ConocoPhillips Reports Third-Quarter Earnings of $2.6 Billion or $1.91 Per Share

ConocoPhillips (NYSE:COP):

Third-Quarter Highlights

• 
  Production of 1.54 million BOE per day
  
• 
  Sanctioned Australia Pacific LNG project
  
• 
  Worldwide refining capacity utilization rate of 92 percent
  
• 
  Rationalized refining portfolio
  
• 
  Repurchased 3 percent of ConocoPhillips shares
  
• 
  Progressed creation of two leading energy companies
  

ConocoPhillips (NYSE:COP) today reported third-quarter adjusted earnings
of $3.5 billion and earnings of $2.6 billion. This compares with
third-quarter 2010 adjusted earnings of $2.2 billion and earnings of
$3.1 billion. Special items for the current quarter of $837 million were
primarily related to losses on asset dispositions, impairments and a tax
law change enacted in the United Kingdom.

'This quarter′s results benefitted from improved market conditions,?
said Jim Mulva, chairman and chief executive officer. 'While commodity
prices were higher, E&P production was lower, mainly due to suspended
operations in Bohai Bay and Libya. Our downstream business ran well,
allowing us to capture stronger refining margins.?

Exploration and Production′s (E&P) third-quarter 2011 adjusted earnings
were higher, compared with the same period in 2010, primarily due to
stronger commodity prices, partially offset by higher taxes and lower
volumes. Excluding the impact of dispositions and the civil unrest in
Libya, production was 90,000 barrels of oil equivalent (BOE) per day
lower than the third quarter of 2010. China production was lower by
32,000 BOE per day, primarily due to suspended operations in Bohai Bay.
Higher planned downtime in the North Sea and unplanned downtime in
Alaska further impacted production by 28,000 BOE per day. Decline in
Russia reduced production by an additional 24,000 BOE per day.
Production per share, excluding Libya, increased by 2 percent, compared
with the prior year.

During the quarter, ConocoPhillips sanctioned the Australia Pacific LNG
(APLNG) project, which holds one of the largest coal seam gas reserve
positions in Australia. This satisfied the final condition for Sinopec′s
subscription for a 15 percent interest in the joint venture. In
Exploration, the company continued to expand its worldwide shale
position and recently resumed deepwater Gulf of Mexico drilling
activities.

Refining and Marketing′s (R&M) adjusted earnings in the third quarter of
2011 were $928 million higher than the corresponding period of 2010,
primarily due to improvement in global refining and marketing margins.
R&M′s reported earnings were $521 million higher than the prior year,
and include charges of $407 million primarily from asset impairments and
losses on dispositions. The U.S. refining crude oil capacity utilization
rate was 92 percent and the international rate was 93 percent. Pre-tax
turnaround expenses for the quarter were $44 million, reflecting a
lighter turnaround schedule. The current quarter included earnings of
approximately $120 million primarily related to hedges on inventory
positions. The cumulative net impact of these hedges year to date is
near zero, and no fourth-quarter hedge impact is expected as these
inventories are liquidated.

During the quarter, ConocoPhillips sold the Wilhelmshaven Refinery and
announced it was seeking a buyer for its Trainer Refinery and associated
pipelines and terminals. The Trainer facility has now been idled and
will permanently close by the end of the first quarter of 2012 if a
sales transaction is unsuccessful. These efforts are consistent with the
company′s stated strategic objective to rationalize low-return refining
assets. Since 2009, the company has decreased its refining capacity by
almost 500,000 barrels per day, from 2.7 million barrels per day to 2.2
million barrels per day, and continues to progress plans to further
reduce capacity over the next couple of years.

At the Wood River Refinery, Coker and Refinery Expansion (CORE) project
construction remains on schedule for completion in October, with total
gross capital spend for the project at $3.8 billion. Project startup
activities continue as planned and are expected to be completed by
mid-November. The CORE project increases the refinery′s crude capacity
by 50,000 barrels per day, enhances its ability to process heavy
Canadian crude, and improves its clean product yield by 5 percent,
resulting in a 50,000 barrel per day increase in gasoline and distillate
production capacity.

