ConocoPhillips Reports First-Quarter Earnings of $2.9 Billion or $2.27 Per Share

ConocoPhillips (NYSE:COP) today reported first-quarter earnings of $2.9
billion, compared with first-quarter 2011 earnings of $3.0 billion.
Excluding $330 million of special items, first-quarter 2012 adjusted
earnings were $2.6 billion. Special items were primarily related to
gains on asset dispositions, partially offset by impairments and
repositioning costs.

'We operated according to plan during the first quarter of 2012,
achieving production and refinery utilization targets,? said Jim Mulva,
chairman and chief executive officer. 'We continued to progress our
asset divestment program and execution of our major projects and growth
plans. We also accomplished several repositioning milestones, including
obtaining a favorable IRS ruling and final board of directors' approval.
Beginning May 1, 2012, our company will become two leading, independent
energy companies, ConocoPhillips and Phillips 66.?

Exploration & Production (E&P)

E&P′s first-quarter 2012 earnings were $2,548 million, compared with
$2,352 million a year ago. Excluding special items, first-quarter 2012
adjusted earnings were $2,131 million, compared with $2,197 million for
the first quarter of 2011. The slight decrease of $66 million was
primarily due to reduced volumes, higher taxes and lower natural gas
prices, partially offset by higher crude oil and liquefied natural gas
(LNG) prices.

In the first quarter, E&P results benefited from strong crude oil
prices. However, this strength in crude oil prices was offset by
weakness in North American natural gas markets and natural gas liquids
(NGL) prices, as well as a widening spread between crude oil and bitumen
prices. First-quarter results were also adversely impacted by
approximately $85 million after-tax from differences between production
and sales volumes and other timing impacts.

Production for the quarter was 1.64 million barrels of oil equivalent
(BOE) per day, 65,000 BOE per day lower compared with a year ago.
Excluding the decrease in production from dispositions and the
suspension of operations at the Peng Lai Field in Bohai Bay, production
was 9,000 BOE per day higher than a year ago. The company′s continuing
development of U.S. shale plays and Canadian oil sands, combined with
lower downtime and improved well performance, more than offset normal
field decline.

Libyan operations resumed, with average production of 36,000 BOE per day
for the quarter. By quarter-end, gross production from Peng Lai was
40,000 barrels per day under an approved interim reservoir management
plan. This plan is designed to prepare Peng Lai for a safe return to
normal operations. The company continues its administrative discussions
with the State Oceanic Administration to resolve outstanding claims.

Second- and third-quarter production is expected to be impacted by major
turnarounds, scheduled maintenance, seasonality and dispositions.
Consistent with previous guidance, full-year production for 2012 is
expected to be 1.55-1.60 million BOE per day, dependent on the timing of
dispositions.

ConocoPhillips continues to execute compelling near-term growth
opportunities on high-margin projects. In the United States, Eagle Ford,
Bakken and Permian are currently contributing about 135,000 BOE per day.
In the company's Canadian oil sands operations, first-quarter production
increased by approximately 5,000 BOE per day from year-end 2011.
Production in all these areas is expected to grow throughout the year.

In the North Sea, development continues across a number of high-margin
growth projects. At the Jasmine Field, subsurface results are exceeding
expectations as the development progresses toward first production in
2013. Development continues at the Ekofisk South and Eldfisk II
expansion projects toward startup in 2013 and 2014, respectively. In
Malaysia, platforms were lifted into place at the Gumusut Project during
the quarter, with first production expected in late 2012. At the
Australia Pacific LNG Project, final investment decision on the second
LNG train is expected during the second quarter of 2012.

During the quarter, the company completed the acquisition of two
deepwater blocks in Angola′s emerging subsalt play trend; and in the
deepwater Gulf of Mexico, the company was awarded 74 blocks from lease
sale 218 held in the fourth quarter of 2011. In the Browse Basin,
offshore northwest Australia, the appraisal program has resumed with the
drilling of the Boreas well. The well should reach its targeted depth in
the third quarter. Later in 2012, the company expects to drill
additional opportunities in the Gulf of Mexico, including the Tiber and
Shenandoah appraisals.

