Conoco Chairman -- Proposed Merger of Equals with Phillips an `Excellent Strategic Fit'.

Business/Energy Editors

HOUSTON--(BUSINESS WIRE)--April 23, 2002

Unless the goal is to make the Guinness Book of World Records, size alone matters little in a corporate merger, said Conoco Chairman and CEO Archie Dunham today during a speech to the Greater Houston Partnership.

"What really matters is whether or not the merger allows the two companies involved to leverage their respective strengths to create a stronger competitor with enhanced returns and accelerated growth opportunities from an overall, improved financial and operational position," Dunham said.

Dunham spoke from direct experience, as Conoco (NYSE:COC) currently is awaiting final government approval for its proposed merger of equals with Phillips Petroleum (NYSE:P) announced last November. The merger, which will create the sixth-largest energy company in the world, is expected to close during the second-half of this year.

Dunham said the merger represents an "excellent strategic fit" for both Conoco and Phillips. "ConocoPhillips will be positioned as a stronger, U.S.-based, global energy producer by significantly enhancing its capability and growth prospects on five continents in both current and prospective ventures, while generating major synergies."

Dunham cited specific examples of the two companies' complementary upstream assets, especially in relation to Conoco's current established four core business areas: North America, Europe, northern South America and, more recently, Southeast Asia.

"In North America, Phillips' resources in Alaska -- which include a major stake in North America's largest oil field, Prudhoe Bay -- complement the significant position Conoco now enjoys in Western Canada," said Dunham. "In the North Sea, our combined operations in Norway and the United Kingdom dovetail perfectly."

Dunham explained how approximately half of the new company's combined reserves would be in North America, and that almost three-quarters would be in North America and the North Sea.

"Thus, the majority of our hydrocarbon reserves will be in politically stable and secure regions of the world, and that's an important consideration in the aftermath of September 11," he emphasized.

Citing additional examples of synergies, Dunham noted how Conoco's joint venture Petrozuata project in Venezuela is adjacent to Phillips' Hamaca project. Both facilities convert the tar-like heavy crude oil of Venezuela's Orinoco region into lighter, synthetic crude that can be refined into higher-value petroleum products.

In Asia, he continued, Conoco's strong portfolio of assets and growth opportunities in Indonesia, Malaysia and Vietnam will be enhanced by Phillips' oil holdings in China and natural gas operations in the Timor Sea, north of Australia.

"Conoco has long wanted to add the Middle East and the Caspian as our fifth and sixth core areas -- the merger with Phillips will help us to realize these goals," he said. "We've been in the Middle East for decades, both in Dubai, and later in Libya, until U.S. government sanctions forced suspension of our sizable Libyan operations."

"More recently, we completed a major natural gas processing plant in Syria and we were selected as a partner, along with Shell and TotalFinaElf, in Core Venture 3 -- a multi-billion-dollar natural gas initiative in Saudi Arabia," Dunham said. Since Phillips is a partner in Core Venture 1, ConocoPhillips will be one of only three companies to have positions in two of the large-scale Saudi Arabian ventures.

Synergies in the downstream sector, which includes the refining and distribution end of the business, also are significant, continued Dunham.

"Tripling the size of our existing refining, marketing and transportation businesses, the new company will become the largest refiner-marketer in North America, with a refining capacity in excess of two million barrels per day and 17,000 marketing outlets," he said, adding the new company will have an additional 3,000 retail outlets outside North America.

Conoco's emerging businesses in natural gas-to-liquids and carbon fibers technologies complement Phillips' proprietary sulfur removal technology and manufacturing of petrochemicals and plastics, he continued.

Beyond the significant, long-term value for shareholders, Dunham outlined some of the merger's other, clear-cut financial benefits, which include an annual cost savings in excess of $750 million, a much stronger balance sheet and more capital for investment.

"ConocoPhillips will be a tough, new competitor against the larger, global 'super-majors,'" he stated.

With total assets of around $75 billion, ConocoPhillips will be the largest company headquartered in Houston, Dunham concluded. "And that's great news for Houston," he said.

Conoco is a major, fully integrated energy company active in over 40 countries.

www.conoco.com

Forward-Looking Statement Disclaimer. This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 relating to the Conoco/Phillips merger. These statements are based on management's current expectations, estimates and projections, 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 to be accurate. Actual outcomes and results may differ materially. Factors that could cause actual results to differ materially from those described in the forward-looking statements include without limitation the risk that Conoco's and Phillips' businesses will not be integrated successfully; costs related to the proposed merger; and other economic, business, competitive and/or regulatory factors affecting Conoco's and Phillips' businesses generally as set forth in Conoco's and Phillips' filings with the SEC, including their Annual Reports on Form 10-K for the fiscal year ended 2001, especially in the Management's Discussion and Analysis section, their most recent Quarterly Reports on Form 10-Q and their Current Reports on Form 8-K. Conoco is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.