Conoco Announces Earnings.Business Editors HOUSTON--(BUSINESS WIRE)--Oct. 22, 2001 -- The company restructured its dual class of stock into a new, single class of common stock. The combination of Class A and Class B common stock, approved by shareholders on September 21, was completed on October 8, when the new shares first traded on the New York Stock Exchange. -- The Castricum-Zee field offshore The Netherlands achieved first production. The field, acquired during the purchase of Gulf Canada, has potential gross recoverable reserves of approximately 70 billion cubic feet of natural gas (35 bcf net). -- Development is moving forward on the Clair field, the largest undeveloped field on the U.K. Continental Shelf. Operated by BP, Clair's first phase will produce recoverable reserves of 250 million barrels (60 million net). Conoco has a 24 percent interest in the field. -- Building on the company's continued success in Southeast Asia, a discovery in shallow water on Block 15-1 offshore Vietnam and a field extension offshore Indonesia added future gross reserves between 130 and 440 million barrels of oil equivalent (33 to 103 mmboe net). Both wells are near fields recently declared commercial or under development. -- The Sutu Den discovery, also in Block 15-1, was declared commercial. Production is expected in less than three years from Sutu Den and will be between 200 and 400 gross million barrels of oil (46 to 93 million net). Conoco owns a 23.25 percent interest in the block. -- Conoco and its partners have awarded two engineering, procurement, construction and installation contracts for the $1.6 billion Belanak natural gas development offshore Indonesia. The contracts support natural gas sales agreements totaling 2.5 trillion cubic feet (tcf) from the Conoco-operated South Natuna Block B. -- The U.K. government's quick approval is being sought for development of a recent natural gas discovery in Block 49-16 offshore Lincolnshire. The discovery, known as the Vanguard Extensions prospect, is another success for Conoco's "snuggle" exploration and development program. -- In separate transactions, Norsk-Hydro USA Oil & Gas Inc. and AEC Gulf of Mexico, Inc. farmed-in to Conoco's deepwater exploration programs in the Gulf of Mexico, mitigating risk while reducing the company's future spending requirements. -- Conoco Canada, as part of the Mackenzie Delta Producers Group, signed a memorandum of understanding with the Aboriginal peoples of Canada's Northwest Territories that allows progress toward economic and timely development of a Mackenzie Valley pipeline. Existing discoveries in the Mackenzie Delta are estimated at 5.8 tcf of natural gas, of which Conoco has about 50 percent. -- The company entered into two service contracts designed to promote efficiency and reduce costs. Jacobs Engineering Group, Inc. was selected as the single general contractor to perform supplemental maintenance, turnarounds, and minor capital construction work at Conoco's four U.S. refineries. Also, worldwide information technology services were consolidated under one contractor, Schlumberger, for the next six years. -- For the second consecutive year, Conoco was listed on the Dow Jones Sustainability World Index. Covering more than 30 criteria, the index rates a company's economic, environmental and social performance. Last week, Conoco was named the "Best Place To Work" in Houston by the Houston Business Journal. Conoco (NYSE NYSE See: New York Stock Exchange :COC See chip on chip. ) today said that weaker worldwide crude oil and North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. natural gas prices resulted in lower earnings during the quarter. Net income before special items totaled $404 million, or 64 cents per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, 23 percent below last year's record third quarter of $523 million, or 83 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. . Revenue for the quarter amounted to $9.7 billion, down 9 percent from $10.7 billion last year on lower prices for refined products, crude oil and natural gas. For the first nine months, net income before special items totaled a record $1.6 billion, or $2.56 per share, up 18 percent versus $1.4 billion, or $2.17 per share, earned last year. Revenue for the first three quarters exceeded $30.7 billion, up 6 percent from $28.9 billion last year. "Conoco had an excellent quarter despite a struggling economy, suppressed sup·press tr.v. sup·pressed, sup·press·ing, sup·press·es 1. To put an end to forcibly; subdue. 