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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): January 8, 2004
ConocoPhillips
(Exact name of registrant as specified in its charter)
Delaware 000-49987 01-0562944
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
600 North Dairy Ashford
Houston, Texas 77079
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (281) 293-1000
Item 7. Financial Statements and Exhibits
(c) Exhibits
99. -- Press release issued by ConocoPhillips on January 8, 2004.
Item 12. Results of Operations and Financial Condition
On January 8, 2004, ConocoPhillips issued a press release providing a
fourth quarter 2003 interim update. A copy of the press release is furnished
herewith as Exhibit 99 and incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONOCOPHILLIPS
/s/ Rand C. Berney
--------------------------------------------
Rand C. Berney
Vice President and Controller
January 8, 2004
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EXHIBIT INDEX
Exhibit
No. Description
- -- -----------
99. -- Press release issued by ConocoPhillips on January 8, 2004.
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Exhibit 99.1
ConocoPhillips Fourth Quarter 2003 Interim Update
HOUSTON--(BUSINESS WIRE)--Jan. 8, 2004--This update is intended to
give an overview of market and operating conditions experienced by
ConocoPhillips during the fourth quarter of 2003. The market
indicators and company estimates may differ considerably from the
company's actual results to be reported on Jan. 28, 2004.
Highlights - Fourth Quarter vs. Third Quarter
-- Exploration and Production
-- Slightly higher crude oil and natural gas prices.
-- Daily production approximately 1.59 million
barrels-of-oil-equivalent (BOE).
-- Refining and Marketing
-- Significantly lower U.S. refining margins.
-- Lower U.S. wholesale and retail marketing margins.
-- Capacity utilization rate in the low 90-percent range.
-- Midstream/Chemicals
-- Higher natural gas liquids sales prices in Midstream.
-- Chemicals results unchanged.
-- Corporate
-- Corporate expenses about the same level.
-- Debt balance of $17.8 billion.
Exploration and Production
The table below provides market price indicators for crude oil and
natural gas. The company's actual crude oil and natural gas price
realizations may vary from these market indicators due to quality and
location differentials, as well as the effect of pricing lags.
Market Indicators
4Q 2003 3Q 2003 4Q vs. 3Q 4Q 2002
2003
- ----------------------------------------------------------------------
Dated Brent ($/bbl) $29.42 28.41 1.01 26.78
- ----------------------------------------------------------------------
WTI ($/bbl) 31.17 30.18 .99 28.20
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ANS USWC ($/bbl) 29.45 28.83 .62 26.75
- ----------------------------------------------------------------------
Henry Hub first of month ($/mcf) 4.60 4.97 (0.37) 3.97
- ----------------------------------------------------------------------
Source: Platts
Upstream crude oil, natural gas and natural gas liquids production
for the quarter is expected to be approximately 1.59 million BOE per
day. Improvement from the third quarter is a result of seasonality,
new Vietnam production, and lower overall maintenance activity,
partially offset by operating interruptions in Venezuela, Alaska and
Indonesia. Higher international natural gas prices are expected to be
largely offset by lower U.S. prices. Exploration expenses for the full
year are expected to be approximately $600 million.
Refining and Marketing
The table below provides market indicators for regions where the
company has significant refining operations. The Weighted U.S. 3:2:1
margin is based on the geographical location and capacity of
ConocoPhillips' U.S. refineries. Realized refining margins may differ
due to the company's specific locations, configurations, crude oil
slates or operating conditions.
Market Indicators
4Q 2003 3Q 2003 4Q vs. 3Q 4Q 2002
2003
- ----------------------------------------------------------------------
Refining Margins ($/bbl)
- ----------------------------------------------------------------------
East Coast WTI 3:2:1 $4.98 6.37 (1.39) 4.58
- ----------------------------------------------------------------------
Gulf Coast WTI 3:2:1 3.72 5.38 (1.66) 3.74
- ----------------------------------------------------------------------
Mid-Continent WTI 3:2:1 5.34 8.32 (2.98) 5.69
- ----------------------------------------------------------------------
West Coast ANS 3:2:1 11.44 14.00 (2.56) 8.40
- ----------------------------------------------------------------------
Weighted U.S. 3:2:1 5.67 7.84 (2.17) 5.24
- ----------------------------------------------------------------------
NW Europe Dated Brent 3.20 3.11 .09 2.72
- ----------------------------------------------------------------------
WTI/Maya differential (trading month) 6.83 5.89 .94 6.04
- ----------------------------------------------------------------------
Source: Platts
The weighted U.S. refining margin for the fourth quarter is
expected to be significantly lower than that of the third quarter, as
indicated in the table above. In addition, the company's realized
crack spreads continues to be negatively affected by the impact of
higher crude oil prices on co-product margins. Both the U.S. wholesale
and retail marketing margins also are expected to decline, further
reducing the segment's results. Turnaround costs are expected to
reduce earnings by approximately $40 million after-tax.
The company's average crude oil refining capacity utilization rate
for the fourth quarter is expected to be in the low 90-percent range,
in part due to the negative impact of increased turnaround activity
during the quarter.
Corporate
Corporate expenses from continuing operations during the fourth
quarter are expected to be about the same level as those in the
previous quarter. This includes losses on the early redemption of
debt.
The company's balance sheet debt level at the end of the fourth
quarter is expected to be $17.8 billion, representing approximately
$900 million in debt reduction from the end of the third quarter.
During the fourth quarter, the company completed the sale of The
Circle K Corporation.
The company's effective tax rate is expected to be in the mid
40-percent range. Excluding the impact of a one-time international
Exploration and Production tax benefit resulting from a tax rate
reduction enacted by the Canadian Parliament in November 2003, the
company's expected effective tax rate would be in the low 50-percent
range.
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 ConocoPhillips' expected crude oil,
natural gas and natural gas liquids production and prices; expected
exploration expenses; weighted U.S. refining margins; co-product
margins; marketing margins; refinery utilization rates; corporate
charges from continuing operations; balance sheet debt level; and
effective tax rate. These statements are based on activity from
operations for the first two months of the fourth quarter of 2003 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 2003 on Jan. 28,
2004, 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.
CONTACT: ConocoPhillips