Creating Two Leading Energy CompaniesAnalyst Meeting

July 14, 2011

FOR THE PURPOSES OF THE “SAFE HARBOR” PROVISIONS

Cautionary StatementFOR THE PURPOSES OF THE  SAFE HARBOR  PROVISIONSOF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 

The following presentation includes forward‐looking statements These statements relate to future eventsThe following presentation includes forward looking statements. These statements relate to future events,such as anticipated revenues, earnings, business strategies, competitive position or other aspects of ouroperations or operating results. Actual outcomes and results may differ materially from what is expressed orforecast in such forward‐looking statements. These statements are not guarantees of future performance andinvolve certain risks, uncertainties and assumptions that are difficult to predict such as oil and gas prices;involve certain risks, uncertainties and assumptions that are difficult to predict such as oil and gas prices;refining and marketing margins; operational hazards and drilling risks; potential failure to achieve, andpotential delays in achieving expected reserves or production levels from existing and future oil and gasdevelopment projects; unsuccessful exploratory activities; unexpected cost increases or technical difficultiesin constructing, maintaining or modifying company facilities; international monetary conditions and exchangeg, g y g p y ; y gcontrols; potential liability for remedial actions under existing or future environmental regulations or frompending or future litigation; limited access to capital or significantly higher cost of capital related to illiquidityor uncertainty in the domestic or international financial markets; general domestic and internationaleconomic and political conditions, as well as changes in tax, environmental and other laws applicable top , g , ppConocoPhillips’ business and other economic, business, competitive and/or regulatory factors affectingConocoPhillips’ business generally as set forth in ConocoPhillips’ filings with the Securities and ExchangeCommission (SEC).

1

Historical Strategy

iKey Premises

• Integration creates value 

• Scale and scope needed to compete p p

• Growth in hydrocarbon demand

• Resource capture will be more difficult and expensive

Execution

• Positioned each business line to compete effectively• Positioned each business line to compete effectively

– E&P, R&M, Midstream and Chemicals

• Quality assets – but portfolio optimization needed 

• M&A integration and cost synergies captured

L d i ifi l i

2

Led to significant value creation

Current Focus

Cash from Operations

ROCE improvement16%

Margin enhancement84%

OECD

$92 B Capital EmployedPer share growth

Non‐OECD

Shareholder distributions9%

25%E&P

66%R&M

Other

3

Increasing shareholder value  2010 cash from operations and average capital employed.  Corporate capital employed distributed across segments.

Current Strategic Objectives

Improve ROCE• Expand margins per BOE

i i i l di i li• Maintain capital discipline• Portfolio optimization

Grow per share• Reserves and production• Earnings and cash flowEarnings and cash flow

Increase distributions• Annual dividend increases• Share repurchases

4

Creating shareholder value

Key 2011 / 2012 Initiatives

Disciplined $28 B capital program

Additional $5‐10 B in asset sales

$10+ B in share repurchases

100%+ reserve replacement100%+ reserve replacement 

Reduce refining capacity

5

Improve ROCE  

Strategy AssessmentInte rated Strate has been effe ti eIntegrated Strategy has been effective

• Increased reserves and production

• Generated competitive shareholder returns• Generated competitive shareholder returns

Environment has changed

• Downstream capability not key to resource accessDownstream capability not key to resource access

• Resource Nationalism and NOC competition

• Movement to “service” agreements

Value of IOC assets not reflected in equity value

• Transparency and potential of businesses not as clear as pure plays 

• Increasingly difficult to create differential value to larger Integrateds

• Emphasis on additional volumes not always value creating

6

Continually testing and assessing execution of strategy

Transaction Summary

Pursuing tax free spin of Downstream business 

New independent pure‐play publicly‐held Downstream company

ConocoPhillips becomes leading pure‐play E&P companyp g p p y p y

Expect transaction completion in first half 2012

C t t t i d d t i

7

Creates two strong independent companies

Strategic RationaleCreate two profitable and independent companies

• E&P Strategy unchanged

D i i dd l h h f li i i i• Downstream given opportunity to add value through portfolio optimization

Greatest opportunity to create differential value

• Independent but consistent strategiesIndependent but consistent strategies

• Both companies continue to benefit from size and scale

• Both companies to have strong financial flexibilityBoth companies to have strong financial flexibility

• Transparency of pure play over integrated business model

• Management focusg

• Ability to attract and retain talent 

8

New ConocoPhillips Description

Largest U.S. pure‐play E&P company

• 1.7 MM BOED 2011 production

• 8 5 B BOE reserves / 43 B BOE captured resource• 8.5 B BOE reserves / 43 B BOE captured resource