2. To curtail or prohibit the activities of. 3. demand and lower prices for crude oil and natural gas. Downstream From the provider to the customer. Downloading files and Web pages from the Internet is the downstream side. The upstream is from the customer to the provider (requesting a Web page, sending e-mail, etc.). earnings, aided by solid U.S. refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar margins, and higher international upstream From the consumer to the provider. See downstream. (networking) upstream - Fewer network hops away from a backbone or hub. For example, a small ISP that connects to the Internet through a larger ISP that has their own connection to the backbone is downstream from the larger production, underpinned the quarter," said Archie (ARCHIvE) An earlier Unix utility used to search for file names on Internet FTP sites. Considered by some as the first search engine, in its heyday before the Web, there were approximately 30 Archie servers throughout the Internet that maintained catalogs of files available W. Dunham Dunham is a surname, and may refer to
"Conoco took another very significant step this quarter to increase shareholder value with the rapid completion of the Gulf Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of acquisition. The transaction vastly expands our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth opportunities in several prolific basins in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east. by adding 1.2 billion barrels of probable PROBABLE. That which has the appearance of truth; that which appears to be founded in reason. reserves, including syncrude This article is about Syncrude Canada Ltd.. For synthetic crude oil, see synthetic crude. Syncrude Canada Ltd. is the world's largest producer of synthetic crude oil from oil sands and the largest single source producer in Canada. . At the same time, we increased current production by more than one-third. Only three months after the completion of the transaction, significant progress has been made to integrate the two companies and reduce the debt acquired with the acquisition," he said. "In addition, we've we've Contraction of we have. we've have simplified sim·pli·fy tr.v. sim·pli·fied, sim·pli·fy·ing, sim·pli·fies To make simple or simpler, as: a. To reduce in complexity or extent. b. To reduce to fundamental parts. c. our stock structure by combining Conoco's two classes of stock under the symbol `COC.' The stock is now easier to locate, easier to understand, more liquid, and, therefore, a more attractive stock for investors to own," Dunham said. Special Items Special items during the quarter totaled $147 million, or 24 cents per share, largely associated with the Gulf Canada acquisition and related actions to reduce debt. These included a net charge of $44 million for assets sold or held for sale; a $24 million premium paid for the early retirement of Gulf Canada debt; and a $38 million currency loss. Additionally, a $41 million charge resulted from an adverse ruling on a patent dispute. During the same period last year, a $26 million write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. was recorded for disposal of Conoco's 37.5 percent interest in a Colombian power venture. Including special items, net income totaled $257 million, or 40 cents per share, down from $497 million, or 79 cents per share, earned during the same period last year. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. net income was $1.5 billion, up 8 percent from $1.4 billion in 2000. The following table highlights the third quarter and first nine months of 2000 and 2001.
FINANCIAL AND OPERATING HIGHLIGHTS
(In millions of dollars,
except per diluted
share and production data)
THIRD QUARTER FIRST NINE MONTHS
2001 2000 Change 2001 2000 Change
------ ------ ------ ------- ------ ------
Net Income Before Special
Items 404 523 -23% 1,626 1,374 18%
Net Income Before Special
Items ($ per share) .64 .83 -23% 2.56 2.17 18%
Net Income 257 497 -48% 1,462 1,352 8%
Net Income ($ per share) .40 .79 -49% 2.30 2.14 7%
Diluted Shares Outstanding
(millions of shares) 636 632 635 633
Revenues 9,744 10,697 -9% 30,764 28,894 6%
Total Net Production (MBOED) 831 619 34% 728 648 12%
Note: Table includes Gulf Canada acquisition starting with third
quarter of 2001.
