Conoco Expects Higher Earnings in Third Quarter; Anticipated Yearly Production Growth Rate Expected to be About 10%.

HOUSTON--(BUSINESS WIRE)--Sept. 29, 1999--

Conoco (NYSE:COC) said today that higher crude oil and natural gas prices, as well as continued growth in oil and natural gas production volumes, will result in earnings appreciably higher than current analysts' estimates for the third quarter.

Conoco Chairman, President and Chief Executive Officer Archie W. Dunham said earnings would be in a range of about 4 to 7 cents higher than First Call's current consensus estimate of 33 cents of underlying earnings per share for the third quarter.

"We are very pleased by these results that reflect continued improvement in the business environment and -- more importantly -- our own operational success," Dunham told a meeting of financial analysts in Houston.

"We're on target to produce production growth of about 10 percent in 1999, in line with earlier estimates," he said.

Conoco Executive Vice President for worldwide upstream Rob McKee said the added production was primarily due to increased volumes from the giant U.K. Britannia gas field and the Southern North Sea gas basin; the giant Petrozuata oil field in Venezuela; and the Ursa oil field in the Gulf of Mexico.

"Our ongoing goal is to deliver industry-leading production growth, which we estimate to be between 4 to 5 percent per year on average," said McKee. "Between 1998 and 2001, our growth plans will exceed this goal, reaching a total of about 22 percent. For the first nine months of 1999, our early production estimates indicate that our worldwide natural gas production will be up about 23 percent."

The company made several other announcements at the meeting with analysts:

-- Reduction in debt assumed by the company from DuPont, as a

result of recent higher prices and improved margins. "Debt

will be down about $300 million in the third quarter from the

$5.1 billion of total debt reported at the end of the second

quarter," said Bob Goldman, Conoco's chief financial officer.

"Despite improved prices, we have not adjusted our capital

spending for 1999."

-- A second consecutive discovery drilled by the company's

"Deepwater Pathfinder" drillship in the Gulf of Mexico. The

well is on Green Canyon Block 562 in a high-quality reservoir,

and will require further delineation to determine commercial

significance.

-- A Gulf of Mexico farm-in opportunity with Chevron and Texaco

in Mississippi Canyon Block 1002 in 7,500 feet of water, which

will use the "Deepwater Pathfinder" drillship. "The Pathfinder

is proving to be a strategic asset for Conoco," McKee said.

"It is a sought-after tool in the Gulf of Mexico and is

bringing Conoco additional exploration opportunities."

-- "Significant exploration success" in Indonesia. Five wells

drilled to date in this year's West Natuna Block B delineation

program have all added natural gas reserves, and have exceeded

the gas reserve target that was set for this year's planned

10-well program. In addition, new oil reserves have been added

on the block. Efficient new drilling practices are allowing 10

wells to be drilled at the same cost and time allotment 

usually required for eight wells. "Our West Natuna project is

going extremely well, with a long-term gas sales contract 

signed and more net gas available for a second sale," said

McKee. "In fact, the natural gas development program will

represent Indonesia's first-ever pipeline natural gas exports,

which will begin flowing to Singapore in 2001. We've

demonstrated that we can develop gas markets, and we are

anxious to replicate this experience in the Middle East,

Venezuela, or elsewhere in Asia Pacific."

-- Permission has been granted by the U.S. government for Conoco

to travel to Libya to evaluate its assets in that country,

recognizing that re-entry to Libya by Conoco could only come

after a change in U.S. policy.

-- A $145 million expansion project to produce low sulfur

gasoline and diesel at the company's Humber refinery in the

United Kingdom. "The effort will be in advance of rigorous new

European Union clean fuel specifications, will preserve the

plant's ability to export gasoline to U.S. markets, and will

reinforce the refinery's leading position in European

financial and operating performance," said Gary Edwards,

executive vice president for worldwide downstream.

-- A decision to establish a new business development office in

Syria, where Conoco and its partners are selecting primary

bidders for the engineering/procurement/construction phase of

a major natural gas development project.

-- Progress on the giant, integrated Petrozuata heavy oil joint

venture in Venezuela, which is producing almost 70,000 barrels

a day. The project's second phase, which centers around

construction of a synfuel upgrader facility, is over 70

percent complete. Conoco expects the venture to produce

120,000 barrels a day for 35 years. McKee said recent meetings

with Venezuelan government leaders and new PDVSA management,

including President Hector Ciavaldini, were productive.

"We are convinced that PDVSA will continue to be run as a

professional commercial business and will continue to be an

excellent partner," McKee said.

Conoco is a major, integrated energy company based in Houston and active in 40 countries.

This release contains forward-looking statements about Conoco's production, exploration, and other financial and operating 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. Therefore, actual outcomes and results may differ materially from what is expressed herein. Among the factors that could cause such differences are crude oil and natural gas prices; refining and marketing margins; potential failure to achieve, and potential delays in achieving, expected production from existing and future oil and gas development projects; unsuccessful exploratory drilling activities; general domestic and international economic and political conditions; and potential disruption or interruption of the Company's production facilities due to accidents or political events. Such matters are detailed in Conoco's publicly available filings with the Securities and Exchange Commission.