Fitch Places Conoco Inc. On Rating Watch Positive.Business Editors CHICAGO--(BUSINESS WIRE)--Nov. 19, 2001 Fitch has placed the debt ratings of Conoco Inc. (Conoco) on Rating Watch Positive following the announcement that it has signed a definitive agreement to merge with Phillips Petroleum Company Phillips Petroleum Company was founded in 1917 by L.E. Phillips and Frank Phillips, of Bartlesville, Oklahoma. Their younger brother, Waite Phillips was the benefactor of Philmont Scout Ranch. Phillips Petroleum was headquartered in Bartlesville, Oklahoma. (Phillips). Currently, Fitch rates Conoco's unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. `BBB BBB A medium grade assigned to a debt obligation by a rating agency to indicate an adequate ability to pay interest and repay principal. However, adverse developments are more likely to impair this ability than would be the case for bonds rated A and above. +', and its commercial paper `F2'. The Rating Watch affects approximately $9.6 billion in rated securities. Yesterday, Conoco and Phillips announced that they will merge creating the third largest vertically integrated energy company in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and the sixth largest in the world in terms of reserves and production. Downstream, the combined company will be the fifth-largest global refiner. The combined company, called ConocoPhillips, will have pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma year 2000 hydrocarbon reserves of 8.7 billion barrels of oil equivalent (BOE BOE Based on Experience BOE Board of Education BOE BoletÃn Oficial del Estado (Spanish) BOE Bank of England BOE Board of Equalization BOE Board of Elections BOE Barrel of Oil Equivalent BOE Bind on Equip ) and daily production of 1.7 million BOE, based on the companies' estimates for 2001 year-end production. In the exploration and production segment, ConocoPhillips will have numerous legacy asset positions, including those in Alaska, Canada, the Lower 48, the North Sea, Venezuela, China, the Timor Sea Timor Sea An arm of the Indian Ocean between Timor and Australia. Noun 1. Timor Sea - an arm of the eastern Indian Ocean between Timor and northern Australia , Indonesia, Vietnam, the Middle East, Russia, and the Caspian area. Over 70% of the new company's production will be in stable political environments such as North America and the North Sea. In the refining and marketing segment, ConocoPhillips will operate or have equity interests in 19 refineries worldwide with a capacity of 2.6 million barrels a day and it will also have a strong marketing presence in the United States. Fitch views the merger announcement as a positive from both an operational and financial standpoint. For example, Conoco's large North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. natural gas position will help balance Phillips' leverage to crude oil prices and Phillips' larger downstream operations will further balance the combined entity's exposure to upstream price volatility. Additionally, the company expects to achieve $750 million in synergies annually. Financially, the new company will have an adjusted debt-to-capital in the mid-40% range. Upon closing of the merger, Fitch will likely upgrade Conoco's senior unsecured rating at least one notch to `A-`. The closing of the transaction is expected in the second half of 2002 and is subject to customary shareholder and regulatory approvals. Conoco Inc. is a major integrated energy company active in more than 40 countries worldwide. |
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