ConocoPhillips Approves 2007 Capital Budget of $12.3 Billion, Including $0.5 Billion of Capitalized Interest.Additional $1.2 billion of investments/funding of affiliates; Additional cash available for debt reduction, dividends and share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. HOUSTON -- ConocoPhillips (NYSE NYSE See: New York Stock Exchange :COP) today approved 2007 cash capital expenditures of approximately $11.8 billion. Combined with about $0.6 billion for loans to affiliates and a $0.6 billion contribution to fund the recently announced EnCana transaction, the total cash capital spend is expected to be $13.0 billion. Including capitalized interest Capitalized interest Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time. In the context of project financing, interest that is paid by additional borrowing. of $0.5 billion, the total authorized capital authorized capital n (COMM) → capital m autorizado or social authorized capital n (Comm) → capital social program for 2007 is $13.5 billion. "Our 2007 planned capital program reflects our commitment to selectively invest in projects that will enable us to deliver energy to consumers worldwide, while providing long-term value for our shareholders," said Jim Mulva, chairman and chief executive officer. "The reduction in the 2007 capital program versus the 2006 capital program primarily reflects the company's completion of our planned 20 percent equity investment in LUKOIL. In addition, given the increasingly challenging business environment, which has been marked by rising costs, greater discipline in capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. is warranted to better ensure value delivery over the long term. Accordingly, we have prioritized our capital projects for 2007. This prioritization will enable us to more quickly reduce debt and increase dividends and share repurchases. Assuming continuation of the current cost environment, this capital program is expected to result in a slight reduction to the company's medium-term production growth rate." Eighty-four percent of the company's 2007 total authorized capital program will be allocated to its Exploration and Production segment. The Refining and Marketing segment will receive approximately 13 percent, with the remaining being spent in Emerging Businesses and Corporate. Additional details on the capital program for each of the company's business segments are provided below. "We look forward to discussing our 2007 capital and operating plans in greater detail when we meet with the investment community on March 14, 2007, in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of ," said Mulva. Exploration and Production (E&P) E&P's 2007 capital budget, including capitalized interest of $0.5 billion, is expected to be $10.2 billion. This, combined with approximately $0.6 billion for loans to affiliates and the company's planned $0.6 billion contribution to the EnCana transaction, results in a total E&P capital program of $11.4 billion. Worldwide exploration activities of approximately $1.5 billion and global gas activities of about $0.4 billion are included in the geographic totals below. In North and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , the E&P capital program is expected to be about $6.5 billion. * In the U.S. Lower 48, this includes ongoing development programs in the San Juan Basin The San Juan Basin is a drainage basin and geologic structural basin in the Four Corners region of the Southwestern United States; its main portion covers around 4,600 square miles, encompassing much of northwestern New Mexico, northeastern Arizona, and parts of Colorado and Utah. , the Permian and Barnett Shale The Barnett Shale is a geological formation of economic significance. It consists of sedimentary rocks of Mississippian age in the U.S. State of Texas. The formation is estimated to stretch from the city of Dallas to west of the city of Fort Worth and south, covering 5,000 square basins in the Mid-Continent region and the Bossier Bossier may refer to:
Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. . * Spending in Canada will focus on ongoing development programs in the Western Canada
Western Canada, commonly referred to as the West gas basins; progression of heavy oil projects, including those associated with the EnCana transaction; and continued work on the Mackenzie Delta gas pipeline project. * E&P capital spending in Alaska is expected to be primarily directed toward the development of the Alpine satellites and the West Sak heavy-oil field, as well as continued development within the existing Prudhoe Bay Prudhoe Bay, inlet of the Beaufort Sea and Arctic Ocean, N Alaska, in the Alaska North Slope region, east of the Colville River delta. In 1968 one of the largest oil reserves in North America was discovered in Prudhoe Bay. and Kuparuk areas. * Within South America, the company's primary focus will be on the development of the Corocoro field offshore Venezuela. In Europe, Asia, Africa and the Middle East, the E&P capital program is expected to be approximately $4.9 billion. * Projects in the North Sea include continued development of Britannia, including the Britannia satellite fields, in the U.K. sector; and development of the Alvheim and Statfjord fields, as well as ongoing development of existing and new opportunities in the Ekofisk area in the Norwegian sector. * In the Russia and Caspian Sea Caspian Sea (kăs`pēən), Lat. Mare Caspium or Mare Hyrcanium, salt lake, c.144,000 sq mi (373,000 sq km), between Europe and Asia; the largest lake in the world. region, the majority of the capital funds will support the continued development of the Kashagan field Kashagan Field is an oil field located in Kazakhstan. The field is situated in the northern part of the Caspian sea close to the Kazakhstan city of Atyrau. The field was discovered in 2000. The field is operated by Eni under the North Caspian Sea Production Sharing Agreement. in the Caspian Sea and the Yuzhno Khylchuyu field in northern Russia. * Within the Asia Pacific region, the majority of the funding will support the continued development of Bohai Bay in China; oil and gas reserves offshore in Block B and onshore South Sumatra South Sumatra or Sumatera Selatan is a province of Indonesia. It is on the island of Sumatra, and borders the provinces of Lampung to the south, Bengkulu to the west, and Jambi to the north. in Indonesia; and fields offshore Malaysia and Vietnam. * Funding in Africa is primarily for the ongoing development of the Waha Concession in Libya and several oil mining leases in Nigeria. * In the Middle East, the company will focus spending primarily on the development of the Qatargas 3 liquefied natural gas liquefied natural gas: see under natural gas. Liquefied natural gas (LNG) A product of natural gas which consists primarily of methane. Its properties are those of liquid methane, slightly modified by minor constituents. facility in Qatar. Refining and Marketing (R&M) The 2007 capital program for R&M is approximately $1.7 billion, with about $1.3 billion of this amount allocated to ConocoPhillips' U.S. businesses. The company has allocated $1.1 billion for U.S. refining, primarily for projects related to sustaining and improving the existing business with a focus on reliability, energy efficiency, capital maintenance and regulatory compliance. Work continues at a number of refineries on projects to increase crude oil capacity, expand conversion capability and increase clean product yield. International R&M is expected to spend about $0.4 billion, with a focus on projects related to reliability, safety and the environment, as well as the advancement of a full-conversion refinery project in Yanbu, Saudi Arabia Saudi Arabia (sä  `dē ərā`bēə, sou`–, sô–), officially Kingdom of Saudi Arabia, kingdom (2005 est. pop. . The company continues to study other international
refinery projects.
