ConocoPhillips Announces First Liquids Production from Bayu-Undan.

Energy Editors/Business Editors

HOUSTON--(BUSINESS WIRE)--Feb. 13, 2004

ConocoPhillips (NYSE:COP) today announced that first liquids production began February 10 from the Bayu-Undan field in the Timor Sea Joint Petroleum Development Area (JPDA).

Liquids production is the first phase in this two-phase project. In this first phase, the Bayu-Undan gas recycle facility will produce and process wet gas; separate and store condensate, propane and butane; and re-inject dry gas back into the reservoir. Full daily design rates of 1.1 billion cubic feet of gas; 115,000 barrels of combined condensate, propane and butane; and 950 million cubic feet of dry gas recycled into the reservoir are anticipated to be reached by the third quarter of 2004.

Bayu-Undan is a gas condensate field that contains estimated recoverable hydrocarbons of 400 million barrels of condensate and liquefied petroleum gas and 3.4 trillion cubic feet of natural gas. The field straddles production sharing contract areas 03-12 and 03-13 in the JPDA between Timor-Leste and Australia. It is located in 80 meters of water about 250 kilometers south of Suai, Timor-Leste, and 500 kilometers northwest of Darwin, Australia.

The second phase is a liquefied natural gas (LNG) project. It is expected to be complete in early 2006, at which time the first LNG cargo from the 3.52 million-ton-per-year facility is scheduled for delivery. It will involve a gas pipeline from the Bayu-Undan field to a LNG facility at Wickham Point, near Darwin. Approvals for this phase have been received and construction of the project has already begun. A binding Heads of Agreement was signed in 2002 with The Tokyo Electric Power Company, Incorporated and Tokyo Gas Co., Ltd. detailing the terms of sale of 3 million tons per year of LNG. The agreement covers a 17-year period and commits nearly 100 percent of the proven natural gas reserves of the field.

ConocoPhillips is the operator of the Bayu-Undan project, with a current participating interest of 56.72 percent (this includes 8.25 percent interest held by Petroz). Co-venturers and their current participating interests are: Eni Australia, 12.04 percent; Santos, 10.64 percent; INPEX, 10.53 percent; Tokyo Electric Power Company, Incorporated and Tokyo Gas Co., Ltd, an aggregate of 10.08 percent.

ConocoPhillips is an integrated petroleum company with interests around the world. Headquartered in Houston, the company had approximately 39,000 employees, $82.5 billion of assets, and $105 billion of revenues as of Dec. 31, 2003. For more information, go to www.conocophillips.com.