Gulf Canada Update The Gulf Canada acquisition was accretive to earnings by about 5 cents per share. The company reduced debt by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $800 million after the acquisition to $9.7 billion, a significant stride toward the commitment to reduce debt by $2 billion to $2.5 billion over the next 18 to 24 months. Much of Gulf Canada's and Gulf Indonesia Indonesia (ĭn'dənē`zhə), officially Republic of Indonesia, republic (2005 est. pop. 241,974,000), c.735,000 sq mi (1,903,650 sq km), SE Asia, in the Malay Archipelago. Resources Limited's (NYSE: GRL GRL Girl GRL Greenland (ISO Country code) GRL Geophysical Research Letters GRL Air Greenland (ICAO code) GRL global reach laydown (US DoD) GRL Grain Length ) high-cost debt assumed with the transaction was retired during the period as part of the company's recently completed $4.5 billion debt refinancing Refinancing An extension and/or increase in amount of existing debt. . In this regard, a $1 billion asset disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of program was initiated during the quarter, with over $500 million of asset dispositions already sold or announced, including the sale of shallow water See:
Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east crude oil and natural gas properties, the company's interests in Cit-Con (a base oil and wax manufacturing joint venture with Citgo Citgo Petroleum Corporation or Citgo, a subsidiary of Petróleos de Venezuela S.A., the Venezuelan state-owned petroleum company, is a United States-incorporated firm refiner and marketer of gasoline, lubricants, petrochemicals and other petroleum products. ), and Pocahontas Pocahontas (pōkəhŏn`təs), c.1595–1617, Native North American woman, daughter of Chief Powhatan. Pocahontas, meaning "playful one" (her real name was said to be Matoaka), used to visit the English in Virginia at Jamestown. (a coal bed methane methane (mĕth`ān), CH4, colorless, odorless, gaseous saturated hydrocarbon; the simplest alkane. It is less dense than air, melts at −184°C;, and boils at −161.4°C;. and gas gathering system partnership). Other Key Highlights -- The company restructured its dual class of stock into a new, single class of common stock. The combination of Class A and Class B common stock, approved by shareholders on September 21, was completed on October 8, when the new shares first traded on the New York Stock Exchange. -- The Castricum-Zee field offshore The Netherlands achieved first production. The field, acquired during the purchase of Gulf Canada, has potential gross recoverable reserves of approximately 70 billion cubic feet of natural gas (35 bcf net). -- Development is moving forward on the Clair field, the largest undeveloped field on the U.K. Continental Shelf. Operated by BP, Clair's first phase will produce recoverable reserves of 250 million barrels (60 million net). Conoco has a 24 percent interest in the field. -- Building on the company's continued success in Southeast Asia, a discovery in shallow water on Block 15-1 offshore Vietnam and a field extension offshore Indonesia added future gross reserves between 130 and 440 million barrels of oil equivalent (33 to 103 mmboe net). Both wells are near fields recently declared commercial or under development. -- The Sutu Den discovery, also in Block 15-1, was declared commercial. Production is expected in less than three years from Sutu Den and will be between 200 and 400 gross million barrels of oil (46 to 93 million net). Conoco owns a 23.25 percent interest in the block. -- Conoco and its partners have awarded two engineering, procurement, construction and installation contracts for the $1.6 billion Belanak natural gas development offshore Indonesia. The contracts support natural gas sales agreements totaling 2.5 trillion cubic feet (tcf) from the Conoco-operated South Natuna Block B. -- The U.K. government's quick approval is being sought for development of a recent natural gas discovery in Block 49-16 offshore Lincolnshire. The discovery, known as the Vanguard Extensions prospect, is another success for Conoco's "snuggle" exploration and development program. -- In separate transactions, Norsk-Hydro USA Oil & Gas Inc. and AEC Gulf of Mexico, Inc. farmed-in to Conoco's deepwater exploration programs in the Gulf of Mexico, mitigating risk while reducing the company's future spending requirements. -- Conoco Canada, as part of the Mackenzie Delta Producers Group, signed a memorandum of understanding with the Aboriginal peoples of Canada's Northwest Territories that allows progress toward economic and timely development of a Mackenzie Valley pipeline. Existing discoveries in the Mackenzie Delta are estimated at 5.8 tcf of natural gas, of which Conoco has about 50 percent. -- The company entered into two service contracts designed to promote efficiency and reduce costs. Jacobs Engineering Group, Inc. was selected as the single general contractor to perform supplemental maintenance, turnarounds, and minor capital construction work at Conoco's four U.S. refineries. Also, worldwide information technology services were consolidated under one contractor, Schlumberger, for the next six years. -- For the second consecutive year, Conoco was listed on the Dow Jones Sustainability World Index. Covering more than 30 