The Chemicals and Midstream segments posted strong earnings for the
third quarter. Chemicals earnings of $197 million increased 49 percent
over the prior year, primarily due to higher ethylene margins. Midstream
earnings of $137 million were significantly higher than a year ago,
reflecting improved natural gas liquids prices.

Corporate expenses for the quarter were $267 million after-tax, compared
with $276 million for the third quarter of 2010. Adjusted corporate
expenses were $105 million higher than a year ago, primarily due to the
absence of foreign exchange gains recognized in 2010. Third-quarter 2010
reported expenses also included a $114 million debt retirement premium.

During the third quarter of 2011, ConocoPhillips repurchased
approximately 46 million of its own shares, or 3 percent of shares
outstanding, for $3.2 billion. This brings the company′s total shares
repurchased to 12 percent of the shares outstanding at the inception of
the repurchase program in 2010.

Earlier this month, ConocoPhillips announced the future leaders of the
two independent energy companies that will result from its
repositioning. Ryan Lance will become the CEO of ConocoPhillips, the E&P
company, and Greg Garland will become the CEO of the downstream company.
The company expects to file an initial IRS ruling request this month and
an SEC Form 10 in mid-November. The distribution of the downstream
company shares is expected to occur in the second quarter of 2012.

For the third quarter of 2011, ConocoPhillips reported adjusted earnings
of $3.5 billion, or $2.52 per share, compared with adjusted earnings of
$2.2 billion, or $1.50 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, higher taxes and lower production volumes.

Third-quarter 2011 earnings were $2.6 billion, or $1.91 per share,
compared with earnings of $3.1 billion, or $2.05 per share, for the same
period in 2010. Third-quarter 2011 earnings included the following
special items: $329 million in non-cash charges related to the Trainer
Refinery, a $279 million loss on the dilution of the company′s interest
in APLNG, a $109 million increase in deferred tax expense from tax
legislation enacted in the United Kingdom, a loss on the sale of the
Wilhelmshaven Refinery, as well as costs related to the Bohai Bay
incident.

During the third quarter of 2011, ConocoPhillips generated $5.6 billion
in cash from operations. The company funded a $3.8 billion capital
program, repurchased $3.2 billion of ConocoPhillips common stock and
paid $0.9 billion in dividends. At September 30, 2011, the company′s
cash and short-term investments were $6.0 billion, including cash and
cash equivalents of $3.4 billion. ConocoPhillips ended the quarter with
debt of $23.2 billion and a debt-to-capital ratio of 26 percent.

Adjusted earnings for the first nine months of 2011 were $9.5 billion,
or $6.74 per share, compared with adjusted earnings of $6.9 billion, or
$4.60 per share, 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, lower production
volumes, higher taxes and higher costs.

ConocoPhillips′ nine-month 2011 earnings were $9.0 billion, or $6.42 per
share, compared with $9.3 billion, or $6.21 per share, for the same
period in 2010.

The company is on track to achieve its previously announced $13.5
billion 2011 capital program. Approximately 90 percent of the program is
directed towards E&P, supporting expected reserve replacement for the
year in excess of 100 percent. Production for the fourth quarter is
expected to be 1.56 million to 1.58 million BOE per day, reflecting
continuing suspended operations in Bohai Bay and Libya. Full-year 2011
production is expected to be 1.61 million to 1.62 million BOE per day.

The company remains committed to its $15 billion to $20 billion
2010-2012 asset disposition program. In addition to portfolio
optimization, the company continues to maintain a strong balance sheet
and expects to retire $500 million of maturing debt in the fourth
quarter. The remaining portion of the company′s 2010-2011 share
repurchase program is expected to be completed by year end, bringing
2011 share repurchases to approximately $11 billion.

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 29,700
employees, $155 billion of assets, and $247 billion of annualized
revenues as of September 30, 2011. For more information, go to www.conocophillips.com.

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OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This press release contains forward-looking statements.
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ConocoPhillips undertakes no obligation to update publicly any
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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.

ConocoPhillips

Aftab Ahmed, 281-293-4138 (media)

aftab.ahmed@conocophillips.com

or

Clayton
Reasor, 212-207-1996 (investors)

c.c.reasor@conocophillips.com