ConocoPhillips Reports Second-Quarter Earnings of $3.4 Billion or $2.41 Per Share

ConocoPhillips (NYSE:COP):

Second-Quarter Highlights

• 
  Production of 1.64 million BOE per day
  
• 
  Worldwide refining capacity utilization rate of 91 percent
  
• 
  Repurchased 3 percent of ConocoPhillips shares
  
• 
  Improved E&P and R&M margins
  
• 
  Annualized ROCE of 15 percent
  
• 
  Announced plan to create two leading energy companies
  

ConocoPhillips (NYSE:COP) today reported $3.4 billion second-quarter
earnings and $3.4 billion adjusted earnings. This compares with
second-quarter 2010 earnings of $4.2 billion and adjusted earnings of
$2.5 billion.

'We had a solid quarter,? said Jim Mulva, chairman and chief executive
officer. 'Higher adjusted earnings and cash flow were driven by better
commodity prices and refining margins. Production performance was strong
and capacity utilization of our refineries exceeded 90 percent.? During
the second quarter, ConocoPhillips repurchased 42 million of its own
shares, or 3 percent of shares outstanding, for $3.1 billion. This
brings the company′s total shares repurchased to 9 percent of the shares
outstanding at the inception of the repurchase program in 2010.

ConocoPhillips recently announced its Board had approved pursuing the
separation of the company′s Exploration & Production (E&P) and Refining
& Marketing (R&M) businesses into two leading energy companies. 'This is
consistent with our strategy to create differentiated value for our
shareholders,? said Mulva. 'Both companies will be uniquely positioned
in their respective industries, with the management focus, financial
strength and technical capability to successfully invest in the
industry′s highest returning projects.?

The upstream company will be the largest U.S. pure-play E&P business,
positioned for profitable growth from a rich resource base and a
portfolio of quality investment opportunities. Production growth will
come from investments in unconventional liquids-rich resource plays,
SAGD oil sands, LNG, and ultimately from the company′s vast natural gas
position as that market recovers. The new downstream company will be a
low-cost, integrated refining, marketing and transportation
organization, with complex refining assets, an investment grade credit
rating and significant financial flexibility. 'We believe our investors
will see significant long-term benefit from this repositioning, and we
look forward to providing additional information about the transaction
in September,? added Mulva.

E&P′s second-quarter 2011 adjusted earnings were higher, compared with
the same period in 2010, primarily due to stronger commodity prices,
partially offset by higher taxes. Production for the second quarter of
2011 was 1.64 million barrels of oil equivalent (BOE) per day, a
decrease of approximately 90,000 BOE per day versus the same period in
2010. Excluding the impact of dispositions and the civil unrest in
Libya, production exceeded levels from the second quarter of 2010 as new
projects and lower downtime more than offset decline. Production per
share, adjusted for Libya, increased 4 percent over the same period a
year ago.

'Upstream operated well and we are seeing the benefits of our focus on
margins and returns,? said Mulva. 'While our production fell, the
earnings impact was limited as we shifted production from North American
natural gas toward higher margin production of oil sands, Lower 48
liquids and LNG.?

The company continues to expand its footprint in emerging exploration
regions. ConocoPhillips signed a new deepwater production sharing
contract in Bangladesh, was a successful bidder on acreage in the Canol
shale play in northern Canada, and signed an agreement for a potential
interest in the Goldwyer project in the Canning shale basin, onshore
Western Australia. Year to date, the company added a total of 340,000
acres in North America resource plays.

R&M′s second-quarter 2011 adjusted earnings were slightly higher than
the same period of 2010, primarily due to improved U.S. refining
margins. However, international refining margins were lower and costs
were slightly higher driven by foreign exchange impacts. In the quarter,
the U.S. refining crude oil capacity utilization rate was 90 percent and
the international rate was 96 percent.

The Chemicals and Midstream segments posted strong earnings for the
second quarter. The Chemicals segment′s record earnings of $199 million
were primarily due to higher margins, mostly in olefins and polyolefins,
and higher volumes. Midstream earnings of $130 million were more than
double that of a year ago, primarily due to improved natural gas liquids
prices.

Corporate expenses for the quarter of $203 million after-tax were
improved compared with the second quarter of 2010, primarily due to
foreign exchange impacts and lower net interest expense. In addition,
for the total company, controllable costs were flat through the second
quarter compared with a year ago.

