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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): July 1, 2004
ConocoPhillips
(Exact name of registrant as specified in its charter)
Delaware 000-49987 01-0562944
(State or other jurisdiction (Commission (I.R.S. Employer
of 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 July 1, 2004.
Item 12. Results of Operations and Financial Condition
On July 1, 2004, ConocoPhillips issued a press release providing a second
quarter 2004 interim update. A copy of the press release is furnished herewith
as Exhibit 99 and incorporated herein by reference.
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
July 1, 2004
EXHIBIT INDEX
Exhibit
No. Description
- --- -----------
99. -- Press release issued by ConocoPhillips on July 1, 2004.
Exhibit 99
ConocoPhillips: Second Quarter 2004 Interim Update
HOUSTON--(BUSINESS WIRE)--July 1, 2004--This update is intended to give an
overview of market and operating conditions experienced by ConocoPhillips
(NYSE:COP) during the second quarter of 2004. The market indicators and company
estimates may differ considerably from the company's actual results to be
reported on July 28, 2004.
Highlights - Second Quarter 2004 vs. First Quarter 2004
-- Exploration and Production
-- Higher worldwide crude oil prices.
-- Worldwide natural gas prices similar to prior quarter.
-- Lower worldwide production, as anticipated.
-- Higher exploration expenses.
-- Refining and Marketing
-- Significantly higher worldwide refining margins.
-- Slightly lower capacity utilization rate.
-- Midstream / Chemicals
-- Lower Midstream volumes.
-- Chemicals level with prior quarter.
-- Corporate
-- Debt-to-capital ratio of 29 percent.
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
2Q 2004
vs.
2Q 2004 1Q 2004 1Q 2004 2Q 2003
- ----------------------------------------------------------------------
Dated Brent ($/bbl) $35.36 31.95 3.41 26.03
- ----------------------------------------------------------------------
WTI ($/bbl) 38.31 35.23 3.08 29.02
- ----------------------------------------------------------------------
ANS USWC ($/bbl) 37.02 34.14 2.88 27.04
- ----------------------------------------------------------------------
Henry Hub First of month
($/mcf) 6.00 5.69 0.31 5.40
- ----------------------------------------------------------------------
Source: Platts
Crude oil and natural gas production for the second quarter is expected to
be approximately 3 percent to 4 percent below that of the previous quarter, as
anticipated. Increased output from Bayu-Undan in the Timor Sea is expected to be
more than offset by the impact of scheduled maintenance, normal seasonal
declines, and the impact of asset sales. Full-year production is still expected
to be approximately 1.56 million barrels of oil equivalent per day, including
Syncrude. Although domestic natural gas prices were higher for the quarter,
international gas prices are expected to offset these increases.
Exploration expenses are expected to be higher than those of the previous
quarter as a result of leasehold impairments in Brazil and Nigeria.
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. In addition, the
company's refining configuration generally yields gasoline volumes somewhat less
than that implied by the market indicators shown below.
Market Indicators
2Q 2004
vs.
($/bbl) 2Q 2004 1Q 2004 1Q 2004 2Q 2003
- ----------------------------------------------------------------------
Refining Margins
- ----------------------------------------------------------------------
East Coast WTI 3:2:1 $9.14 6.87 2.27 3.46
- ----------------------------------------------------------------------
Gulf Coast WTI 3:2:1 9.17 6.36 2.81 3.65
- ----------------------------------------------------------------------
Mid-Continent WTI 3:2:1 11.65 6.91 4.74 6.96
- ----------------------------------------------------------------------
West Coast ANS 3:2:1 24.13 16.10 8.03 11.39
- ----------------------------------------------------------------------
Weighted U.S. 3:2:1 12.60 8.39 4.21 5.86
- ----------------------------------------------------------------------
NW Europe Dated Brent
4:1:2:1 5.13 2.56 2.57 3.17
- ----------------------------------------------------------------------
WTI/Maya differential (trading
month) 8.71 9.36 (0.65) 7.50
- ----------------------------------------------------------------------
Source: Platts
The weighted U.S. refining margin for the second quarter is expected to be
significantly higher than that of the first quarter, as indicated in the table
above. In addition, worldwide marketing margins are expected to be slightly
higher. Turnaround costs are expected to be approximately $65 million
before-tax.
The company's average crude oil refining capacity utilization rate for the
second quarter is expected to be in the low 90-percent range. Utilization at
U.S. refineries during the quarter is anticipated to be similar to that of the
previous quarter, while increased turnaround activity at the company's Humber
refinery in the United Kingdom and an equity affiliate operation in Malaysia
resulted in an overall reduction for the company.
Corporate
The company expects its debt-to-capital ratio to be approximately 29
percent, down from 32 percent at the end of the previous quarter.
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 and natural gas prices; expected crude oil, natural gas,
natural gas liquids and Syncrude production; expected exploration expenses;
weighted U.S. refining margins; marketing margins; refinery utilization rates;
turnaround costs; and debt-to-capital ratio. These statements are based on
activity from operations for the first two months of the second quarter of 2004
and include estimated results for June, 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
second quarter of 2004 on July 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.
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. We use certain terms in this release, such as
"including 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. This
information can also be obtained from the SEC by calling 1-800-SEC-0330.
CONTACT: ConocoPhillips, Houston
Kristi DesJarlais, 281-293-4595