ConocoPhillips Merger Completed

ConocoPhillips has completed the merger of Conoco Inc. and Phillips Petroleum Company, following clearance by the U.S. Federal Trade Commission earlier today. Shareholders of both companies and all U.S. and foreign regulatory authorities cleared the merger earlier this year.
ConocoPhillips is the third-largest integrated U.S. energy company. On a global basis, it is the sixth largest publicly held energy company based on hydrocarbon reserves and production, and it is the fifth-largest global refiner.
ConocoPhillips has net proved reserves of 8.7 billion barrels of oil equivalent (BOE), daily oil and natural gas production of 1.7 million BOE, and a refining capacity of 2.6 million barrels per day, and has assets of $75 billion.
"Today marks the creation of a new international integrated major energy company, with the assets, talent, financial strength and technology needed to achieve superior results for all stakeholders," said Jim Mulva, president and chief executive officer of ConocoPhillips. "We possess a diversified global portfolio of legacy assets and growth projects, as well as a commitment to financial discipline and operating excellence. Delivering on our portfolio of organic opportunities, together with highgrading our investments and capturing synergies, will provide a high-quality earnings base that will drive shareholder value."
Each share of Phillips common stock has been converted into one share of ConocoPhillips common stock, and each share of Conoco common stock has been converted into 0.4677 of a share of ConocoPhillips common stock.
Information regarding exchange of share certificates will be sent to former Phillips and Conoco shareholders as soon as practicable. Beginning September 3, ConocoPhillips' stock will be listed on the New York Stock Exchange under the symbol "COP".
"ConocoPhillips combines two successful energy industry pioneers into a global energy company that is focused on providing safe, clean and sustainable energy for the world and exceptional value for our shareholders," said Archie W. Dunham, chairman of the board of ConocoPhillips. "With skilled and dedicated employees, a strong balance sheet, upstream investment opportunities, and greater operational efficiency, ConocoPhillips is a tough new major competitor in the international petroleum industry."
ConocoPhillips is a major international integrated energy company with operations in some 49 countries. Headquartered in Houston, the company has assets of $75 billion, net proved reserves of 8.7 billion barrels of oil equivalent (BOE), and daily production of 1.7 million BOE.


Phillips Shareholders Approve Merger with Conoco

The shareholders of Phillips Petroleum Company [NYSE:P] voted to approve the proposed merger of equals with Conoco [NYSE:COC] during a special meeting held here today.

The merger was approved by a significant majority of all shares, with an overwhelming amount of shares voted. Based on preliminary results, out of the 328 million shares voted, approximately 97 percent were voted in favor of the merger. The merger is expected to be completed in the second half of this year, pending expiration of the waiting period under the U.S. Hart-Scott-Rodino Act and other customary closing conditions.

gTodayfs vote is an important step in combining Phillips and Conoco, and we appreciate the support from our shareholders,h said Jim Mulva, chairman and chief executive officer. gWe believe the combination of these two companies will create significant value for all stakeholders and provide excellent financial and operational growth opportunities.h

The combined company, to be called ConocoPhillips, is expected to achieve annual recurring cost savings of at least $750 million within the first full year after the completion of the merger.

Mulva will serve as president and chief executive officer of ConocoPhillips, while Archie W. Dunham, currently chairman and CEO of Conoco, will serve as chairman. The new company will be headquartered in Houston.


Conoco and Phillips Agree to Merger of Equals
@@@$35 Billion Strategic Combination Creates Third-Largest Integrated U.S. Energy Company

Conoco Inc. and Phillips Petroleum Company today announced that their boards of directors have unanimously approved a merger of equals, and that the companies have signed a definitive merger agreement. The new company, which will be named ConocoPhillips, will be a strong competitor with enhanced returns and accelerated growth opportunities from an excellent financial and operational position.

ConocoPhillips will be the third-largest integrated U.S. energy company based on market capitalization and oil and gas reserves and production. Worldwide, it will be the sixth-largest energy company based on hydrocarbon reserves and the fifth-largest global refiner.

As a premier global major, ConocoPhillips will have the size, portfolio of high-quality assets, and the capabilities and financial strength to generate enhanced value for its shareholders. Specifically, ConocoPhillips will have:
Esubstantial growth opportunities;
Eworld-class technology, workforce and operational practices;
Esignificant opportunity to enhance its exploration portfolio;
Ediversified earnings and cash flow;
Ea strong balance sheet, with an expected debt-to-capitalization ratio of approximately 35 percent;
Eimproved capital efficiency; and
Ean efficient cost structure.

Under the terms of the agreement, Phillips shareholders will receive one share of new ConocoPhillips common stock for each share of Phillips they own and Conoco shareholders will receive 0.4677 shares of new ConocoPhillips common stock for each share of Conoco they own. Based on the closing market prices for the shares of both companies on Friday, Nov. 16, 2001, and their debt levels as of Sept. 30, 2001, the new company would have an enterprise value of $53.5 billion ($34.9 billion of equity;
@$18.6 billion of debt and preferred securities). At inception, Phillips shareholders will own about 56.6 percent and Conoco shareholders will own about 43.4 percent of the new company. The transaction is structured to be tax-free to the shareholders of each company.

The transaction is expected to be accretive to earnings and cash flow per share of each company after achieving anticipated annual cost savings of approximately $750 million. The companies expect to achieve the annual rate of synergies within the first year after closing.

Upon completion of the merger, Archie W. Dunham, Conoco chairman and chief executive officer, will serve as chairman of ConocoPhillips and will delay his scheduled retirement to 2004. James J. Mulva, Phillips chairman and chief executive officer, will be president and chief executive officer of the combined company, and also become chairman upon Mr. Dunham
fs retirement. The ConocoPhillips board of directors will consist of 16 directors, eight designated by each of the two companies, including

Mr. Dunham and Mr. Mulva. ConocoPhillips will be headquartered in Houston, with a significant and continuing presence in Bartlesville and Oklahoma.

Mr. Dunham of Conoco said,
gThis merger of equals represents an excellent strategic fit for both Conoco and Phillips. It will position ConocoPhillips as a stronger U.S.-based, global energy producer by significantly enhancing its capability and growth prospects on five continents in both current and prospective ventures, while generating major synergies. It will create significant long-term value for the shareholders of both companies, partly through cost savings, but also because of a significantly larger portfolio of global assets, skills and opportunities. With a very strong balance sheet, more capital for upstream investment, and greater operational efficiency downstream, ConocoPhillips will be a tough new competitor to the larger global majors.h

Mr. Mulva of Phillips said, gThis merger ensures that the United States will be home to a third major international petroleum company. For Conoco and Phillips, joining forces is the ideal way to be competitive in the reshaped energy industry. ConocoPhillips will move forward to deliver on our legacy growth projects, develop new opportunities in existing and emerging business lines, and enhance returns in our downstream business with our companiesf leading technologies. With our greater financial strength and flexibility, we will be able to fund these capital programs while also reducing our debt-to-capitalization ratio, repurchasing shares and providing a competitive dividend. Just as important, our compatible cultures, similar values and determined focus will facilitate a smooth integration and enable ConocoPhillips to get off to a fast and successful start.h

Mr. Mulva added, gI want to emphasize that, reflecting our companiesf deep roots in Oklahoma, ConocoPhillips will continue to have a significant operational presence here. ConocoPhillips intends to continue the philanthropic and community commitments of Conoco and Phillips. In addition, ConocoPhillips will initiate technology or other partnership commitments with the University of Oklahoma and Oklahoma State University.h

Superior Growth and Strong Core Capabilities
In the upstream segment, ConocoPhillips
f global scale and presence will allow for increased efficiency in core areas and delivery of legacy growth projects. The combined company will have pro forma year 2000 hydrocarbon reserves of 8.7 billion barrels of oil equivalent (BOE) and daily production of 1.7 million BOE, based on the companiesf estimates for 2001 year-end production. ConocoPhillips will have numerous legacy asset positions, including those in Alaska, Canada, the Lower 48, the North Sea, Venezuela, China, the Timor Sea, Indonesia, Vietnam, the Middle East, Russia and the Caspian area.

In the refining and marketing segment, ConocoPhillips will operate or have equity interests in 19 refineries in the United States, the U.K., Ireland, Germany, the Czech Republic and Malaysia, with a refining capacity of 2.6 million barrels a day. It will also have a strong marketing presence in the United States.

In addition, ConocoPhillips will continue Phillips
f equity participation in the natural gas gathering and processing joint venture, Duke Energy Field Service, and in the chemicals and plastics joint venture, Chevron Phillips Chemicals.

Substantial Return Enhancements and Value Creation
The companies expect the combined enterprise to achieve annual cost savings of at least $750 million within the first full year after closing. These savings will result from more efficient exploration, production and downstream activities, and the elimination of duplicate corporate and administrative positions, programs and operating offices. A transition team led by Philip L. Frederickson, Conoco
fs Senior Vice President Corporate Strategy and Business Development, and John E. Lowe, Phillipsf Senior Vice President, Corporate Strategy and Development, will begin work immediately to ensure integration occurs quickly and smoothl

It is anticipated that upon closing of the transaction, the ConocoPhillips board of directors will adopt a competitive dividend policy. Currently, Conoco pays an annual dividend of $0.76 per share and Phillips pays an annual dividend of $1.44 per share.

The merger is conditioned upon, among other things, the approvals of the shareholders of each company and customary regulatory approvals. The transaction is expected to be completed in the second half of 2002.

Morgan Stanley, Credit Suisse First Boston and Salomon Smith Barney acted as financial advisors and Cravath, Swaine & Moore acted as legal counsel to Conoco. Goldman, Sachs & Co., J.P. Morgan Securities Inc. and Merrill Lynch & Co. acted as financial advisors and Wachtell, Lipton, Rosen & Katz acted as legal counsel to Phillips.

Conoco Inc. is an integrated, international energy company with operations in more than 40 countries. Headquartered in Houston, Texas, the company had 20,000 employees and $27.7 billion in assets at Sept. 30, 2001.

Phillips Petroleum Company is an integrated petroleum company with interests around the world. Headquartered in Bartlesville, Oklahoma, the company had 38,500 employees and $35.4 billion of assets at Sept. 30, 2001.

Houston (Platts)--1Oct2002

Basell USA, ConocoPhillips sign PP marketing agreement

Basell USA Inc and ConocoPhillips announced Tuesday the signing of an agreement under which Basell will be the exclusive purchaser and marketer of the polypropylene resins produced at ConocoPhillips' new Bayway plant in Linden, NJ The 775-mil lb/yr plant is scheduled to start up early next year. "We are pleased to be joining forces with Basell, an acknowledged worldwide leader in the production and sales of polypropylene, to get Bayway's new polypropylene capacity into the marketplace," said Tom Nimbley, ConocoPhillips' president of downstream refining. Basell, a 50/50 joint venture of BASF and Royal Dutch/Shell, is the world's largest producer and marketer of polypropylene. The addition of the Bayway plant capacity will increase the polypropylene capacity Basell sells in North America to more than 4-bil lb/yr.