ConocoPhillips Continues Focus on Returns, Growth, Debt Reduction; Meeting With Security Analysts Updates Progress on Strategy Execution.

Energy Editors/Business Editors

HOUSTON--(BUSINESS WIRE)--Nov. 19, 2003

ConocoPhillips (NYSE:COP) today presented the company's strategic plans at a meeting in New York with security analysts.

ConocoPhillips President and Chief Executive Officer Jim Mulva outlined the continuation of the company's returns-focused strategy. Mulva described several actions that will continue to enhance performance over the next year, including:

-- Continued capital discipline at a cash spending level of

approximately $6 billion in 2004 (before capitalized interest 

and minority interest spending);

-- An increase in the asset disposition target by about $1

billion, to $4.5 billion; and

-- An increase in the post-merger annual cost-saving target to

$1.75 billion from the $1.25 billion target announced last

year, which itself was an increase from $750 million announced

in conjunction with the merger and formation of

ConocoPhillips.

Mulva explained that these actions, together with execution of the company's operating plans, will help improve the company's debt-to-capital ratio to 33 percent in 2004 and 32 percent in 2005, notwithstanding increases in reported overall debt levels as a result of recent accounting changes. "We continue to use a disciplined approach to improve return on capital employed, strengthen our balance sheet, and generate profitable, long-term growth," said Mulva. "These actions should result in higher shareholder returns."

Mulva outlined the progress made since the ConocoPhillips merger last year that has enabled a significant improvement in return on capital employed (ROCE). He also reiterated plans to increase returns to be more competitive with the largest companies in the industry. "We are closing the ROCE gap through synergy capture, business improvements, and better, long-term returns from our growth projects," he said. "By successfully executing our plans this year, we are confident in increasing our objectives for 2004 in regards to debt reduction, synergy capture and asset sales. These more aggressive targets will strengthen our company's financial position and build momentum for the future."

The company reported that it generated 16.6 percent in adjusted ROCE through the first three quarters of 2003. In addition, mid-cycle ROCE was improved by approximately two percentage points to 9.1 percent. The mid-cycle ROCE target of 11-14 percent remains unchanged, as are plans to continue to reduce debt and strengthen the balance sheet.

Mulva reaffirmed the company's plan to grow the Exploration and Production segment of its business to 65 percent of capital employed, compared to its current level of around 60 percent. ConocoPhillips plans to grow production and improve long-term returns by optimizing its current asset base, developing legacy projects and continuing to secure new major reserves positions. In the Refining and Marketing segment, ConocoPhillips will work to improve returns through operating reliably, reducing operating costs and optimizing throughout its large, integrated system. Plans for contributions from the company's Commercial operations, Midstream, Chemicals and Emerging Businesses also were provided.

"We have strong, technological capabilities, and more importantly, we have the talent and commitment of an exceptional group of women and men in our new company," said Mulva. "They have built a returns-focused culture, and they will elevate us to the next level of improved returns as we continue to operate safely, reliably and responsibly. It is their spirit that will enable us to succeed."

More information, including a strategy overview and recorded webcast of the presentation to analysts, is available at www.conocophillips.com/investor.

ConocoPhillips is an integrated petroleum company with interests around the world. Headquartered in Houston, the company had approximately 54,800 employees, $82 billion of assets, and $106 billion of annualized revenues as of Sept. 30, 2003. For more information, go to www.conocophillips.com.

NON-GAAP RECONCILIATIONS

ConocoPhillips' September 2003 year-to-date ROCE on a GAAP basis is 10.3 percent, calculated by annualizing the sum of net income from continuing operations of $3,607 million plus after-tax interest expense and minority interest ($431 million), and dividing by average capital employed of $52,407 million. Adjusting for the impacts of purchase accounting (adding back to income $93 million of depreciation expense related to stepping up the basis of the Alaskan assets acquired from Arco, and subtracting $19,125 million from capital employed, consisting of the step-up in basis of the Alaskan assets, and the goodwill and intangibles associated with the acquisition of Tosco and the merger of Conoco and Phillips), annualized ROCE is 16.6 percent. When ROCE on a purchase accounting basis is further adjusted for mid-cycle prices (reduces income from continuing operations by $2,326 million) and adjusted for direct synergy capture (increases income by $478 million), annualized adjusted ROCE is 9.1 percent. Tables detailing these reconciliations are included in the appendix of the analyst meeting presentations posted on the ConocoPhillips Web site.

CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This 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 company's operations and business plans. 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, changes in crude oil and natural gas prices; unsuccessful exploratory and development drilling; failure to achieve expected reserve or production levels for existing and future projects due to operating hazards, drilling risks, and the inherent engineering uncertainties in estimating oil and gas reserves; difficulties or cost-overruns in constructing production facilities; potential disruption or interruption of the company's facilities and operations due to accidents or political events; and general domestic and international economic and political conditions. Other factors that could cause actual results to differ materially from those described in the forward-looking statements are economic, business and regulatory factors affecting ConocoPhillips' business generally as set forth in ConocoPhillips' filings with the SEC, including its Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2003, and its current reports on Form 8-K. ConocoPhillips 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.