ConocoPhillips Reports Second-Quarter Earnings of $2.3 Billion or $1.80 Per Share

  ConocoPhillips Reports Second-Quarter Earnings of $2.3 Billion or $1.80 Per
  Share

Adjusted Earnings of $1.5 Billion or $1.22 Per Share

Business Wire

HOUSTON -- July 25, 2012

ConocoPhillips (NYSE: COP) today reported second-quarter 2012 earnings of $2.3
billion, or $1.80 per share, compared with second-quarter 2011 earnings of
$3.4 billion, or $2.41 per share. The current quarter includes one month of
downstream earnings related to discontinued operations associated with the
April 30, 2012, spinoff of Phillips 66. Last year’s quarter included three
months of downstream earnings.

Excluding special items of $732 million, second-quarter 2012 adjusted earnings
were $1.5 billion, or $1.22 per share, compared with second-quarter 2011
adjusted earnings of $2.3 billion, or $1.64 per share. Special items for the
current quarter include $534 million in earnings from discontinued operations
and $285 million from gains on asset sales.

Second-Quarter Highlights

  * Completed spinoff of downstream businesses into Phillips 66.
  * Achieved production of 1.54 million BOE per day.
  * Continued progress on North American unconventional programs.
  * Progressed Australia Pacific LNG’s project with sanction of second train
    in early July.
  * Initiated drilling and acquired additional leases in deepwater Gulf of
    Mexico.
  * Completed disposition of Alba and Statfjord fields.
  * Repurchased 52 million ConocoPhillips shares, representing 4 percent of
    outstanding shares.
  * Paid quarterly dividend of 66 cents per share, consistent with pre-spinoff
    levels.

“We are off to a strong start as an independent E&P company and the business
is running well,” said Ryan Lance, chairman and chief executive officer. “Our
production was on target, our major growth projects are on track and we are
continuing to add to our conventional and unconventional exploration
inventory. We continue to progress our asset sales program, providing
additional financial flexibility to fund our high-margin organic investments.
We remain committed to growing our production by 3 to 5 percent, improving our
financial returns and delivering a sector-leading dividend.”

The company completed the spinoff of its downstream businesses to stockholders
on April 30, with the distribution of Phillips 66 (NYSE: PSX) common stock.
Following completion of this transaction, ConocoPhillips is now the world’s
largest independent exploration and production company, based on proved
reserves and production of liquids and natural gas.

Operations Update

In the Lower 48 and Latin America segment, the company continues to advance
several high-margin growth projects across its asset base. Ongoing ramp up of
production from liquids-rich shale plays, including Eagle Ford and Bakken,
delivered approximately 50,000 barrels of oil equivalent (BOE) per day more
production for the quarter than a year ago. Based on positive results to date,
the company has identified extensive development potential over the next
several years and is directing additional investments to these projects.

In Canada, the company’s oil sands projects continued to perform well, with
production growth from Christina Lake Phase C and Surmont Phase I resulting in
increased bitumen production of 20,000 BOE per day compared to the second
quarter of 2011. Additionally, Surmont Phase II development and further FCCL
expansion phases are on schedule and will lead to further high-margin
production growth over the next several years.

In the Asia Pacific and Middle East segment, Australia Pacific LNG sanctioned
the second production train in July and signed project finance agreements
during the second quarter. The development and construction of all
infrastructure and facilities remain on track for first delivery of LNG
mid-2015. Concurrent with project sanction, ConocoPhillips further reduced its
working interest in the project to 37.5 percent. This reduction, along with
the project financing, lowers future capital requirements from ConocoPhillips
to fund the Australia Pacific LNG project. In Malaysia, development continued
on several projects, including the deepwater Gumusut oil field off the coast
of Sabah, the natural gas Kebabangan Field and oil fields at Malikai and
Siakap North-Petai.

In Europe, development continues across a number of high-margin growth
projects in the North Sea, including the Jasmine Field, Ekofisk South and
Eldfisk II expansion projects. Portfolio optimization continued with the
disposition of the Alba and Statfjord nonoperated fields.

ConocoPhillips continues to build momentum across its unconventional and
conventional exploration portfolio. In unconventional plays, several North
American pilot programs are underway in liquids-rich opportunities that
include Niobrara, Avalon, Wolfcamp and Duvernay. The company is also building
and evaluating positions in additional areas of interest within North America.
Internationally, the company began appraisal activities in Western Australia
to evaluate the company’s large resource potential in the Canning Basin.

In conventional exploration, the company also made significant progress during
the quarter. In the deepwater Gulf of Mexico, drilling is in progress at three
nonoperated wells, including an appraisal well at the Shenandoah prospect and
two wildcat wells at the Bioko and Coronado prospects. The company also
continued to build its deepwater prospect inventory in the Gulf of Mexico,
acquiring additional blocks in the June lease sale. The company now holds more
than 340 blocks in the Gulf of Mexico.

In the Browse Basin, offshore northwest Australia, the appraisal program has
resumed with the drilling of the Boreas well. Seismic activities were
completed in the deepwater Bay of Bengal, offshore Bangladesh. Earlier in the
year, the company completed the acquisition of two deepwater blocks and
recently commenced seismic activities in Angola’s emerging subsalt play trend.

Second-Quarter Review

Production for the second quarter of 2012 was 1.54 million BOE per day,
compared with 1.64 million BOE per day for the second quarter of 2011. As
expected, production was lower due to the impact of dispositions and
maintenance downtime, as well as curtailments in North American conventional
natural gas. Normal field decline was largely offset by additional production
from major projects and drilling programs.

