Conoco Phillips

"ConocoPhillips is an international, integrated energy company. It is the third largest integrated energy company in the United States, based on market capitalization, oil and gas proved reserves and production; and the largest refiner in the United States. Worldwide, of non-government controlled companies, ConocoPhillips has the eighth largest total of proved reserves and is the fourth largest refiner in the world. ConocoPhillips is world renowned for its technological expertise in deepwater exploration and production, reservoir management and exploitation, 3-D seismic technology, high-grade petroleum coke upgrading and sulfur removal.

The company has four core activities worldwide: petroleum exploration and production, petroleum refining, marketing, supply, and transportation. The company has investments in natural gas gathering, processing and marketing, and a 30.3 percent interest in Duke Energy Field Services, LLC. In addition, the company has chemicals and plastic production and distribution through a 50 percent interest in Chevron Phillips Chemical Company LLC. Finally, the company is investing in several emerging businesses in fuels technology, gas-to-liquids, power generation, and emerging technologies that provide current and potential future growth opportunities" (ConocoPhillips, 2004)

Product and Services

ConocoPhillips explores for and produces crude oil, natural gas and natural gas liquids on a worldwide basis. Refining and marketing refines crude oil, markets, and transports petroleum products. Products and services provided by ChevronTexaco are the following: additives, aviation, chemicals, fuels, lubricants, marine, power services, specialty products, and technology and energy services.

Midstream consists of ConocoPhillips' 30.3 percent interest in Duke Energy Field Services, (DEFS), as well as certain ConocoPhillips assets in the United States, Canada and Trinidad. Midstream gathers natural gas, extracts and sells the natural gas liquids (NGL) and sells the remaining (residue) gas (ConocoPhillips, 2004). EFS' strengths include assets in major gas-producing regions; efficient, reliable low-cost operations; and critical mass for growth transactions. DEFS' customers are primarily major and independent natural gas producers, local gas distribution companies, electrical utilities, industrial users and marketing companies. Among DEFS' customers for NGL are Chevron Phillips Chemical Company and ConocoPhillips' R&M operations.

ConocoPhillips participates in the chemicals sector through its 50 percent ownership of Chevron Phillips Chemical Company (CPChem), a joint-venture with ChevronTexaco. Headquartered in The Woodlands, Texas, its major product lines include: olefins and polyolefins, including ethylene, polyethylene, normal alpha olefins and plastic pipe; aromatics and styrenics, including styrene, polystyrene, benzene, cyclohexane, paraxylene and K-Resin styrene-butadiene copolymer; and specialty chemicals and plastics (ConocoPhillips, 2004).

CPChem is one of the world's largest producers of ethylene, polyethylene, styrene, alpha olefins, and one of the largest marketers of cyclohexane. CPChem's customers are primarily companies that produce industrial products and consumer goods. ConocoPhillips has four emerging businesses under development: technology solutions, natural gas-to-liquids technology, power generation and emerging technologies. S Zorb is ConocoPhillips' proprietary technology for removing sulfur from gasoline during refining. The technology is proven to reduce sulfur content in fuels to levels well below allowable limits proposed by regulators in the United States and Europe.

The company's new gas-to-liquids technology has the potential to convert stranded natural gas reserves in remote locations to liquids that can be economically transported to market (ConocoPhillips, 2004). ConocoPhillips is using creativity and innovation to access new high-growth markets for natural gas and electricity. By integrating power generation with ConocoPhillips' upstream and downstream businesses, the company is able to structure power projects - such as cogeneration - to provide maximum value for both ConocoPhillips and its customers.

Basis Company Information

From their beginnings in the early days of the oil industry, Conoco Inc. and Phillips Petroleum Company grew and prospered, becoming leaders in the global energy industry. On August 30, 2002, they combined their complementary strengths and shared values to create ConocoPhillips. Headquartered in Houston, Texas, ConocoPhillips operates in more than 40 countries (ConocoPhillips, 2004). The company has approximately 37,200 employees worldwide and assets of $84 billion. ConocoPhillips stock is listed on the New York Stock Exchange under the symbol "COP." ConocoPhillips last trade price on June 14, 2004 was $74.51. Its current day's high was 75.05 and low was 74.28 with a volume of 418,400 shares.

Financial Data

The company publishes four major financial statements are part of its annual report: consolidated income statement, consolidated balance sheet, consolidated statement of cash flows, and a consolidated statement of changes in common stockholders' equity. ConocoPhillips includes twenty-nine notes to the consolidated financial statements. The following is the first five notes listed in number order and appearance in the report. They are accounting policies, changes in accounting principles, the merger of Conoco and Phillips, discontinued operations, and restructuring.

Dividends paid by ConocoPhillips are a combination of the merger of the two companies and pre-merger activity of each company. The combined company paid dividends of $0.40 per share in the first three quarters of fiscal year 2003 and $0.43 per share in the fourth quarter of that year. The fourth quarter of 2002 was the first dividends paid by the combined company, $0.40. Before the merger, Conoco paid quarterly dividends on $0.19 per share in the first three quarters of 2002 and on a quarterly basis during 2001. Phillips Petroleum paid dividends of $0.67 per share in the first three quarters of 2002 and on a quarterly basis during 2001.

Stock Market

ConocoPhillips has three types of stock. The company issues common and preferred stocks and hold treasury stocks. Compensation and Benefits Trust (CBT) holds the company's treasury stock of 25,085,314. "The CBT is an irrevocable grantor trust, administered by an independent trustee and designated to acquire, hold, and distribute shares of our common stock to fund future compensation and benefit obligations of the company" (ConocoPhillips, 2004). For the year ending December 31, 2003, the combined company had 682,800,000 common shares outstanding. In 2003, ConocoPhillips issued $75.9 million of tax-exempt bonds.

References Retrieved June 10, 2004.