For the quarter, E&P invested in a $4.2 billion capital program, which
included approximately $500 million for the leasehold acquisitions
described above. For the full year of 2012, E&P expects its capital
program to be approximately $15 billion.

ConocoPhillips remains committed to delivering leading shareholder
distributions and maintaining financial discipline. The company is on
pace to complete approximately $5 billion of share repurchases by the
end of the second quarter of 2012. Further share repurchases will be
tied to ongoing asset dispositions as the company completes its
portfolio optimization.

'As an exclusive E&P company, with a strong and substantial asset base,
ConocoPhillips will have the size and scale, financial strength,
capabilities and competencies to pursue opportunities around the world,?
said Ryan Lance, designated chairman and CEO of ConocoPhillips. 'We will
offer a secure, sector-leading dividend, 3 to 5 percent annual
production growth, 3 to 5 percent annual margin improvement and a
continued focus on returns. We have the portfolio and the plans to
deliver these results through our pipeline of captured opportunities.?

Refining & Marketing (R&M), Chemicals and Midstream

R&M′s worldwide crude oil capacity utilization rate was 91 percent,
reflecting minimal unplanned downtime. The U.S. refining capacity
utilization rate was 89 percent and the international rate was 97
percent. In addition, the worldwide clean product yield remained at 84
percent.

R&M earnings were $452 million, compared with $482 million a year ago.
The slight decrease was primarily due to lower refining margins,
partially offset by higher marketing margins. Refining margins decreased
as the impact of less favorable crude differentials more than offset
improved market crack spreads. Pre-tax turnaround expenses for the
quarter were $176 million, in line with expectations.

The Chemicals segment posted record earnings of $218 million for the
first quarter. Earnings were higher than the prior year, primarily due
to higher margins. Industry margins for ethylene during the quarter were
among the highest recorded in 20 years. With domestic ethylene
utilization rates for the quarter averaging more than 100 percent, the
business was able to capture these strong margins. The Saudi Polymers
Company integrated petrochemicals complex at Jubail Industrial City,
Saudi Arabia, where construction was completed in 2011, is expected to
begin commercial production in the second quarter of 2012.

Midstream earnings of $93 million increased over a year ago due to
higher volumes from less downtime and improved operational performance.
Growth in extracted NGL volumes from Permian, Eagle Ford and the
Denver-Jules Basin also contributed to the volume increase year over
year. Development continues on DCP Midstream′s Sand Hills Pipeline
Project, which will provide critical new capacity for NGL transportation
from the Permian and Eagle Ford producing basins to market centers along
the Gulf Coast. Sand Hills will be phased into service, with completion
of the first phase planned by the third quarter of 2012 to accommodate
DCP Midstream′s growing Eagle Ford liquids volumes. Service to the
Permian Basin is anticipated as soon as the third quarter of 2013.

With ongoing increases projected in NGL and shale oil and gas
production, significant opportunities are expected to expand the
midstream business and grow chemicals capacity.

Phillips 66 will be an advantaged downstream company, with R&M,
Midstream and Chemicals businesses. Each of these businesses is already
a leader in its respective industry. R&M has one of the broadest
geographic bases of its peers. The Midstream business, primarily
conducted through DCP Midstream, LLC, is one of the largest gatherers
and processors of natural gas and NGL. The Chemicals business, conducted
through Chevron Phillips Chemical Company LLC (CPChem), is one of the
largest producers of olefins and polyolefins and has spent the last
decade building a strong position in the Middle East. CPChem also has
significant assets in the United States which are advantaged given NGL
sourced from North American shale plays. This strong portfolio will give
Phillips 66 a unique competitive advantage.

'Phillips 66′s strategic priorities are enhancing returns on capital,
delivering profitable growth and growing shareholder distributions,?
said Greg Garland, designated chairman and CEO of Phillips 66. 'We are
focused on operational excellence and building a great organization to
execute our strategic plans. We will improve returns by capturing margin
improvement opportunities, improving clean product yields and shifting
capital to our higher-return Chemicals and Midstream businesses where
there are growth opportunities. Our financial strength and flexibility
will be a key part of our success. We will pay a competitive dividend,
plan to grow that dividend over time, and will direct free cash to
paying down debt, strategic investments and share repurchases.?

