This summary is based on the second quarter fiscal 2008 earnings call conducted by ConocoPhillips Inc. (COP: chart) on July 23, 2008.

Management:

- Chairman and CEO: Jim Mulva
- EVP of Finance and CFO: John Carrig
- GM of IR: Gary Russell

Key Investors Issues

- Income was $5.4 billion or $3.50 per share up 17 times from $301 million or 18 cents a share in 2007.
- Revenues increased 49% to $73 billion from $49 billion in 2007 on firming prices.
- Capital programs included $719 million of dividends and $2.5 billion in share repurchase.

Half Year Highlights:

- Revenues increased to $129 billion from $92 billion in 2007.
- Total cash available was $13.6 billion, with 88% or $12 billion coming from operations.
- The firm repurchased $5 billion of stock and paid $1.4 billion in dividends.

Second Quarter Highlights

Income was $5.4 billion or $3.50 per share up 17 times from $301 million or 18 cents a share in the prior year as prices margin and other impacts improved income.

- Income was also impacted by net sales volumes in the LUKOIL and E&P segments harshly offset by higher volumes in the downstream and midstream segments.
- Revenues increased 49% to $73 billion from $49 billion in 2007 on firming prices.
- The firm generated $5.4 billion in cash from operations and the debt-to-cap ratio is 19%.
- Conoco purchased 2.5 billion of its stock reducing average shares outstanding to 1.555 billion shares.
- As a result of the current price environment, production taxes were $264 million higher than the last quarter and most of this relates to Alaska.
- Of the $6.9 billion of cash available, funds were used to fund $3.6 billion of capital programs, $719 million of dividends and $2.5 billion in share repurchase.

Segment Highlights:

- Exploration and Production (E&P): net income was $4 billion, up from a net loss of $2.4 billion in 2007 due to higher commodity prices, partially offset by higher production taxes and increased operating costs.
- Daily production from the E&P segment, including Canadian Syncrude, averaged 1.75 million barrels of oil equivalent (BOE) per day, a decrease from 1.91 million BOE per day in 2007.
- The decrease was primarily due to the expropriation of the company’s Venezuelan oil projects, as well as normal field decline.
- This decrease was partially offset by production from new developments, mainly in Indonesia, Norway, the United Kingdom, the U.S. Lower 48 and Canada.

- Midstream: net income was $162 million, up from $102 million in the second quarter of 2007 due to higher realized natural gas liquids prices.

- Refining and Marketing (R&M) net income was $664 million, down from $2.4 billion in 2007 due to significantly lower U.S. refining and marketing margins.
- Results were also impacted by a lower net benefit from the company’s asset rationalization efforts, and higher turnaround and utility costs.
- The domestic refining crude oil capacity utilization rate was 94%, up 4% from the prior period due to improved refining operations in the U.S. Gulf Coast.
- The international crude oil capacity utilization rate was 88%, up from 86% in the previous quarter.

However, weak hydro-skimming margins continued to impact crude oil capacity utilization at ConocoPhillip’s Wilhelmshaven, Germany, refinery.

- Worldwide, R&M’s refining crude oil capacity utilization rate was 93%, up from 89% the previous quarter and the same as the second quarter of 2007.
- Before-tax turnaround costs were $170 million, up from $58 million in 2007.

- LUKOIL Investment: net income was $774 million, up from $526 million in 2007, inclusive of ConocoPhillip’s estimate of its equity share of OAO.
- The increase in net income was primarily due to higher estimated realized prices, partially offset by higher estimated taxes and operating costs, as well as the net impact from the alignment of estimated net income to LUKOIL’s reported results.
- ConocoPhillips estimated its equity share of LUKOIL production was 448,000 BOE per day and its share of LUKOIL daily refining crude oil throughput was 215,000 barrels per day (BPD) during the period.

- Chemicals: net income was $18 million down from $68 million in the prior year due to lower benzene and polyethylene margins as the result of significant increases in feedstock costs, as well as higher utility and turnaround costs.
- This decrease was partially offset by an asset retirement recorded in the second quarter of 2007.

- Emerging Businesses: net income was $8 million, up from a net loss of $12 million in 2007.
- The increase was primarily due to higher international power generation results.

Major Deals:

- The firm recently signed interim agreement with Abu Dhabi National Oil Company to develop the Shah gas field in Abu Dhabi.
- In the Middle East, Conoco approved the continued funding, moving forward for the development of the Yanbu Export Refinery project with Saudi Aramco.
- The company recently signed a MoU with Petrobras, and with this agreement hopes to sort through opportunities to work together in the core businesses, upstream and downstream, as well as energy opportunities such as ethanol in Brazil.
- In North America, the joint venture with TransCanada, it plans to expand the Keystone crude oil pipeline system, providing additional capacity of 500,000 barrels per day from Western Canada to the U.S. Gulf Coast.

Third Quarter Outlook: