News Release from ConocoPhillips
23 February 2004
ConocoPhillips Replaces 106 Percent of 2003 Production
Production replacement of 133 percent, excluding sales and acquisitions
HOUSTON, Feb. 23, 2004 --- ConocoPhillips [NYSE: COP] today announced the net addition of 650 million barrels of oil equivalent (BOE) to its proved reserve base during 2003. The company replaced 106 percent of its 2003 production or 133 percent excluding sales and acquisitions, bringing ConocoPhillips’ total reserve base to 7.8 billion BOE, excluding 0.3 billion barrels associated with the company’s Canadian Syncrude operation. The U.S. Securities and Exchange Commission regulations define the company’s Syncrude operation as mining related; therefore, these operations are not reported as part of its conventional oil and gas proved reserves base.
Including sales and acquisitions, the company achieved a production replacement of 106 percent, at a finding and development (F&D) cost of $5.35 per BOE in 2003. F&D costs include approximately $430 million of 2003 additions to properties, plants and equipment associated with the repeal of the Norway Grant Act. ConocoPhillips’ five-year average production replacement for the period 1999 through 2003 was 414 percent at an average F&D cost of $4.29 per BOE. ConocoPhillips’ reserves-to-production ratio is 12.6 years.
“ConocoPhillips had a very successful 2003, in terms of project approvals,” said Bill Berry, executive vice president of Exploration and Production for ConocoPhillips. “Our focused efforts to progress our legacy projects toward development resulted in major increases in proved reserves, primarily from projects in Australia, Canada and Norway.
“Looking ahead, we anticipate our current pipeline of projects to provide the company with substantial future reserves growth. In 2004, we will continue to pursue government approval on our Kashagan project in Kazakhstan, as well as the authorization of major projects in the United Kingdom, China and Alaska.”
Pro Forma Operating Information
To provide meaningful, prior-period comparisons, the company is providing the following pro forma operating information. This pro forma information was prepared by combining the historical results of Conoco and Phillips for all reporting periods presented prior to the merger and those of ConocoPhillips since the merger.
ConocoPhillips’ pro forma five-year average production replacement would be 210 percent of its production from 1999 through 2003 at an average estimated F&D cost of $5.12* per BOE.
ConocoPhillips’ proved reserves are reviewed annually to ensure that all reserve determinations are made in accordance with a disciplined internal policy. This policy requires the financial commitment to proceed with development of such reserves and any appropriate government and partner approvals before reserves are booked.
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 http://www.conocophillips.com/.
|Cost Incurred**||Reserve Additions***|
|Billions of dollars||Billions of BOE|
|Conoco pre-merger, net of|
|Pro forma costs incurred and|
(GAAP 5-year average)
(pro forma 5-year average)
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