ConocoPhillips Provides Second-Quarter 2007 Interim Update

This update is intended to give an overview of market and operating conditions experienced by ConocoPhillips (NYSE:COP) during the second quarter of 2007. The market indicators and company estimates may differ considerably from the company's actual results scheduled to be reported on July 25, 2007.

Highlights - Second-Quarter 2007 vs. First-Quarter 2007

-- Exploration and Production
    -- Higher crude oil prices.
    -- Higher U.S. natural gas prices.
    -- Lower worldwide production, as previously communicated.
    -- Impairment of oil projects in Venezuela, as previously
-- Refining and Marketing
    -- Significantly higher worldwide refining and marketing margins.
    -- Worldwide refining capacity utilization rate similar to the
       first quarter.
-- Midstream and Chemicals
    -- Midstream results expected to be higher than the previous
    -- Chemicals results anticipated to be lower than the previous
-- Corporate and Other
    -- Debt balance of approximately $22.8 billion.
    -- Second-quarter net benefit associated with asset disposition

Exploration and Production (E&P)

The table below provides market price indicators for crude oil and natural gas. The company's actual crude oil and natural gas price realizations may vary from these market indicators due to quality and location differentials, as well as the effect of pricing lags.

Market Indicators

                               2Q 2007  1Q 2007  2Q 2007 vs.  2Q 2006
                                                    1Q 2007
Dated Brent ($/bbl)              $68.76   $57.76       $11.00   $69.62
WTI ($/bbl)                       64.89    57.99         6.90    70.40
ANS USWC ($/bbl)                  65.76    55.69        10.07    68.78
Henry Hub first of month
 ($/mmbtu)                         7.55     6.77         0.78     6.80
                                                        Source: Platts

As previously communicated, second-quarter production on a barrel-of-oil equivalent (BOE) per day basis, including Syncrude and excluding LUKOIL, is anticipated to be lower than the previous quarter primarily due to scheduled maintenance in the North Sea, the company's exit from Dubai, asset disposals, and seasonality in Alaska. Exploration expenses are expected to be approximately $270 million before-tax for the quarter.

As disclosed on June 26, the company expects to record a complete impairment of its entire interest in its oil projects in Venezuela of approximately $4.5 billion, before- and after-tax, in the second-quarter.

Refining and Marketing (R&M)

The table below provides market indicators for regions where the company has significant refining operations. The Weighted U.S. 3:2:1 margin is based on the geographical location and capacity of ConocoPhillips' U.S. refineries. Realized refining margins may differ due to the company's specific locations, configurations, crude oil slates or operating conditions. The company's refining configuration generally yields somewhat higher distillate volumes and lower gasoline volumes than those implied by the market indicators shown below. In addition, marketing margins may differ significantly from the U.S. wholesale gasoline marketing indicator due to the product mix, distribution channel and location of the company's refined product sales.

Market Indicators ($/bbl)

                               2Q 2007  1Q 2007  2Q 2007 vs.  2Q 2006
                                                   1Q 2007
Refining Margins
    East Coast WTI 3:2:1         $22.57   $11.81       $10.76   $15.21
    Gulf Coast WTI 3:2:1          24.28    10.06        14.22    17.26
    Mid-Continent WTI 3:2:1       31.26    14.84        16.42    19.60
    West Coast ANS 3:2:1          34.32    28.68         5.64    32.47
    Weighted U.S. 3:2:1           27.56    15.30        12.26    20.39
    NW Europe Dated Brent
     3:1:2                        15.56    12.06         3.50    15.20
WTI/Maya Differential (trading
 month)                            9.58    12.62       (3.04)    15.69
WTI/Brent Differential
 (trading month)                 (3.87)     0.23       (4.10)     0.78
U.S. Wholesale Gasoline
 Marketing                         1.98     1.15         0.83     1.82
                              Source: Platts, Lundberg Survey and OPIS

Worldwide refining margins for the second quarter are expected to be significantly higher than the first quarter, as indicated in the table above. The improvement in U.S. refining margins is primarily attributable to gasoline crack spreads. However, the full impact of this improvement is not expected to be reflected in realized refining margins due to the company's domestic refining configuration, as described in the paragraph above. In addition, narrowing light-heavy crude oil differentials and the higher cost of other crude oils, relative to WTI, are expected to negatively impact the company's realized refining margins, moderated by anticipated favorable inventory impacts.

Worldwide marketing margins are anticipated to be significantly higher than the first quarter. The company's average crude oil refining capacity utilization rate for the second quarter is expected to be similar to the first quarter. Second-quarter turnaround costs are expected to be approximately $65 million before-tax.

Corporate and Other

The company anticipates second-quarter corporate expenses to be similar to the first quarter. Lower interest expense and the absence of first-quarter premiums on early debt retirement are expected to be offset by higher foreign exchange losses and increased benefit-related charges.

The net second quarter benefit from the company's asset rationalization efforts is expected to be substantially offset by tax, asset retirement and other accruals.

The company's debt balance is expected to be approximately $22.8 billion at the end of the second quarter. The company anticipates second-quarter purchases under the share repurchase program to be approximately $1 billion. The number of weighted-average diluted shares outstanding during the second quarter is expected to be approximately 1,658 million.