Companies Announce Agreement For North Slope Production.

Business Editors

ANCHORAGE, Alaska--(BUSINESS WIRE)--April 13, 2000

Phillips Petroleum Company, Exxon Mobil Corporation, BP and ARCO announced today that they have reached an agreement to resolve outstanding issues relating to the ownership and operation of the Prudhoe Bay Unit (PBU) and the Point Thomson Unit (PTU) in Alaska.

The agreement will optimize operations, reduce costs and facilitate new oil and gas development in the state for the benefit of the unit owners, the State of Alaska, and its residents.

The agreement, which is subject to the completion of the BP Amoco-ARCO merger and assumes Phillips' acquisition of ARCO's Alaskan assets, aligns the respective equity interests of ExxonMobil, BP and Phillips in the Prudhoe Bay Unit, and provides for a single operator at the PBU. The aligned oil and gas interests among the major owners will be 36.8% for ExxonMobil, 36.5% for Phillips, and 26.7% for BP. BP, current operator of the Western Operating Area in the Prudhoe Bay Unit, will become the single operator. The agreement also aligns interests between ExxonMobil and BP in the Point Thomson field area at 55% and 45%, respectively. Phillips will become a major new operator of the North Slope Kuparuk and Alpine fields, following FTC review and closing of the ARCO Alaska acquisition.

The agreement also resolves the issues that resulted in recent legal action by ExxonMobil relating to North Slope preferential rights and field operatorship.

According to the companies, the agreement provides key advantages for all parties involved:

- It will retain three major working-interest owners in the PBU (ExxonMobil, BP and Phillips).

- It establishes a single operator at Prudhoe Bay, thus providing cost and ultimate recovery advantages.

- It provides a more even distribution of liquids production among the three major working-interest owners. Since today's signing is an agreement between the major-interest companies and still must be agreed to by the minor-interest owners, final equity percentages have not been determined. However, ExxonMobil's and Phillips' liquids production will increase by approximately 30,000 barrels a day respectively, and BP will acquire additional interest in the PBU gas cap and at Point Thomson.

- It would remove the need for lengthy and complex agreements between parties with different interests. The elimination of that step may contribute to improved timelines for new economic developments within the PBU.

The companies stated that the agreement will not only help ensure the efficient and long-term production of the fields, but also will facilitate future Alaska development, including gas commercialization.

Phillips Petroleum is an integrated petroleum company engaged in oil and gas exploration and production worldwide; gas gathering, processing and marketing in the United States; refining, marketing and transportation operations primarily in the United States; chemicals and plastics manufacturing and sales around the globe; and technology development. Founded in Bartlesville, Okla., in 1917, the company had 15,900 employees and $15 billion of assets at the end of 1999, and $14 billion of revenues for the year.

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 about Phillips' exploration and production business, and the acquisition of all of ARCO's Alaska operations, the impact on Phillips' reserves, production, earnings and cash flow. Where in any forward-looking statement, Phillips has expressed an estimate, potential expectation or belief as the future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However there can be no assurance that the statement of expectation or belief will result or be achieved. The actual results may be affected by a variety of risks, which could cause the stated expectation or belief to differ materially. Some of the important risk factors, but not necessarily all such factors that may cause expectations or results to differ, particularly as to reserves, production, earning and cash flow are: consummation of the acquisition of the ARCO assets; state and federal governmental and third-party approvals; the price of oil; interest rates on financing; production results; environmental laws and the cost of compliance with such laws; legislative, tax and regulatory development; and the integration of ARCO personnel, business systems and operations with those of the company. Additional information concerning factors that could cause actual results to differ materially are contained in Phillips' reports with the Securities and Exchange Commission ("SEC"). Copies of the company's SEC filings are available by calling Phillips at 918-661-3700. These reports are also available through Phillips' site on the World Wide Web at http://www.phillips66.com. Phillips undertakes no obligation to update the information in this release.