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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): October 5, 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
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On October 5, 2004, ConocoPhillips issued a press release providing a third
quarter 2004 interim update. A copy of the press release is furnished herewith
as Exhibit 99 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99. -- Press release issued by ConocoPhillips on October 5, 2004.
2
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
October 5, 2004
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EXHIBIT INDEX
Exhibit
No. Description
- --- -----------
99. -- Press release issued by ConocoPhillips on October 5, 2004.
4
Exhibit 99
ConocoPhillips Third Quarter 2004 Interim Update
HOUSTON--(BUSINESS WIRE)--Oct. 5, 2004--This update is intended to
give an overview of market and operating conditions experienced by
ConocoPhillips (NYSE:COP) during the third quarter of 2004. The market
indicators and company estimates may differ considerably from the
company's actual results to be reported on October 27, 2004.
Highlights - Third Quarter 2004 vs. Second Quarter 2004
-- Exploration and Production
-- Higher worldwide crude oil prices.
-- Lower U.S. natural gas prices.
-- Lower worldwide production, as anticipated.
-- Refining and Marketing
-- Lower worldwide refining margins.
-- Higher capacity utilization rate.
-- Midstream / Chemicals
-- Higher Midstream natural gas liquids prices.
-- Improved Chemicals margins.
-- Corporate
-- Debt balance expected to be $15.5 billion.
-- Cash balance expected to be approximately $3 billion.
Exploration and Production
The table below provides market price indicators for crude oil and
natural gas. The company's actual crude oil and natural gas price
realizations may vary from these market indicators due to quality and
location differentials, as well as the effect of pricing lags.
Market Indicators
3Q 2004
vs.
3Q 2004 2Q 2004 2Q 2004 3Q 2003
------- ------- -------- -------
Dated Brent ($/bbl) $41.54 35.36 6.18 28.41
WTI ($/bbl) 43.86 38.31 5.55 30.18
ANS USWC ($/bbl) 41.80 37.02 4.78 28.83
Henry Hub First of month ($/mcf) 5.75 6.00 (0.25) 4.97
Source: Platts
Crude oil and natural gas production for the third quarter is
expected to be approximately 7 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 in the North Sea and Alaska, as well as normal seasonal
declines. Full-year production is still expected to be approximately
1.56 million barrels-of-oil-equivalent per day, including Syncrude.
Third quarter before-tax exploration expenses are expected to be
approximately $200 million, including the impacts of the Zafar-Mashal
well in Azerbaijan.
Refining and Marketing
The table below provides market indicators for regions where the
company has significant refining operations. The Weighted U.S. 3:2:1
margin is based on the geographical location and capacity of
ConocoPhillips' U.S. refineries. Realized refining margins may differ
due to the company's specific locations, configurations, crude oil
slates or operating conditions. In addition, the company's refining
configuration generally yields gasoline volumes somewhat less than
that implied by the market indicators shown below.
Market Indicators
3Q 2004
vs.
($/bbl) 3Q 2004 2Q 2004 2Q 2004 3Q 2003
------- ------- -------- -------
Refining Margins
East Coast WTI 3:2:1 7.00 9.14 (2.14) 6.37
Gulf Coast WTI 3:2:1 6.33 9.17 (2.84) 5.38
Mid-Continent WTI 3:2:1 8.09 11.65 (3.56) 8.32
West Coast ANS 3:2:1 17.92 24.13 (6.21) 14.00
Weighted U.S. 3:2:1 9.10 12.60 (3.50) 7.84
NW Europe Dated Brent 4:1:2:1 3.90 5.13 (1.23) 3.11
WTI/Maya differential
(trading month) 11.66 8.71 2.95 5.89
U.S. Wholesale Gasoline Marketing 1.50 1.83 (0.33) 2.15
Source: Platts
The weighted U.S. refining and marketing margins for the third
quarter are expected to be lower than that of the second quarter, as
indicated in the table above. The heavy-light crude oil differentials
have widened significantly during the quarter, partially offsetting
this decline. Segment results are expected to be negatively impacted
by approximately $60 million, before-tax, related to certain legal and
environmental, and impairment charges. Turnaround costs are expected
to be approximately $50 million before-tax.
The company's average crude oil refining capacity utilization rate
for the third quarter is expected to increase to the mid 90-percent
range, primarily due to decreased international turnaround activity.
Corporate
Corporate expenses from continuing operations will be impacted by
approximately $43 million, after-tax, related to premiums paid during
the quarter on the early retirement of debt.
The company expects the debt balance to be $15.5 billion. In
addition, the company's available cash balance is expected to be
approximately $3 billion, up from $804 million at the end of the
second 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; exploration expenses; weighted U.S.
refining margins; marketing margins; refinery utilization rates;
turnaround costs; corporate expenses; and debt and cash balances.
These statements are based on activity from operations for the first
two months of the third quarter of 2004 and include estimated results
for September, 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 third quarter of 2004 on October 27, 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