ConocoPhillips Chairman and Chief Executive Officer Jim Mulva outlined plans to maintain capital, operating and financial discipline, while capitalizing on ConocoPhillips' integrated portfolio and improving financial position to grow and develop the company with a well-defined set of strong projects worldwide.
"We are pleased with our performance during 2004, and going forward we will maintain our focus on continuous improvement in all of our operations," said Mulva. "We have delivered on the initial objectives we set out to accomplish with the ConocoPhillips merger, yet we know there is much more that remains to be accomplished. As a result, we are raising our own expectations for the future. We are opportunity rich, with a strong and sustainable set of well-defined projects that will provide the momentum to take us into the next decade and further. Our developing legacy projects continue to progress, complemented by our recent LUKOIL transaction, which provides us access to one of the most resource-rich regions of the world. We continue to improve our premier refining portfolio in the United States, and we will look to further optimize and selectively grow our worldwide, integrated operations. In addition, our commercial organization continues to add value to our base businesses.
"We remain committed to generating value for our shareholders through a disciplined approach to improve return on capital employed, strengthen our balance sheet, and produce profitable, long-term growth," added Mulva.
ConocoPhillips continues to strengthen its financial position through debt reduction and equity improvement. The company has again lowered its targeted debt-to-capital ratio, to 20-25 percent. And its recently announced dividend increase, payable Dec. 1, follows through on the company's strategy of annual dividend increases.
In its Exploration & Production (E&P) business, ConocoPhillips plans to grow production and reserves by maintaining stable production in OECD countries and building new legacy businesses elsewhere. In addition, the company will continue to optimize its existing legacy businesses by improving cost and production efficiency. The company is making good progress on its plan to grow its E&P segment to 65-70 percent of capital employed.
In its Refining & Marketing (R&M) segment, ConocoPhillips has plans to maintain its top quartile performance in return on capital employed by leveraging its refining position, strengths and technologies, while operating reliably, further reducing operating costs and optimizing throughout its large, integrated system. The R&M segment also will seek selective, strategic growth where its integrated position presents opportunities along the value chain.
Plans for contributions from the company's Commercial operations, and its Midstream, Chemicals and Emerging Businesses segments also were provided.
"We have strong technological capabilities and financial resources, and more importantly, we have the talent and commitment of an exceptional group of women and men," said Mulva. "They continue to raise the bar in generating returns, and in operating safely, reliably and responsibly. It is their spirit that will enable us to execute the operating and financial plans which are the key ingredients for our success."
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