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ConocoPhillips Approves 2011 Capital Program

Capital Program Consistent with Focus on Enhancing Returns

HOUSTON--(BUSINESS WIRE)--ConocoPhillips [NYSE:COP] today approved a 2011 capital program of $13.5 billion, representing a significant increase in Exploration and Production (E&P) segment expenditures. Almost 90 percent of the capital program will be in support of E&P, while the Refining and Marketing (R&M) segment represents about 9 percent of this year's spending. The 2011 capital program is consistent with the company's plan to enhance returns on equity through shifting capital to higher returning investments, maintaining capital discipline and funding growth in shareholder distributions.

"We expect competitive returns from our increased investments in North American and Australian unconventional resource projects. In addition, we are pursuing organic reserve and production growth by converting our existing resource base to proven reserves, participating in high-impact exploration wells and building acreage positions for future development."

"This year's capital budget reflects our emphasis on building the upstream business," said Jim Mulva, chairman and chief executive officer. "We expect competitive returns from our increased investments in North American and Australian unconventional resource projects. In addition, we are pursuing organic reserve and production growth by converting our existing resource base to proven reserves, participating in high-impact exploration wells and building acreage positions for future development."

"We look forward to discussing our 2011 capital, operating and financial plans in greater detail when we meet with the financial community in March," added Mulva.

Exploration and Production

The 2011 capital program for E&P is approximately $12.0 billion, including capitalized interest of $0.4 billion and $0.7 billion for the company's contributions to the FCCL business venture and loans to other affiliates. This program also includes about $1.7 billion for worldwide exploration.

In North America, the capital program is expected to total approximately $6.0 billion. Spending in North America is increased, compared with prior years, with emphasis on liquids-rich resource plays and highest-return investments.

  • In the U.S. Lower 48, capital funding will be focused on the Eagle Ford and other liquids-rich plays in the Permian, Bakken and Barnett Fields. The program also allows ongoing development in the San Juan Basin and the company's contribution to the Marine Well Containment Company.
  • Spending in Canada will focus on existing SAGD oil sands projects and selective programs in the Western Canada gas basins, primarily on high-graded resource plays and on maintaining a substantial position for future development.
  • Spending in Alaska is expected to be directed toward development of the existing Prudhoe Bay and Kuparuk Fields, as well as the Western North Slope.
In Europe, Asia Pacific and Africa, the E&P capital program is expected to total about $6.0 billion.

  • Within the Asia Pacific region, funds will be used for further development of the coalbed methane-to-LNG project associated with the Australia Pacific LNG joint venture, as well as for the development of new fields offshore Malaysia, Indonesia, and offshore Vietnam.
  • In the North Sea region, spending is planned for existing and new opportunities in the Greater Ekofisk Area, the Greater Britannia Fields, various Southern North Sea assets, and the development of the Jasmine and Clair Ridge projects.
  • Capital for the Africa region is expected to be in support of onshore developments in Nigeria, Algeria and Libya.
  • Spending in the Caspian Sea region is planned to be in support of continued development of the Kashagan Field.
The company will continue its focus on accessing, testing and appraising material opportunities in both conventional and non-conventional oil and gas plays. Exploration plans further appraisal of the Browse Basin Poseidon discovery and the Tiber and Shenandoah discoveries in the Gulf of Mexico. The company also plans to test material prospects in the Gulf of Mexico, Kazakhstan and the North Sea. Delineation of the company's position in the Eagle Ford shale play will continue, as will pilot programs in the Canadian Horn River Basin shale play and Poland.

Refining and Marketing

The 2011 capital program for R&M is approximately $1.2 billion, with about $1.0 billion for its U.S. downstream businesses and the remaining $0.2 billion for international R&M. These funds will be used primarily for projects related to sustaining and improving the existing business with a focus on safety, regulatory compliance, efficiency and reliability.

Other

The 2011 capital program for Corporate and all other segments is approximately $0.3 billion, primarily for global information systems and corporate facilities.

Annual Analyst Meeting

ConocoPhillips will hold its annual analyst meeting on Wednesday, March 23, 2011 at 8:30 a.m. Eastern time in New York City. The meeting will feature presentations by ConocoPhillips executives, including Chairman and Chief Executive Officer Jim Mulva.

Those who wish to listen may do so via ConocoPhillips' Web site. To access the webcast, go to ConocoPhillips' Investor Relations site at www.conocophillips.com/investor and click on the "Register for Webcast" link. You should begin this procedure at least 15-20 minutes prior to the start of the meeting. The meeting's presentations will be available on the webcast page.

ConocoPhillips is an integrated energy company with interests around the world. Headquartered in Houston, the company had approximately 29,700 employees, $156 billion of assets, and $189 billion of revenues as of December 31, 2010. 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 news release includes 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. You can identify our forward-looking statements by words such as "will," "anticipates," "expects," "intends," "plans," "projects," "believes," "estimates," and similar expressions. Forward-looking statements relating to ConocoPhillips' operations are based on management's expectations, estimates and projections about ConocoPhillips and the petroleum industry in general on the date these presentations were given. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Further, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements.

Factors that could cause actual results or events to differ materially include, but are 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; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets; general domestic and international economic and political conditions, as well as changes in tax and other laws applicable to ConocoPhillips' 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 ConocoPhillips' business generally as set forth in ConocoPhillips' filings with the Securities and Exchange Commission (SEC), including our Form 10-K for the year ending December 31, 2009. ConocoPhillips is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

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