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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 3, 2002
ConocoPhillips
(Exact name of registrant as specified in its charter)
Delaware 000-49987 01-0562944
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
600 North Dairy Ashford Road
Houston, Texas 77079
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (281) 293-1000
Item 5. Other Events.
On October 3, 2002, ConocoPhillips issued a notice pursuant
to Rule 135c under the Securities Act of 1933 with respect to a
private offering of $400 million of 3.625% Notes due 2007,
$1 billion of 4.75% Notes due 2012 and $600 million of 5.90% Notes
due 2032 fully and unconditionally guaranteed by its wholly owned
subsidiaries Conoco Inc. and Phillips Petroleum Company. Such
notice is filed as Exhibit 99.1 to this Current Report and is
incorporated herein by reference.
On October 4, 2002, ConocoPhillips announced certain
information about market and operating conditions experienced by
ConocoPhillips during the third quarter of 2002. The press
release issued by ConocoPhillips is filed as Exhibit 99.2 to this
Current Report and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99.1 - Press release issued by ConocoPhillips on
October 3, 2002.
99.2 - Press release issued by ConocoPhillips on
October 4, 2002.
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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
Date: October 7, 2002
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EXHIBIT INDEX
Exhibit
No. Description
- --- -----------
99.1 - Press release issued by ConocoPhillips on October 3, 2002.
99.2 - Press release issued by ConocoPhillips on October 4, 2002.
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Exhibit 99.1
ConocoPhillips 600 North Dairy Ashford (77079-1175)
P. O. Box 2197
Houston, TX 77252-2197
Phone 281.293.1000
www.conocophillips.com
NEWS
RELEASE
CONTACTS:
Kristi DesJarlais (media) 281-293-4595
Clayton Reasor (investors) 212-207-1996
ConocoPhillips Announces Pricing and Sets Terms
On $2 Billion Offering of Senior Notes
HOUSTON, Oct. 3, 2002 --- ConocoPhillips [NYSE:COP] today
announced that it has priced a private offering of $400 million
of 3.625 percent notes due 2007, $1 billion of 4.75 percent notes
due 2012, and $600 million of 5.90 percent notes due 2032.
The notes will be senior unsecured obligations of
ConocoPhillips and will be fully and unconditionally guaranteed
by its wholly owned subsidiaries Conoco Inc. and Phillips
Petroleum Company. The net proceeds from this offering will be
used to repay Conoco Inc.'s $500 million of floating rate notes
due Oct. 15, 2002, and outstanding commercial paper, as well as
for general corporate purposes.
The notes have not been registered under the Securities Act
of 1933 and may not be offered or sold in the United States or to
U.S. persons absent registration or an applicable exemption from
registration requirements.
This press release does not constitute an offer to sell, or
the solicitation of an offer to buy, any security and shall not
constitute an offer, solicitation or sale in any jurisdiction in
which such offering would be unlawful.
# # #
10/3/02
www.conocophillips.com
Exhibit 99.2
October 4, 2002
ConocoPhillips
Third-Quarter 2002 Interim Update
On Aug. 30, 2002, Conoco Inc. (Conoco) and Phillips Petroleum
Company (Phillips) completed their merger to form ConocoPhillips.
This update is intended to give an overview of market and
operating conditions experienced by ConocoPhillips during the
third quarter of 2002. The market indicators and company
estimates may not necessarily reflect, and may differ
considerably from, the company's actual results expected to be
reported on or about Oct. 24, 2002.
Highlights - Third Quarter vs. Second Quarter
o Impact of Merger
o Generally accepted accounting principles required that
purchase accounting be applied to the Conoco assets and
liabilities. Consequently, ConocoPhillips' results for
the third quarter will include three months' activity
for Phillips and one month's activity for Conoco, while
prior periods reflect Phillips' results only.
o The average diluted shares outstanding for the third
quarter are expected to be approximately 484 million.
This number reflects 387 million shares for Phillips for
the first two months of the quarter and 684 million
shares for ConocoPhillips for the last month.
A quarterly earnings financial summary template and related
information can be found at http://www.conocophillips.com/investor/
earnings/3qsummary/template.xls.
o Upstream
o Improved benchmark prices for crude oil.
o U.S. Lower 48 natural gas prices down slightly.
o Production volumes expected to be slightly below
previously stated targets.
o Downstream
o Composite benchmark refining margins down.
o Refining crude oil capacity utilization rate expected
to be in the low 90 percent range.
o Realized marketing margins expected to be down slightly.
