Conoco Expects Strong Second Quarter Earnings.

Business/Energy Editors

HOUSTON--(BUSINESS WIRE)--May 16, 2000

Conoco (NYSE:COCA) (NYSE:COCB) said that continued strong crude oil prices, along with rising natural gas prices and a "rebound" in its downstream business could result in strong second quarter earnings along the same lines as the company's first quarter results that were the best in the company's 125-year history.

In remarks prepared for delivery at the company's annual stockholder meeting today, Conoco Chairman and CEO Archie W. Dunham said:

"April was an outstanding month. The rebound we've seen in downstream is very encouraging, as well as the recent rise in natural gas prices. Both these improvements should help offset the seasonal decline in European natural gas demand. If these trends continue, we would expect our second quarter results to be strong, generally in line with our record first quarter earnings."

Dunham described Conoco's oil and gas production growth outlook as the best in the industry, with a 4-5 percent average annual growth rate. He said the company will continue to maintain "strict cost and capital discipline" while generating a 22-percent production increase between 1998 and 2001.

Overall, Conoco's operating costs were cut by 20 cents a barrel in 1999 -- "a major reduction in a single year," he said.

"Last year, fifty percent of our wildcat exploratory wells were potentially commercial, improving on a 30-percent success rate the previous year," he said, noting discoveries in Indonesia, the deepwater Gulf of Mexico and the United Kingdom. "This year, we plan to drill 25-30 wildcat wells in the Gulf of Mexico, Vietnam, Nigeria and other locations."

Downstream -- refining, marketing, supply and transportation -- is contributing to Conoco's ambitious growth plans, Dunham stated. "Our global downstream business committed to deliver $1 billion in cash to fund growth in our upstream operations between the mid-1990s and 2003, and so far it has delivered more than half that amount," he noted. "Our refineries set a throughput record in 1999, with a 6 percent increase from the previous year, and our North American marketing sales volumes under the Conoco brand increased 10 percent in 1999."

Dunham identified several promising new ventures the company currently has underway:

-- An "excellent" Venezuelan joint venture project (Petrozuata)

that contributed more than $50 million to first quarter

earnings, and which has not yet reached peak production;

-- A new carbon fiber product with electrical, thermal and

physical properties which offer new benefits for computer and

cell phone batteries, fiber-reinforced plastic, and concrete

and other materials capable of replacing steel and aluminum in

the construction industry;

-- Expansion in Vietnam which provided immediate production,

reserves and earnings, making Conoco the largest producer and

acreage holder of any energy company in Vietnam; and

-- Several major e-business initiatives to lower costs of

procurement as well as the trading of wholesale energy

products.

In addition, Dunham described his recent meeting with Saudi Arabian government leaders as "promising." The meeting was held to discuss Conoco's proposal to invest in the country's natural gas sector. "Conoco's proposal is innovative and integrated, and I'm looking forward to more discussions in the near future."

Dunham said Conoco was recently ranked the safest among global energy companies in the U.S. for 1999 by the American Petroleum Institute. It was the third consecutive year Conoco topped API safety rankings, and the 15th time in the past 21 years. Conoco employees also ranked number one in the API's first survey of safety performance outside of the U.S.

Conoco is a major, integrated energy company active in more than 40 countries.

This release contains forward-looking statements about Conoco's exploration, production, refining, marketing, manufacturing and other operating and financial plans and 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. Actual outcomes and results may differ materially from what is expressed herein. Among the factors that could cause such differences 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 production from existing and future oil and gas development projects; unsuccessful exploratory drilling activities; potential failure of carbon fiber products to achieve anticipated market share; potential failure of e-commerce ventures to achieve market acceptance; general domestic and international economic and political conditions; inability to obtain government approvals; and potential disruption or interruption of the Company's facilities due to accidents or political events. Such matters are detailed in Conoco's publicly available filings with the Securities and Exchange Commission.