ConocoPhillips’ second-quarter 2012 worldwide realized price for crude oil
decreased $7.39 per barrel to $105.56 per barrel, compared with $112.95 per
barrel for the second quarter of 2011. Realized natural gas prices decreased
by 20 percent from $5.50 per thousand cubic feet (MCF) in the second quarter
of 2011 to $4.41 per MCF for the current quarter.

During the second quarter of 2012, ConocoPhillips repurchased approximately 52
million of its shares, or 4 percent of shares outstanding, for $3.1 billion.
This brings the company’s total shares repurchased to approximately 20 percent
of the shares outstanding at the inception of the repurchase program in 2010.
At June 30, 2012, the outstanding basic shares were 1,215 million.

During the quarter, ConocoPhillips generated $3.0 billion in cash from
continuing operating activities excluding working capital. Current-quarter
cash flows reflect the impact of scheduled downtime in high-margin operations.
Cash provided by continuing operating activities was $2.2 billion, reflecting
a $0.8 billion increase in working capital. The company also received $0.5
billion in proceeds from asset dispositions and increased debt by $0.8
billion. ConocoPhillips funded a $4.0 billion capital program, repurchased
$3.1 billion of its common stock and paid $0.8 billion in dividends.

Six-Month Review

ConocoPhillips’ six-month 2012 earnings were $5.2 billion, or $4.08 per share,
compared with $6.4 billion, or $4.50 per share, for the same period in 2011.
Six-month 2012 adjusted earnings were $3.4 billion, or $2.65 per share,
compared with six-month 2011 adjusted earnings of $4.2 billion, or $2.96 per
share.

Production for the first six months of 2012 was 1.59 million BOE per day,
compared with 1.67 million BOE per day for the same period in 2011. The
decrease was primarily from normal decline and asset dispositions, partially
offset by new production from major projects and other field exploitation.

ConocoPhillips’ six-month 2012 worldwide realized price for crude oil
increased to $108.95 per barrel, compared with $105.42 per barrel for the
first six months of 2011. Realized natural gas prices decreased by 14 percent
from $5.36 per MCF a year ago to $4.61 per MCF for the first six months of
2012.

ConocoPhillips continues to optimize its portfolio through its disposition
program. For the first half of 2012, the company has raised $1.6 billion in
disposal proceeds, including the sale of the Vietnam business unit, Alba and
Statfjord fields in the North Sea and other smaller asset sales. The company
remains on track to complete its $8-$10 billion asset disposition program by
mid-2013, with additional transactions currently in progress.

At June 30, 2012, debt was $23.0 billion and the debt-to-capital ratio was 33
percent. The company had total cash of $6.0 billion, comprised of $5.0 billion
in restricted cash targeted for dividends and debt reduction, and $1.0 billion
of cash and cash equivalents. Quarter-ending cash and debt reflect the impact
of the Phillips 66 spinoff.

ConocoPhillips will host a conference call at 11 a.m. Eastern time today to
discuss its quarterly results and provide a status update on operational and
strategic plans. To listen to the call and view related presentation
materials, go to www.conocophillips.com/investor. For detailed supplemental
information, go to www.conocophillips.com/investor/earnings.

                                --- # # # ---

About ConocoPhillips

Headquartered in Houston, Texas, ConocoPhillips has operations and activities
in 30 countries and approximately 16,500 employees as of June 30, 2012.
Production averaged 1.59 million BOE per day for the six months ended June 30,
2012, and proved reserves were 8.4 billion BOE as of Dec. 31, 2011. For more
information, go to www.conocophillips.com.

CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This press release contains forward-looking statements. 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. 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, changes in commodity prices; changes in
expected levels of oil and gas reserves or production; operating hazards,
drilling risks, unsuccessful exploratory activities; difficulties in
developing new products and manufacturing processes; unexpected cost
increases; international monetary conditions; potential liability for remedial
actions under existing or future environmental regulations; potential
liability resulting from pending or future litigation; limited access to
capital or significantly higher cost of capital related to illiquidity or
uncertainty in the domestic or international financial markets; and general
domestic and international economic and political conditions; as well as
changes in tax, environmental 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. 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.

Use of Non-GAAP Financial Information – This press release includes the terms
adjusted earnings and adjusted earnings per share. These are non-GAAP
financial measures. Adjusted earnings and adjusted earnings per share are
included to help facilitate comparisons of company operating performance
across periods.

References in the release to earnings refer to net income attributable to
ConocoPhillips.

                                                                     
  ConocoPhillips
  Reconciliation of Earnings to
  Adjusted Earnings
  $ Millions, Except as
  Indicated
                                    Second Quarter         Six Months
                                    2012        2011       2012       2011
  Earnings                          $ 2,267     3,402      5,204      6,430
  Adjustments:
  Impairments                         30        -          550        -
  Net gain on asset sales             (285  )   (27    )   (1,222 )   (419   )
  Bohai Bay incidents                 89        -          89         -
  Deferred tax adjustment             (72   )   -          (72    )   -
  Separation costs                    40        -          73         -
  Cancelled projects                  -         54         -          54
  Discontinued operations             (534  )   (1,118 )   (1,246 )   (1,842 )
  Adjusted earnings                 $ 1,535     2,311      3,376      4,223   
                                                                       
  Earnings per share of common      $ 1.80      2.41       4.08       4.50
  stock (dollars)
                                                                       
  Adjusted earnings per share       $ 1.22      1.64       2.65       2.96
  of common stock (dollars)

Contact:

ConocoPhillips
Aftab Ahmed, 281-293-4138 (media)
aftab.ahmed@conocophillips.com
or
Daren Beaudo, 281-293-2073 (media)
daren.beaudo@conocophillips.com
or
Vladimir R. dela Cruz, 212-207-1996 (investors)
v.r.delacruz@conocophillips.com