criteria, the index rates a company's economic, environmental and social performance. Last week, Conoco was named the "Best Place To Work" in Houston by the Houston Business Journal. The following commentary compares segment results for the third quarter with the results for the same period in 2000, excluding the earnings impact of special items. Third quarter 2001 earnings, prices and volumes include Gulf Canada. Upstream Upstream earned $370 million, 20 percent lower than last year, as a result of lower worldwide crude oil and North American natural gas prices, as well as increased operating costs operating costs npl → gastos mpl operacionales , DD&A, and exploration expenses associated with the Gulf Canada transaction. Increased production partially offset the fall in prices and higher costs. Gains on natural gas and crude oil hedges associated with the acquisition totaled $122 million, of which $54 million was recognized in underlying earnings. Given quarter-end prices, the remainder would be recognized through future production beginning in the fourth quarter through 2002. Currently, the hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. program covers approximately 40 percent of Conoco's worldwide crude oil production and 20 percent of North American natural gas production through the end of 2002. Exploration expense totaled $109 million, up 35 percent, reflecting the addition of Gulf Canada and higher dry hole costs. U.S. upstream earned $152 million, down 27 percent, while international upstream earnings decreased 13 percent to $218 million. The company's worldwide net realized crude oil price decreased 20 percent to $21.65 per barrel barrel: see English units of measurement. . Worldwide net realized natural gas price declined 14 percent to $2.87 per thousand cubic feet (mcf), resulting from a 28 percent decrease in U.S. natural gas prices to $2.81 per mcf, partially offset by international gas prices of $2.91 per mcf, a rise of 12 percent. Overall, total production for the quarter, including syncrude, of 831,000 barrels of oil equivalent (BOE BOE Based on Experience BOE Board of Education BOE Boletín Oficial del Estado (Spanish) BOE Bank of England BOE Board of Equalization BOE Board of Elections BOE Barrel of Oil Equivalent BOE Bind on Equip ) per day rose 34 percent from 619,000 BOE per day during the same period last year. The acquisition added about 209,000 BOE per day, in line with previous expectations. Elsewhere, mature field decline in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and the North Sea, asset dispositions and an extended maintenance turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. at the U.K. Britannia Bri·tan·nia n. 1. A female personification of Great Britain or the British Empire. 2. also britannia Britannia metal. field resulted in flat production during the quarter. Including syncrude, worldwide petroleum liquids production of 475,000 barrels per day Barrels per day (abbreviated BPD, bbl/d, bpd, bd or b/d) is a measurement used to describe the amount of crude oil (measured in barrels) produced or consumed by an entity in one day. (bpd) was up 30 percent over the previous year. Worldwide natural gas production was 2.1 bcf per day, up 40 percent from last year. U.S. natural gas volumes fell 4 percent to 790 million cubic feet (mmcf) per day due to Lobo maintenance and natural field decline in Lobo and the shallow water Gulf of Mexico. International natural gas production averaged 1.3 bcf per day, up 93 percent, reflecting an additional 629 mmcf per day from the acquisition. Elsewhere, production increases in Indonesia and the Norwegian Norwegian associated in some way with Norway. Norwegian buhund, Norwegian sheepdog a medium-sized (26-40 lb), spitz-type dog with a short, dense coat in wheaten, black, red or sable, sometimes with black markings on the face, ears North Sea were partly offset by the impact of natural decline and summer maintenance in the U.K. Downstream Downstream earnings of $185 million increased $25 million, or 16 percent, due to improved refinery optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. and stronger U.S. inland INLAND. Within the same country. 2. It seems not to be agreed whether the term inland applies to all the United States or only to one state. It has been holden in Now York that a bill of exchange by one person in one state, on another person in another, is an refining margins. For the first nine months, earnings totaled $536 million, up 50 percent from last year's earnings of $358 million, eclipsing downstream's previous record for an entire year. U.S. downstream earnings of $104 million improved versus last year's earnings of $73 million by 42 percent. U.S. operations benefited from strong margins in inland markets and the fall in crude oil prices, which strengthened co-product margins. Domestic refinery throughputs declined 4 percent, to 559,000 bpd, due to downtime The time during which a computer is not functioning due to hardware, operating system or application program failure. at the Ponca City Ponca City, city (1990 pop. 26,359), Kay co., N Okla., on the Arkansas River; founded 1893 with the opening of the Cherokee Strip, inc. 1899. It is a trade, processing, and shipping hub in a grain, livestock, and oil area. , Okla., refinery. International downstream earnings decreased $6 million to $81 million due to weaker refining margins in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Asia. The decline