Corporate and Other

Corporate expenses for the quarter were $360 million after-tax, compared
with $304 million for the first quarter of 2011. Excluding special items
of $95 million related to repositioning costs, adjusted corporate
expenses were $265 million for the first quarter of 2012, $39 million
improved compared with a year ago, primarily due to lower net interest
expense and benefit-related expenses. Repositioning costs consisted of
legal, information technology and other consulting services;
benefit-related expenses; and interest expense associated with Phillips
66 senior notes. This brings total repositioning costs incurred through
the first quarter of 2012 to $120 million after-tax.

During the first quarter of 2012, ConocoPhillips repurchased
approximately 25 million of its shares, or 2 percent of shares
outstanding, for $1.9 billion. This brings the company′s total shares
repurchased to approximately 16 percent of the shares outstanding at the
inception of the repurchase program in 2010.

First-Quarter Financial Highlights

ConocoPhillips′ first-quarter 2012 earnings were $2.9 billion, or $2.27
per share, compared with earnings of $3.0 billion, or $2.09 per share,
for the same period in 2011. First-quarter 2012 earnings included gains
from asset sales of $987 million, largely from the Vietnam business unit
sale, as well as noncash impairments of $562 million, primarily related
to the Mackenzie Gas Project and associated leaseholds.

First-quarter adjusted earnings were $2.6 billion, or $2.02 per share,
compared with adjusted earnings of $2.6 billion, or $1.82 per share, for
the same period in 2011. Adjusted earnings for the quarter were flat
compared with the prior year, as impacts from lower production volumes
and refining margins were offset by improvements from higher commodity
prices and marketing margins. Adjusted earnings per share increased 11
percent due to the company′s ongoing share repurchase program.

During the first quarter of 2012, ConocoPhillips generated $4.2 billion
in cash from operations and received $1.1 billion in proceeds from asset
dispositions. The company funded a $4.4 billion capital program,
repurchased $1.9 billion of ConocoPhillips common stock, and paid $0.8
billion in dividends.

At quarter end, the company had $3.7 billion in cash and $0.5 billion in
short-term investments. As of March 31, 2012, debt was $28.4 billion,
reflecting the placement of $5.8 billion of senior notes for Phillips
66. A corresponding balance was held in restricted cash at March 31,
2012.

Repositioning

Completion of the repositioning into two independent, leading energy
companies is set for May 1, 2012. ConocoPhillips shareholders as of the
record date of April 16, 2012, will receive the distribution of Phillips
66 common stock after market close on April 30, 2012. When-issued
trading for Phillips 66 commenced on April 12, and will continue through
the distribution date. Phillips 66 will trade on the New York Stock
Exchange under the ticker symbol PSX. Replays and transcripts of the
April investor updates given by both companies are available on the
'Investor Information? link at www.conocophillips.com.

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, Texas, the company had approximately
29,700 employees, $163 billion of assets, and $225 billion of annualized
revenues as of March 31, 2012. 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.
Forward-looking statements relate to future events and anticipated
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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,
changes in commodity prices and refining and marketing margins; changes
in expected levels of oil and gas reserves or production; operating
hazards, drilling risks, unsuccessful exploratory activities;
difficulties in developing new products and manufacturing processes;
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company manufacturing or refining facilities; unexpected difficulties in
manufacturing, transporting or refiningcrude oil; international
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existing or future environmental regulations; potential liability
resulting from pending or future litigation; limited access to capital
or significantly higher cost of capital related to illiquidity or
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general domestic and international economic and political conditions; as
well as changes in tax, environmental and other laws applicable to our
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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
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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.

ConocoPhillips

Aftab Ahmed, 281-293-4138 (media)

aftab.ahmed@conocophillips.com

Clayton
Reasor, 212-207-1996 (investors)

c.c.reasor@conocophillips.com