvaluecreating

Continuallytesting

and

assessing

execution

of

strategy


8/197

TransactionSummary

PursuingtaxfreespinofDownstreambusiness

NewindependentpureplaypubliclyheldDownstreamcompany

ConocoPhillipsbecomesleadingpureplayE&Pcompany Expecttransactioncompletioninfirsthalf2012

Creates

two

strong

independent

companies


9/198

StrategicRationale

Create

two

profitable

and

independent

companies

E&PStrategyunchanged

Downstreamgivenopportunitytoaddvaluethroughportfoliooptimization

Greatestopportunitytocreatedifferentialvalue

Independentbutconsistentstrategies

Bothcompaniescontinuetobenefitfromsizeandscale

Bothcompaniestohavestrongfinancialflexibility

Transparencyofpureplayoverintegratedbusinessmodel

Managementfocus

Abilitytoattractandretaintalent


10/199

NewConocoPhillipsDescription

Largest

U.S.

pure

play

E&P

company 1.7MMBOED2011production

8.5BBOEreserves/43BBOEcapturedresource

Strong

OECD

position

Financialandtechnicalcapabilityonparwithlargerintegratedmajors

No

change

in

upstream

strategy ImproveROCE

Persharegrowthinproductionandreserves

Completeportfoliostrengthening

Capitaldiscipline

CompetitiveF&D

ImprovemarginsperBOE

InsertUpstreamPicture

Assetdispositionandsharerepurchaseplansunchanged


11/1910

Total2010Production

1.75MMBOED

~80%OECD

E&POverview

Lower48

440MBOEDCompetitive

opportunityset

2011Exploration&appraisalactivity

Internationalgrowth

opportunities

underpinned

by

OECD

position

Canada

270MBOED

WorldclassSAGD1

portfolio&new

resourceplays

NorthSea

350MBOEDHighvalueexploitation

&majorprojects

Alaska240MBOEDLargestoil&gas

producer

Russia/Caspian

50MBOEDLargeresourcepotential

1 SteamAssistedGravityDrainage

MiddleEast

&

Africa

120MBOED

OilproducingbaseassetswithLNGgrowth

AsiaPacific

280MBOEDDiverse&expanding

legacyposition


12/1911

0.7 0.7 0.7 0.6

0.4 0.4 0.4

0.2

2.8

1.7

2.4

3.53.6

4.8

XOM BP RD

SCVX

TOT

COP

Apache OX

Y

Anad

arko

Devo

n

EOGRe

sour

ces

Maratho

nHe

ss

Murph

yOil

ConocoPhillipsProduction

Q12011

Worldwide

Production

MMBDPeerGroup

DomesticIntegrated

DomesticPurePlays

Source:Companyreports


13/1912

ProductionOutlook

Productionby

Product

MMBOED

0.0

0.5

1.0

1.5

2.0

2.5

2010 2015E

Liquids LNG Int'lgas NAmericagasSources

of

Growth

Excludesimpactoffuturedispositions.

Strongportfolio

of

investments

leads

to

production

growth

AsiaPacific

APLNG,Malaysia,Indonesia

NorthSea

Jasmine,Clair,Ekofisk,Eldfisk

Caspian

Kashagan

L48liquids

EagleFord,Bakken,Barnett,Permian

CanadaSAGD

FCCL,Surmont


14/1913

20112015NewProduction

MBOED

Improvingmargins

through

major

projects

and

exploitation

0

200

400

600

800

2010 2011E 2012E 2013E 2014E 2015E

RestofWorld

OtherL48&

WCanada

NorthSea

SAGD

L48liquidsgrowth

AsiaPacific

Qatargas

3 Attractive

$35/BOE

$31/BOE

$30/BOE

$29/BOE

$14

$40/BOE

Various

Asset/Region 2010

Cash

Margins


15/1914

NewDownstreamCompany

GlobalRefining&Marketingleader

2.4MMBPDworldwiderefiningcapacity

Lowcost,integratedMarketingandTransportation

2MMBPDdomesticcapacity

Significant

position

in

mid

continent

ExposuretoallPADDs

Stronginvestmentgradecreditwithsignificantfinancialflexibility

Strategyfocusedonvaluecreation

ImproveROCEtomidteens

Sellorjointventurelesscompetitiveassets

Disciplined

reinvestment

of

free

cash

flow

Competitiveshareholderdistributions

Earningsandcashflowgrowthpotential

Operatingexcellence

LTAssets

InsertDownstreamPicture


16/1915

0.80.7

0.50.4

0.2 0.2

1.5

0.9

1.1

1.92.0

2.2

Valero COP XOM BP Marathon CVX RDS Tesoro Sunoco HOC/FTO TOT Murphy

Q1

2011

U.S.

Refining

Capacity

MMBDU.S.Refining

Leadingdomesticrefiningcompanywithportfoliooftopquartile

assets

PeerGroup

DomesticIntegrated

DomesticPure

Plays

Source:Companyreports


17/1916

DownstreamROCEImprovement

Selectiveassetsales

FinalizationofWoodRiverCOREproject

Capitaldiscipline

Implementingselectivehighreturnprojects

Optimizationinitiatives

Increaseutilizationandcleanproductyield

Lowercoststructure

Capturefeedstockadvantage

Generatemid

teens

returns

and

free

cash

flow


18/1917

KeyMilestones

DetailedseparationplanningfollowedbyIRStaxrulingrequest

Announcementofnewboardandleadershipteams

FavorableIRSruling

FinalCOPBoardapproval

Expectedclosingfirsthalfof2012


19/1918

DeliveringShareholderValue

100%+reservesreplacement

Production

per

share

growth

Improvedreturns

EPS/CFPSgrowth

Increaseddistributions

Continuedassetsales

StrongOECDbasedcashflow

Enhancedqueueofgrowthprojects

Disciplinedcapital

investment

Strengthenedportfolio

Restructuringconsistent

with

commitment

to

shareholder

returns

restructuring analyst presentation 7-14-11

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