in refining margins was partly offset by improved refinery operations
and marketing margins. International throughputs were up slightly to
341,000 bpd, reflecting the return of the U.K. Humber refinery The Humber Refinery is an oil refinery owned by ConocoPhillips. It is located at South Killingholme, North Lincolnshire in the United Kingdom. Situated approximately 10 miles north west of Grimsby, it processes approximately 221,000 barrels of crude oil per day. to full
capacity during the quarter.Worldwide refined product sales were a record 1.4 million bpd, up 4 percent, with increases in all three downstream regions -- U.S., Europe and Asia Pacific. Emerging Businesses The cost of expanding the company's Emerging Businesses increased as expected to $21 million during the quarter. This was due to higher research and development costs for Cevolution(TM), the company's carbon solutions business, and expenses incurred to construct the natural gas refining pilot plant in Ponca City, Okla. Corporate Corporate operating and non-operating expenses totaled $130 million, up $44 million, as increased interest expense on debt was incurred to finance the Gulf Canada acquisition. Other Financial Highlights For the first nine months of the year, the company generated $2.7 billion of cash provided by operations, $400 million more than last year. For the quarter, capital expenditures (excluding the Gulf Canada acquisition) totaled $784 million, bringing year-to-date spending to $1,755 million. To date, proceeds from asset sales totaled $261 million. Cash at quarter-end was $214 million, while debt was $9.7 billion. The net debt ratio at quarter-end was 56 percent. Conoco recently refinanced, at a current average pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta rate of 5.5 percent, the $4.5 billion bridge facility used for the acquisition. The refinancing, along with excess cash, allowed the company to retire retire v. 1) to stop working at one's occupation. 2) to pay off a promissory note, and thus "retire" the loan. 3) for a jury to go into the jury room to decide on a verdict after all evidence, argument and jury instructions have been completed. the bridge facility and pay off a majority of the high-cost debt assumed from Gulf Canada. Outlook In the fourth quarter, production (including syncrude) is expected to be up about 8 to 10 percent over the third quarter. "Fourth quarter earnings continue to be under price pressure with demand impacted by market uncertainty associated with recent events," Dunham said. "Crude prices have continued to slide pending further OPEC OPEC: see Organization of Petroleum Exporting Countries. OPEC in full Organization of the Petroleum Exporting Countries Multinational organization established in 1960 to coordinate the petroleum production and export policies of its action, but natural gas prices have strengthened from their early September September: see month. lows, reversing some of the third quarter decline. Global refined product demand is expected to remain weak due to seasonal patterns, compounded by slowing economies," he said. "Exploration in the fourth quarter remains very active with 17 wells drilling, including 5 appraisal wells, in the U.S., Canada, Vietnam Vietnam (vēĕt`näm), officially Socialist Republic of Vietnam, republic (v), 128,400 sq mi (332,642 sq km), Southeast Asia. Occupying the eastern coastline of the Southeast Asian peninsula, Vietnam is bounded by China on the north, by Laos , Indonesia and Venezuela Venezuela (vĕnəzwā`lə, Span. vānāswā`lä), officially the Bolivarian Republic of Venezuela, republic (2005 est. pop. 25,375,000), 352,143 sq mi (912,050 sq km), N South America. ," he said. "I am extremely pleased with the diversity, integration value and strength of Conoco's assets, even in the current environment. We have added significantly to our North American production and reserve positions, and the acquisition has provided better balance to our global operation and increased our natural gas position. Downstream continues to perform at record levels, confirming our commitment to integration. The company is flexible. We will perform regardless of business or geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. developments, and we remain on track for another excellent earnings year," he said. "As we move into 2002, we have the pleasant task of choosing from an unprecedented number of opportunities -- ranging from development of exploration successes to new business development projects around the world," he concluded. Conoco is a major, integrated energy company active in more than 40 countries. For more information, the company's financial teleconference will be broadcast live today on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.conoco.com at 1:30 p.m. Central time (2:30 p.m. Eastern). Posted on the company's website are additional financial and operating results, along with quarterly pro-forma data for 2000 and the first two quarters of 2001 that incorporate Gulf Canada's results of operations. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. about Conoco's exploration, production, refining, and other operating and financial plans and earnings results. These statements are not guarantees of future performance, involve certain risks, uncertainties, and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Among the factors that could cause actual outcomes and results to differ materially are changes in crude oil and natural gas prices; changes in refining and marketing margins; potential failure to achieve, and potential delays in achieving, expected reserve or production levels from existing and future oil and gas development projects due to operating hazards