Exploration and Production
The table below
(http://www.conocophillips.com/news/nr/earnings/3Qep.asp)
reflects benchmark prices for crude oil and Lower 48 natural gas.
The company's actual realizations may vary from the benchmark
prices due to differentials for quality and location. Results
also may vary due to the effects of pricing lags, particularly in
Alaska.
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Market Indicators
3Q 2002 2Q 2002 3Q 2001
Dated Brent ($/bbl) $26.94 25.04 25.30
WTI ($/bbl) 28.31 26.27 26.64
ANS USWC ($/bbl) 27.31 25.01 23.98
Henry Hub daily average 3.20 3.36 2.76
($/mmcf)
Source: Platt's
ConocoPhillips' average worldwide crude oil sales price for the
third quarter is expected to be higher than that of the previous
quarter, but the company's average natural gas sales price in the
Lower 48 is expected to be lower.
During the quarter, daily barrel-of-oil-equivalent (BOE)
production was lowered as a result of operating difficulties in
Alaska and the U.K. In addition, Gulf of Mexico production was
affected by Tropical Storm Isidore. On a BOE basis, Phillips'
average daily production was near its stated third-quarter target
in both July and August. ConocoPhillips' daily production for
the month of September is expected to average approximately
1.6 million BOE, including Syncrude.
Refining and Marketing
The table below
(http://www.conocophillips.com/news/nr/earnings/3Qrm.asp)
reflects U.S. refining margins for regions where the company
conducts significant refining operations.
Market Indicators
3Q 2002 2Q 2002 3Q 2001
East Coast refining $3.27 3.06 3.97
margin ($/bbl)
Gulf Coast refining 2.79 3.68 3.47
margin ($/bbl)
Mid-Continent refining 5.15 5.05 9.12
margin ($/bbl)
West Coast refining 7.04 7.59 9.64
margin ($/bbl)
Total U.S. refining 4.35 4.60 6.26
margin ($/bbl)
WTI/Maya differential 4.90 4.31 9.40
(trading month $/bbl)
Source: Platt's
It should be noted that Conoco's refining operations are
reflected only for the month of September.
Realized margins may differ due to the company's specific
refinery locations, refinery configurations, crude slates or
operating conditions. The company's average crude oil capacity
utilization rate for the third quarter is expected to be in the
low 90 percent range. Turnaround costs are expected to be
approximately $25 million after-tax.
Refining margins for the third quarter are expected to be down
slightly. Refining results also are expected to be impacted by
continued pressure on the WTI/Maya differential. Tropical Storm
Isidore affected operating rates at the company's Louisiana
refineries, and the Sweeny, Texas, refinery experienced lower
operating rates due to flooding caused by Tropical Storm Fay.
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Marketing margins are expected to be approximately 90 percent of
the levels realized in the second quarter.
Midstream/Chemicals/Emerging Businesses Segments
For the midstream segment, the realized average natural gas
liquids sales price for the third quarter of 2002 is expected to
be above that experienced in the second quarter of the year.
This reflects Phillips' 30 percent interest in Duke Energy Field
Services for all three months, plus Conoco's midstream
operations for September.
In the Chemicals business, operating and market conditions
continued to improve in the third quarter, but this segment
remains negatively impacted by low margins and sluggish demand,
reflecting the ongoing difficult market environment of this
business.
Emerging Businesses' performance will reflect gas-to-liquids,
carbon fibers, fuels technology, and power generation.
Corporate
The company's debt-to-capital ratio at the end of the third
quarter is expected to be approximately 40 percent.
# # #
10/04/02
www.conocophillips.com
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' business segments: petroleum exploration
and production (E&P); petroleum refining and marketing (R&M);
natural gas gathering, processing and marketing (Midstream);
chemicals and plastics manufacturing (Chemicals); and emerging
businesses. There are also forward-looking statements about
ConocoPhillips' expected sales prices for crude oil, natural gas,
and natural gas liquids; crude oil production; refining crack
spreads; marketing margins; refinery utilization rates; and debt-
to-capital ratio. These statements are based on activity from
operations for the first two months of the third quarter of 2002
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, expected to be
reported in the company's earnings release for the third quarter
of 2002 on or about Oct. 24, 2002, 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.
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