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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): April 4, 2007
ConocoPhillips
(Exact name of registrant as specified in its charter)
Delaware 001-32395 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
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 April 4, 2007, ConocoPhillips issued a press release providing a first
quarter 2007 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
(d) Exhibits
99. -- Press release issued by ConocoPhillips on April 4, 2007.
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
April 4, 2007
3
EXHIBIT INDEX
Exhibit
No. Description
- --- -----------
99. -- Press release issued by ConocoPhillips on April 4, 2007.
4
Exhibit 99
First-Quarter 2007 Interim Update
HOUSTON--(BUSINESS WIRE)--April 4, 2007--This update is intended
to give an overview of market and operating conditions experienced by
ConocoPhillips (NYSE:COP) during the first quarter of 2007. The market
indicators and company estimates may differ considerably from the
company's actual results scheduled to be reported on April 25, 2007.
Highlights - First-Quarter 2007 vs. Fourth-Quarter 2006
- -- Exploration and Production
-- Lower crude oil prices.
-- Higher U.S. natural gas prices.
-- Lower worldwide production.
- -- Refining and Marketing
-- Significantly higher worldwide refining margins.
-- Lower worldwide marketing margins.
-- Worldwide refining capacity utilization rate in the
mid-90-percent range.
-- Lower turnaround costs.
- -- Midstream and Chemicals
-- Midstream and Chemicals results expected to be lower than the
previous quarter.
- -- Corporate and Other
-- Debt balance of approximately $23.7 billion.
-- First-quarter net benefit associated with asset disposition
program.
Exploration and Production (E&P)
The table below provides market price indicators for crude oil and
natural gas. The company's actual crude oil and natural gas price
realizations may vary from these market indicators due to quality and
location differentials, as well as the effect of pricing lags.
Market Indicators
- ----------------------------------------------------------------------
1Q 2007 4Q 2006 1Q 2007 vs. 1Q 2006
4Q 2006
- ----------------------------------------------------------------------
Dated Brent ($/bbl) $57.76 $59.68 $(1.92) $61.75
- ----------------------------------------------------------------------
WTI ($/bbl) 57.99 59.94 (1.95) 63.28
- ----------------------------------------------------------------------
ANS USWC ($/bbl) 55.69 55.51 0.18 60.87
- ----------------------------------------------------------------------
Henry Hub first of month
($/mmbtu) 6.77 6.56 0.21 9.01
- ----------------------------------------------------------------------
Source: Platts
First-quarter production on a barrel-of-oil equivalent (BOE) per
day basis, including Syncrude and excluding LUKOIL, is anticipated to
be lower than the previous quarter, primarily due to OPEC reductions
and unplanned downtime in the U.S. Lower 48. Exploration expenses are
expected to be approximately $275 million before-tax for the quarter.
Refining and Marketing (R&M)
The table below provides market indicators for regions where the
company has significant refining operations. The Weighted U.S. 3:2:1
margin is based on the geographical location and capacity of
ConocoPhillips' U.S. refineries. Realized refining margins may differ
due to the company's specific locations, configurations, crude oil
slates or operating conditions. The company's refining configuration
generally yields somewhat higher distillate volumes and lower gasoline
volumes than those implied by the market indicators shown below. In
addition, marketing margins may differ significantly from the U.S.
wholesale gasoline marketing indicator due to the product mix,
distribution channel and location of the company's refined product
sales.
Market Indicators ($/bbl)
- ----------------------------------------------------------------------
1Q 2007 4Q 2006 1Q 2007 vs. 1Q 2006
4Q 2006
- ----------------------------------------------------------------------
Refining Margins
- ----------------------------------------------------------------------
East Coast WTI 3:2:1 $11.81 $7.86 $3.95 $7.52
- ----------------------------------------------------------------------
Gulf Coast WTI 3:2:1 10.06 6.77 3.29 8.28
- ----------------------------------------------------------------------
Mid-Continent WTI
3:2:1 14.84 10.11 4.73 9.81
- ----------------------------------------------------------------------
West Coast ANS 3:2:1 28.68 20.36 8.32 18.87
- ----------------------------------------------------------------------
Weighted U.S. 3:2:1 15.30 10.49 4.81 10.56
- ----------------------------------------------------------------------
NW Europe Dated Brent
3:1:2 12.06 11.46 0.60 10.18
- ----------------------------------------------------------------------
WTI/Maya Differential
(trading month) 12.64 13.04 (0.40) 15.61
- ----------------------------------------------------------------------
U.S. Wholesale Gasoline
Marketing 1.15 1.81 (0.66) 0.71
- ----------------------------------------------------------------------
Source: Platts, Lundberg Survey and OPIS
Worldwide refining margins for the first quarter are expected to
be significantly higher than the fourth quarter, as indicated in the
table above. However, narrowing crude differentials and the periodic
pricing of Brent at a premium to WTI during the quarter are expected
to moderate realized margins at some of the company's domestic
refineries. Worldwide marketing margins are expected to be lower than
the fourth quarter. The company's average crude oil refining capacity
utilization rate for the first quarter is expected to be in the
mid-90-percent range. First-quarter turnaround costs are expected to
be approximately $70 million before-tax.
LUKOIL Investment
Fourth-quarter 2006 results included a positive impact of $60
million after-tax from alignment of the company's estimate of LUKOIL
results to actual results published by LUKOIL. ConocoPhillips does not
anticipate this impact to recur in the first quarter of 2007.
Corporate and Other
The company anticipates first-quarter corporate expenses to be
higher than the fourth quarter. Decreased interest expense is expected
to be more than offset by the absence of fourth-quarter foreign
currency gains of $61 million after-tax and a $14 million after-tax
premium on the early retirement of debt paid in the first quarter.
ConocoPhillips' first-quarter results are expected to include a
net benefit of approximately $500 million after-tax associated with
the company's asset rationalization efforts.
The company's debt balance is expected to be approximately $23.7
billion at the end of the first quarter, representing a reduction in
debt of approximately $3.4 billion from the end of 2006. The company
expects first-quarter purchases under the share repurchase program to
be approximately $1 billion. Total proceeds generated from
first-quarter dispositions under the company's asset rationalization
program are expected to be approximately $1.2 billion. The number of
weighted-average diluted shares outstanding during the first quarter
is expected to be approximately 1,669 million.
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 Section 27A of the Securities Act of 1933, as amended and Section
21E of the Securities Exchange Act of 1934, as amended, which are
intended to be covered by the safe harbors created thereby.
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. The
statements in this update are based on activity from operations for
the first two months of the first quarter of 2007 and include
estimated results for March 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 first quarter of 2007 on April 25, 2007, 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 including,
but not limited to, crude oil and natural gas prices; refining and
marketing margins; potential failure to achieve, and potential delays
in achieving expected reserves or production levels from existing and
future oil and gas development projects due to operating hazards,
drilling risks, and the inherent uncertainties in interpreting
engineering data relating to underground accumulations of oil and gas;
unsuccessful exploratory drilling activities; lack of exploration
success; potential disruption or unexpected technical difficulties in
developing new products and manufacturing processes; potential failure
of new products to achieve acceptance in the market; unexpected cost
increases or technical difficulties in constructing or modifying
company manufacturing or refining facilities; unexpected difficulties
in manufacturing, transporting or refining synthetic crude oil;
international monetary conditions and exchange controls; potential
liability for remedial actions under existing or future environmental
regulations; potential liability resulting from pending or future
litigation; general domestic and international economic and political
conditions, as well as changes in tax 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 (SEC). 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.
CONTACT: ConocoPhillips