Hazards is an independent, union-friendly magazine based in Sheffield, England, which has won major international awards. , drilling risks, and the inherent uncertainties in interpreting in·ter·pret v. in·ter·pret·ed, in·ter·pret·ing, in·ter·prets v.tr. 1. To explain the meaning of: interpreted the ambassador's remarks. See Synonyms at explain. engineering data relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc underground accumulations of oil and gas; unsuccessful exploratory drilling activities; unexpected delays or difficulties in constructing company manufacturing facilities; general domestic and international economic and political conditions; the ability to meet government regulations; potential disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. or interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. of the Company's facilities due to accidents or political events and other matters detailed in Conoco's publicly available filings with the Securities and Exchange Commission. Cautionary Note to U.S. Investors -- The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. that a company has demonstrated by actual production or conclusive Determinative; beyond dispute or question. That which is conclusive is manifest, clear, or obvious. It is a legal inference made so peremptorily that it cannot be overthrown or contradicted. formation tests to be economically ec·o·nom·i·cal adj. 1. Prudent and thrifty in management; not wasteful or extravagant. See Synonyms at sparing. 2. Intended to save money, as by efficient operation or elimination of unnecessary features; economic: and legally producible under existing economic and operating conditions. Syncrude proven reserves are distinguished from proved oil and natural gas reserves because SEC regulations define syncrude as mining-related and not part of conventional oil and natural gas reserves. We use certain terms in this press release, such as "probable reserves", "potential net recoverable reserves", "barrels of oil", "cubic feet of natural gas", and "recoverable reserves" that the SEC's guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. strictly prohibit pro·hib·it tr.v. pro·hib·it·ed, pro·hib·it·ing, pro·hib·its 1. To forbid by authority: Smoking is prohibited in most theaters. See Synonyms at forbid. 2. us from including in filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , File No. 1-14521, available from us at 600 North Dairy dairy 1. a retail outlet for milk products. 2. the feeding and milking sheds on a dairy farm. 3. pertaining to or emanating from an animals or other thing concerned in the production of milk, e.g. dairy goat, dairy cleanser. Ashford Ash·ford , Evelyn Born 1957. American athlete. A sprinter on five Olympic track teams, she won nine Olympic medals, including a gold medal in the 100-meter dash and three gold medals in the four-by-100-meter relay. Road, Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the 77079. You can also obtain this form from the SEC by calling 1-800-SEC-0330.
CONOCO INC.
EARNINGS BY SEGMENT (unaudited)
(millions of dollars)
Three Months Ended Nine Months Ended
September 30 September 30
------------------ -------------------
2001 2000 2001 2000
----- ----- ----- -----
Upstream
United States 131 (1) 208 712 (1)(2) 487 (3)
International 218 252 750 (4) 812
----- ----- ----- -----
Total Upstream 349 460 1,462 1,299
Downstream
United States 40 (5) 73 329 (5)(6) 164 (7)
International 81 87 86 (8) 175
----- ----- ----- -----
Total Downstream 121 160 415 339
Emerging Businesses (21) (37)(9) (55) (55)(9)
Corporate (28) (25) (83) (76)(10)
----- ----- ----- -----
Total ATOI 421 558 1,739 1,507
Non-Operating (164)(11) (61) (277)(11) (155)
----- ----- ----- -----
Net Income 257 497 1,462 1,352
===== ===== ===== =====
Includes the following Special Items:
(1) $44 write-down of certain upstream producing properties held for
sale and $23 gain from the sale of Pocahontas, a natural gas
processing venture.
(2) $8 gain from transition adjustment for implementation of SFAS 133
and 138.
(3) $27 gain from the sale of natural gas processing assets.
(4) $32 gain from transition adjustment for implementation of SFAS 133
and 138.
(5) $23 write-down of assets held for sale and $41 charge related to
adverse ruling on patent dispute.
(6) $3 charge from transition adjustment for implementation of SFAS
133 and 138.
(7) $16 of litigation provisions and $3 for the write-down of related
U.S. refinery assets.
(8) $54 in costs associated with the Humber refinery incident.
(9) $26 write-off for disposal of Conoco's 37.5 percent interest in a
Colombian power venture.
(10) $4 of settlement costs associated with the Separation Agreement
with DuPont related to a discontinued business.