ConocoPhillips Contributions to Economic Growth

In addition to generating shareholder value, ConocoPhillips activities
contribute substantially to job creation and economic growth in the
communities in which we operate. During the first half of 2011, the
company spent $6.5 billion on operating expenses, which supported jobs
at ConocoPhillips and its suppliers. A further $6.1 billion was invested
in capital projects helping to create new energy supplies and fuel
additional job creation. ConocoPhillips distributed $6.6 billion to its
wide shareholder base, which includes numerous state and local pension
and investment funds that benefit millions of individual investors and
retirees. In addition, $7.7 billion was paid to governments in the form
of income, production and severance taxes.

Second-Quarter Financial Highlights

For the second quarter of 2011, ConocoPhillips reported earnings of $3.4
billion, or $2.41 per share, compared with earnings of $4.2 billion, or
$2.77 per share, for the same period in 2010. Second-quarter 2011
earnings included an impairment for the Denali pipeline project
cancellation, offset by gains from asset dispositions.

Second-quarter 2011 adjusted earnings were $3.4 billion, or $2.41 per
share, compared with adjusted earnings of $2.5 billion, or $1.63 per
share, for the same period in 2010. Adjusted earnings for the quarter
increased compared with the prior year, primarily due to the impact of
higher commodity prices and global refining margins, partially offset by
the absence of equity earnings from LUKOIL and higher taxes.

During the second quarter of 2011, ConocoPhillips generated $6.3 billion
in cash from operations. The company funded a $3.1 billion capital
program, repurchased $3.1 billion of ConocoPhillips common stock and
paid $0.9 billion in dividends. At June 30, 2011, the company′s cash and
short-term investments were $8.1 billion, including cash and cash
equivalents of $5.5 billion. ConocoPhillips ended the quarter with debt
of $23.2 billion and a debt-to-capital ratio of 25 percent.

Six-Months Financial Highlights

ConocoPhillips′ six-month 2011 earnings were $6.4 billion, compared with
$6.3 billion for the same period in 2010.

Adjusted earnings for the first six months of 2011 were $6.0 billion,
compared with adjusted earnings of $4.7 billion in the corresponding
period of 2010. Adjusted earnings were higher than a year ago, primarily
due to the impact of higher commodity prices and global refining
margins. The increase was partially offset by the absence of equity
earnings from LUKOIL, higher taxes and lower production volumes.

ConocoPhillips will host a conference call at 11 a.m. Eastern time today
to discuss its quarterly results and provide a status update on
operational and strategic plans. To listen to the conference call and
view related presentation materials, go to www.conocophillips.com
and click on the 'Investor Information? link. For detailed supplemental
information, go to www.conocophillips.com/EN/investor/financial_reports/earnings_reports/Pages/index.aspx.

ConocoPhillips is an integrated energy company with interests around the
world. Headquartered in Houston, the company had approximately 29,900
employees, $160 billion of assets, and $244 billion of annualized
revenues as of June 30, 2011. For more information, go to www.conocophillips.com.

CAUTIONARY STATEMENT FOR THE PURPOSES OF THE 'SAFE HARBOR' PROVISIONS

OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This press release contains forward-looking statements within the
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in any forward-looking statement, the company expresses an expectation
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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
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or technical difficulties in constructing or modifying company
manufacturing or refining facilities; unexpected difficulties in
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liability for remedial actions under existing or future environmental
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economic and political conditions; as well as changes in tax,
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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.

Use of Non-GAAP Financial Information -- This press release
includes the terms adjusted earnings and adjusted earnings per share.
These are non-GAAP financial measures. Adjusted earnings and adjusted
earnings per share are included to help facilitate comparisons of
company operating performance across periods.

References in the release to earnings refer to net income
attributable to ConocoPhillips. The terms controllable costs and
operating expenses include production and operating expenses; selling,
general and administrative expenses; and exploration expenses excluding
dry hole costs and leasehold impairments. The term SAGD refers to
steam-assisted gravity drainage.

ConocoPhillips

Aftab Ahmed, 281-293-4138 (media)

aftab.ahmed@conocophillips.com

or

Clayton
Reasor, 212-207-1996 (investors)

c.c.reasor@conocophillips.com