The remaining R&M capital budget is for projects in the company's domestic transportation and marketing businesses. Emerging Businesses and Corporate The 2007 capital program for Emerging Businesses and Corporate is approximately $0.4 billion. The majority of the spending is earmarked for power generation, primarily for an expansion project at the company's Immingham Combined Heat and Power plant in the United Kingdom. In Corporate, capital expenditures are expected to be primarily for global information systems and services projects. Energy Resource Development "In addition to the capital budgeted in 2007 for projects that will provide needed energy supplies in the near- and long-term, the company also will increase research and development spending on technology by 50 percent to more than $150 million annually," said Mulva. "Research and development efforts will focus on projects that aid the development of unconventional oil and gas resources, such as Canadian oil sands, as well as the development of new energy sources, such as alternatives and renewables. "The company is committed to diversifying its energy resource development, significantly enhancing the efficiency of energy use, and doing so in a way that addresses climate change and other environmental concerns. ConocoPhillips believes a number of sources of energy are necessary to meet the demands of consumers, including fossil fuels fossil fuel: see energy, sources of; fuel. fossil fuel Any of a class of materials of biologic origin occurring within the Earth's crust that can be used as a source of energy. Fossil fuels include coal, petroleum, and natural gas. , unconventional sources like oil shale oil shale Any fine-grained sedimentary rock that contains solid organic matter (kerogen) and yields significant quantities of oil when heated. This shale oil is a potentially valuable fossil fuel, but the present methods of mining and refining it are expensive, damage the and heavy oil, and alternatives like biofuels. The company intends to become a leader in new energy resource development." Asset Rationalization Program and Company-Owned Retail Outlets retail outlet n → punto de venta retail outlet n → point m de vente retail outlet retail n → "Our asset rationalization program is progressing well," said Mulva. "Consistent with our previously announced expectations, we are on target to achieve proceeds of approximately $3 billion to $4 billion by the end of 2007. "In addition, we are completing a study on how best to market our domestic refinery system's clean products. ConocoPhillips plans to market gasoline, diesel fuel and aviation fuel through approximately 10,000 outlets, the majority of which utilize the Phillips 66, Conoco or 76 brands. However, our company-owned and operated outlets will be divested to existing or new wholesale marketers." Of the approximately 830 retail outlets scheduled for divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). , 330 are company-owned and company-operated. The remaining outlets are operated by dealers. As a result of the adoption of this plan, the company anticipates recording a charge to earnings for a held-for-sale impairment of about $200 million (after tax) in the fourth quarter of 2006. CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This press 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. within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. created thereby. Forward-looking statements relate to future events and anticipated results of operations, business strategies, and other aspects of our operations or operating results. In many cases you can identify forward-looking statements by terminology such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," "objective," "projection," "forecast," "goal," "guidance," "outlook," "effort," "target" and other similar words. However, the absence of these words does not mean that the statements are not forward-looking. Where, in any forward-looking statement, the company expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, there can be no assurance that such expectation or belief will result or be achieved. The actual results of operations can and will be affected by a variety of risks and other matters including, but not limited to, crude oil and natural gas prices; refining and marketing margins; potential failure to achieve, and potential delays in achieving expected reserves or production levels from existing and future oil and gas development projects due to operating hazards, drilling risks, and the inherent uncertainties in interpreting 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; lack of exploration success; potential disruption or unexpected technical difficulties in developing new products and manufacturing processes; potential failure of new products to achieve acceptance in the market; unexpected cost increases or technical difficulties in constructing or modifying company manufacturing or refining facilities; unexpected difficulties in manufacturing, transporting or refining synthetic crude oil; international monetary conditions and exchange controls; potential liability for remedial actions A remedial action is a change made to a nonconforming product or service to address the deficiency. Rework and repair are generally the remedial actions taken on products, while services usually require additional services to be performed to ensure satisfaction. under existing or future environmental regulations; potential liability resulting from pending or future litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; general domestic and international economic and political conditions, as well as changes in tax and other laws applicable to our business. Other factors that could cause actual results to differ materially from those described in the forward-looking statements include other economic, business, competitive and/or regulatory factors affecting our business generally as set forth in our filings with the Securities and Exchange Commission (SEC). Unless legally required, ConocoPhillips undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Cautionary Note to U.S. Investors -- The SEC 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 formation tests to be economically and legally producible under existing economic and operating conditions. Production is distinguished from oil and gas production because SEC regulations define Syncrude as mining-related and not part of conventional oil and natural gas reserves. The company uses certain terms in this release, such as "including Canadian Syncrude," and "resources" that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. investors are urged to consider closely the disclosures in the company's periodic filings with the SEC, available from the company at 600 North Dairy Ashford 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 and the company's Web site at www.conocophillips.com/investor/sec. This information also can be obtained from the SEC by calling 1-800-SEC-0330. |
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