(11) $38 currency loss associated with the purchase of Gulf Canada and
$24 premium charge on the early retirement of debt related to the
acquisition.
CONOCO INC.
EARNINGS BY SEGMENT BEFORE SPECIAL ITEMS (unaudited)
(millions of dollars)
Three Months Ended Nine Months Ended
September 30 September 30
----------------- -----------------
2001 2000 2001 2000
------ ------ ------ ------
Upstream
United States 152 208 725 460
International 218 252 718 812
------ ------ ------ ------
Total Upstream 370 460 1,443 1,272
Downstream
United States 104 73 396 183
International 81 87 140 175
------ ------ ------ ------
Total Downstream 185 160 536 358
Emerging Businesses (21) (11) (55) (29)
Corporate (28) (25) (83) (72)
------ ------ ------ ------
Total ATOI 506 584 1,841 1,529
Non-Operating (102) (61) (215) (155)
------ ------ ------ ------
Net Income 404 523 1,626 1,374
====== ====== ====== ======
CONOCO INC.
STATEMENT OF INCOME (unaudited)
(millions of dollars, except per share)
Three Months Ended Nine Months Ended
September 30 September 30
--------------------- ---------------------
2001 2000 2001 2000
-------- -------- -------- --------
Sales and Other
Operating
Revenues (a) 9,550 10,587 30,345 28,468
Income from Equity
Affiliates 79 87 159 244
Other Income 115(1) 23(2) 260(1)(3)(4) 182(2)(5)
-------- -------- -------- --------
Total Revenues 9,744 10,697 30,764 28,894
Cost of Goods Sold 5,597 6,767 18,353 17,649
Operating Expenses 836(6) 520 2,150(3)(6) 1,573(7)
Selling, General
and Administrative
Expenses 187 199 591 580(8)
Exploration
Expenses (b) 109 81 202 176
Depreciation,
Depletion, and
Amortization 532(9) 305 1,223(9) 953(10)
Taxes Other Than
On Income (a) 1,764 1,782 5,138 5,262
Interest and Debt
Expense 135(11) 78 277(11) 250
------- ------- ------- -------
Income Before
Income Taxes 584 965 2,830 2,451
Provision for
Income Taxes 303 468 1,381 1,099
Income Before
Extraordinary
Item and
Accounting
Change 281 497 1,449 1,352
------- ------- ------- -------
Extraordinary Item (24)(11) -- (24)(11) --
Cumulative Effect
of Accounting
Change -- -- 37(4) --
------- ------- ------- -------
Net Income 257 497 1,462 1,352
======= ======= ======= =======
Earnings Before
Extraordinary Item
and Accounting
Change Per Share
of Common Stock:
Basic $.45 $.80 $2.32 $2.16
Diluted $.44 $.79 $2.28 $2.14
Earnings Per Share
of Common Stock:
Basic $.41 $.80 $2.34 $2.16
Diluted $.40 $.79 $2.30 $2.14
Earnings Before
Special Items Per
Share of Common
Stock:
Basic $.65 $.84 $2.60 $2.20
Diluted $.64 $.83 $2.56 $2.17
Average Shares of
Stock Outstanding:
Basic 625,855,862 623,482,177 625,332,173 624,559,543
Diluted 635,728,249 632,054,181 635,344,805 632,717,181
(a) Includes Petroleum Excise Taxes.
(b) Includes Exploration O&O, Dry Hole Costs, Depreciation, Impairment
of Unproved Properties and Taxes Other Than On Income.
Includes the Pretax Impact of the following Special Items:
(1) $59 currency loss associated with the purchase of Gulf Canada, $35
gain from the sale of Pocahontas, a natural gas producing venture,
and $18 write-down of downstream assets held for sale.
(2) Includes $26 write-off for disposal of Conoco's 37.5 percent
interest in a Colombian power venture.
(3) Includes $50 in costs associated with the Humber refinery incident
($8 in Other Income and $58 in Operating Expenses).
(4) Accounting change is the cumulative transition impact of adoption
on January 1, 2001 of SFAS Nos. 133 and 138 "Accounting for
Derivative Instruments and Hedging Activities." This amount
primarily reflects a pretax gain of $64 ($40 after-tax) related to
changes in the fair value of certain crude oil put options from
their purchase date to the January 1 adoption date of these
standards. Included in "Other Income" is an $84 pretax expense
($53 after-tax) related to changes in the fair value of these same
crude oil put options from Jan 1 to the Sept 30 reporting date.
