ConocoPhillips Warns 3Q Profit Hit by Lower Nat. Gas Prices

This update is intended to give an overview of market and operating conditions experienced by ConocoPhillips during the third quarter of 2009. The market indicators and company estimates may differ considerably from the company's actual results scheduled to be reported on October 28, 2009.

Exploration and Production

Exploration and Production third-quarter results are expected to be impacted by continued weakness in North American natural gas prices. Total third-quarter production on a barrel-of-oil equivalent (BOE) per day basis, including Syncrude and excluding LUKOIL, is anticipated to be approximately 1.78 million BOE per day. Third-quarter production was impacted by seasonal planned maintenance activities, mainly in the United Kingdom and Alaska. Exploration expenses are expected to be approximately $400 million before-tax for the quarter.

Refining and Marketing


Refining and Marketing results for the third quarter are expected to be significantly impacted by continued low worldwide distillate margins and narrow light-heavy crude differentials. The company's average worldwide crude oil refining capacity utilization rate for the third quarter is anticipated to be in the upper-80-percent range. The domestic and international utilization rates are expected to be in the lower-90-percent range and upper-70-percent range, respectively. Third-quarter turnaround costs are anticipated to be approximately $80 million before-tax.

Other Segments

The LUKOIL Investment segment results will include a $33 million after-tax positive adjustment to align ConocoPhillips' second-quarter estimate to LUKOIL's second-quarter 2009 actual results reported in August.

Midstream and Chemicals results are expected to be slightly improved over the second quarter of 2009.

The number of weighted-average diluted shares outstanding during the third quarter is anticipated to be approximately 1,498 million.