• Strong OECD position

Financial and technical capability on par with I U Pilarger integrated majors 

No change in upstream strategy

• Improve ROCE

Insert Upstream Picture

• Improve ROCE

• Per share growth in production and reserves

• Complete portfolio strengthening

• Capital discipline 

• Competitive F&D

• Improve margins per BOE

9

Improve margins per BOE

Asset disposition and share repurchase plans unchanged

E&P Overview

North Sea350 MBOED

High value exploitation& major projects

Alaska240 MBOEDLargest oil & gas 

producer

Russia / Caspian50 MBOED

Large resource potential

Lower 48440 MBOED

Canada270 MBOEDWorld class SAGD1

portfolio & new

Asia Pacific280 MBOED

Diverse & expanding440 MBOEDCompetitive 

opportunity set

portfolio & new resource plays

Diverse & expanding legacy position

Total 2010 Production1 75 MMBOED Middle East & Africa1.75 MMBOED~80% OECD

2011 Exploration & appraisal activity

Middle East & Africa120 MBOED

Oil producing base assets with LNG growth

10

International growth opportunities underpinned by OECD position 1 Steam Assisted Gravity Drainage

ConocoPhillips Production

4.8

Q1 2011 Worldwide Production ‐MMBD

3.53.6

Peer Group

Domestic Integrated

Domestic Pure Plays

2.8

1.7

2.4

0.7 0.7 0.7 0.60.4 0.4 0.4

0.2

XOM BP RDS

CVX

TOT

COP

Apac

he OXY

Anad

arko

Devo

nEO

G Re

sour

ces

Mar

athon

Hess

Murp

hy O

il

11

Source: Company reports

Production Outlook

Production by Product ‐MMBOED

2.5Liquids LNG Int'l gas N America gas

Sources of Growth

Asia Pacific

2.0• APLNG, Malaysia, Indonesia

North Sea• J i Cl i Ek fi k Eldfi k

1 0

1.5• Jasmine, Clair, Ekofisk, Eldfisk

Caspian• Kashagan

0.5

1.0

L48 liquids• Eagle Ford, Bakken, Barnett, Permian

0.0

2010 2015E

Canada SAGD• FCCL, Surmont

12

Excludes impact of future dispositions.

Strong portfolio of investments leads to production growth

2011‐2015 New Production

MBOED

800Rest of World Various

Asset / Region 2010 Cash Margins

600Other L48 &              W Canada

N th S $29 / BOE

$14 ‐ $40 / BOE

400

North Sea

SAGD

L48 liquids growth $31 / BOE

$30 / BOE

$29 / BOE

200Asia Pacific $35 / BOE

0

2010 2011E 2012E 2013E 2014E 2015E

Qatargas 3 Attractive

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Improving margins through major projects and exploitation

New Downstream Company

Global Refining & Marketing leader

• 2.4 MM BPD worldwide refining capacity

• Low cost, integrated Marketing and Transportation

• 2 MM BPD domestic capacity 

– Significant position in mid‐continent

– Exposure to all PADDs I D Pi

Strong investment grade credit with significant financial flexibility 

Strategy focused on value creation

Insert Downstream Picture

• Improve ROCE to mid‐teens

• Sell or joint venture less competitive assets

• Disciplined reinvestment of free cash flowLT Assetsp

• Competitive shareholder distributions

• Earnings and cash flow growth potential

• Operating excellence

14

Operating excellence

U.S. Refining 

2 0

2.2

Q1 2011 U.S. Refining Capacity ‐MMBD

Peer Group

1.5

1.92.0

Domestic Integrated

Domestic Pure Plays

0.80.7

0.9

1.1

0.50.4

0.2 0.2

Valero COP XOM BP Marathon CVX RDS Tesoro Sunoco HOC/FTO TOT Murphy

Leading domestic refining company with portfolio of top quartile assets

15

Leading domestic refining company with portfolio of top quartile assets

Source: Company reports

Downstream ROCE Improvement

Selective asset sales

Finalization of Wood River CORE projectFinalization of Wood River CORE project

Capital discipline

• Implementing selective high return projects

Optimization initiatives

• Increase utilization and clean product yield

• Lower cost structure• Lower cost structure

• Capture feedstock advantage

16

Generate mid‐teens returns and free cash flow

Key Milestones

Detailed separation planning followed by IRS tax ruling request

Announcement of new board and leadership teamsAnnouncement of new board and leadership teams

Favorable IRS ruling

Final COP Board approval

Expected closing first half of 2012Expected closing first half of 2012

17

Delivering Shareholder Value

100%+ reserves replacementp

Production per share growth

Continued asset sales

Strong OECD‐based cash flow

Improved returns

EPS/CFPS growth

Enhanced queue of growth projects

Disciplined capital investment/ g

Increased distributionsStrengthened portfolio

18

Restructuring consistent with commitment to shareholder returns