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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 6, 2005
ConocoPhillips
(Exact name of registrant as specified in its charter)
Delaware 001-32395 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 January 6, 2005, ConocoPhillips issued a press release providing a
fourth 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 January 6, 2005.
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
January 6, 2005
3
EXHIBIT INDEX
Exhibit
No. Description
- --- -----------
99. -- Press release issued by ConocoPhillips on January 6, 2005.
4
Exhibit 99
ConocoPhillips Fourth Quarter 2004 Interim Update
HOUSTON--(BUSINESS WIRE)--Jan. 6, 2005--This update is intended to
give an overview of market and operating conditions experienced by
ConocoPhillips (NYSE:COP) during the fourth quarter of 2004. The
market indicators and company estimates may differ considerably from
the company's actual results to be reported on Jan. 26, 2005.
Highlights - Fourth Quarter 2004 vs. Third Quarter 2004
-- Exploration and Production
-- Higher worldwide crude oil and natural gas prices.
-- Higher worldwide production, as anticipated.
-- Refining and Marketing
-- Lower U.S. refining margins.
-- Higher marketing margins.
-- Unfavorable inventory impacts.
-- Capacity utilization rate similar to third quarter.
-- Midstream/Chemicals
-- Higher Midstream natural gas liquids prices.
-- Chemicals similar to prior quarter.
-- Corporate
-- Debt-to-capital ratio of 26 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
4Q 2004 3Q 2004 4Q 2004 4Q 2003
vs.
3Q 2004
- ----------------------------------------------------------------------
Dated Brent ($/bbl) $44.00 41.54 2.46 29.42
- ----------------------------------------------------------------------
WTI ($/bbl) 48.29 43.86 4.43 31.17
- ----------------------------------------------------------------------
ANS USWC ($/bbl) 42.61 41.80 0.81 29.45
- ----------------------------------------------------------------------
Henry Hub first of month
($/mcf) 7.07 5.75 1.32 4.60
- ----------------------------------------------------------------------
Source: Platts
The company expects crude oil and natural gas production,
including Syncrude, for the fourth quarter to be 1.6 million barrels
of oil equivalent (BOE) per day and for the full year of 2004 to be
1.56 million BOE per day, excluding the expected increase from LUKOIL.
Fourth quarter production will be higher than that of the previous
quarter as a result of maintenance completed during the third quarter
in Alaska and the North Sea, including the adverse impact of
approximately 15,000 BOE per day due to an announced change in the
governmental royalty rate in Venezuela. Full-year exploration expenses
are estimated to be approximately $700 million, as expected.
Consistent with the company's practice and in accordance with
Securities and Exchange Commission guidelines to use year-end prices
for reserve estimation, due to unusually low year-end Canadian bitumen
value estimates, the company anticipates a negative revision of proved
crude oil reserves for the Surmont project. However, as previously
stated, before application of this negative revision, the company
expects net reserve additions to approximate 2004 production,
excluding acquisitions and sales. Despite the revision, the Surmont
project remains a valuable asset in ConocoPhillips' overall portfolio.
Refining and Marketing
The table below provides market indicators for regions where the
company has significant refining operations. The Weighted U.S. 3:2:1
margin is based on the geographical location and capacity of
ConocoPhillips' U.S. refineries. Realized refining margins may differ
due to the company's specific locations, configurations, crude oil
slates or operating conditions. In addition, the company's refining
configuration generally yields somewhat higher distillate volumes and
lower gasoline volumes than those implied by the market indicators
shown below.
Market Indicators
4Q 2004 3Q 2004 4Q 2004 4Q 2003
vs.
($/bbl) 3Q 2004
- ---------------------------------------------------------------------
Refining Margins
- ---------------------------------------------------------------------
East Coast WTI 3:2:1 $5.73 7.00 (1.27) 4.98
- ---------------------------------------------------------------------
Gulf Coast WTI 3:2:1 4.09 6.33 (2.24) 3.72
- ---------------------------------------------------------------------
Mid-Continent WTI 3:2:1 5.52 8.09 (2.57) 5.34
- ---------------------------------------------------------------------
West Coast ANS 3:2:1 17.25 17.92 (0.67) 11.44
- ---------------------------------------------------------------------
Weighted U.S. 3:2:1 7.24 9.10 (1.86) 5.67
- ---------------------------------------------------------------------
NW Europe Dated Brent
4:1:2:1 3.90 3.90 0.00 3.20
- ---------------------------------------------------------------------
WTI/Maya differential (trading
month) 15.99 11.66 4.33 6.83
- ---------------------------------------------------------------------
U.S. Wholesale Gasoline
Marketing 1.97 1.50 0.47 1.45
- ---------------------------------------------------------------------
Source: Platts
The company's refining margins for the fourth quarter are expected
to be lower than those of the third quarter, as indicated in the table
above, despite wider heavy-light crude oil differentials. Worldwide
marketing margins improved over those of the third quarter, but are
expected to be offset by inventory impacts. Turnaround costs are
expected to be approximately $65 million, before-tax.
The company's average crude oil refining capacity utilization rate
for the fourth quarter is expected to remain in the mid 90-percent
range.
Corporate
The company expects its debt-to-capital ratio to be approximately
26 percent, down from 28 percent at the end of the previous quarter.
As expected, ConocoPhillips brought its total ownership in LUKOIL
shares to approximately 10 percent by year-end 2004.
###
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; anticipated negative revision of
proved crude oil reserves for the Surmont project; exploration
expenses; weighted U.S. refining margins; marketing margins; refinery
utilization rates; turnaround costs; and the debt-to-capital ratio.
These statements are based on activity from operations for the first
two months of the fourth quarter of 2004 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 2004 on Jan. 26, 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