(5) Includes $42 in gains from the sale of natural gas processing
assets in the U.S.
(6) Includes $65 charge in U.S. Downstream related to adverse ruling
on a patent dispute.
(7) Includes $25 of U.S. Downstream litigation provisions.
(8) Includes $6 of settlement costs associated with the separation
agreement from DuPont related to a discontinued business.
(9) Includes $69 write-down of certain U.S. Upstream producing
properties held for sale.
(10) Includes $5 write-down of certain refinery assets in the U.S.
(11) Extraordinary item is a $41 premium charge on the early
retirement of debt related to the acquisition.
CONOCO INC.
CAPITAL EXPENDITURES AND INVESTMENTS (unaudited) (1)
(millions of dollars)
Three Months Ended Nine Months Ended
September 30 September 30
------------------ -----------------
2001 2000 2001 2000
------ ------ ------ ------
Upstream
United States 191 137 478 390
International 444 788 857 1,289
------ ------ ------ ------
Total Upstream 635 925 1,335 1,679
Downstream
United States 30 101 97 215
International 45 47 148 161
------ ------ ------ ------
Total Downstream 75 148 245 376
Emerging Businesses 57 (43) 147 25
Corporate 17 10 28 21
------ ------ ------ ------
Total 784 1,040 1,755 2,101
====== ====== ====== ======
(1) Excludes acquisition of Gulf Canada of $4.5 billion cash plus
assumed liabilities.
CONOCO INC.
NET EXPLORATION INVESTMENT (unaudited)
(millions of dollars)
Three Months Ended Nine Months Ended
September 30 September 30
------------------ -----------------
2001 2000 2001 2000
------ ------ ------ ------
Cash Expense
United States 19 12 48 40
International 60 45 109 79
------ ------ ------ ------
Total Cash Expense 79 57 157 119
Capital
United States 28 33 63 40
International 100 37 142 118
------ ------ ------ ------
Total Capital 128 70 205 158
Total Exploration
Outlays 207 127 362 277
Exploration Asset Sales -- -- (4) (1)
------ ------ ------ ------
Net Exploration
Investment 207 127 358 276
====== ====== ====== ======
CONOCO INC.
OPERATING DATA AND PRICES (unaudited)
Three Months Nine Months
Ended Sept. 30 Ended Sept. 30
------------- -------------
2001 2000 2001 2000
----- ----- ----- -----
Net Realized Crude Oil Prices
($/Bbl)(1)
United States 23.32 28.60 24.28 27.17
International 21.42 26.92 22.58 25.67
Worldwide 21.65 27.20 22.81 25.91
Net Realized Natural Gas Prices
($/MCF)(1)
United States 2.81 3.91 4.70 2.90
International 2.91 2.60 3.39 2.51
Worldwide 2.87 3.32 3.95 2.70
Net Realized Canadian Syncrude Prices
($/Bbl) 27.60 -- 27.60 --
Net Petroleum Liquids Production
(MBD)(1)
United States 71 81 72 80
International 387 284 335 287
----- ----- ----- -----
Total Net Petroleum Liquids Production 458 365 407 367
Net Natural Gas Production (MMCFD)(1)
United States 790 826 815 825
International 1,346 696 1,077 863
----- ----- ----- -----
Total Net Natural Gas Production 2,136 1,522 1,892 1,688
Net Canadian Syncrude Production (MBD) 17 -- 17 --
Total Net Production (MBOED)(1) 831 619 728 648
Net NGLs Processed (MBD)(1)
United States 53 49 50 52
International 49 46 44 37
----- ----- ----- -----
Total Net NGLs Processed 102 95 94 89
Refinery Inputs Processed (MBD)(1)
United States 559 580 546 566
International 341 339 299 337
----- ----- ----- -----
Total Refinery Inputs Processed 900 919 845 903
Refined Product Sales (MBD)
United States - Downstream 892 871 853 838
International - Downstream 492 458 471 473
Conoco Gas and Power 193 225 182 198
----- ----- ----- -----
Total Refined Product Sales 1,577 1,554 1,506 1,509
(1) Prices and volumes include equity affiliates.
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