1163165--2/27/2006--CONOCOPHILLIPS

related topics

{gas, price, oil}

{cost, regulation, environmental}

{acquisition, growth, future}

{operation, natural, condition}

{stock, price, operating}

{tax, income, asset}

{financial, litigation, operation}

{investment, property, distribution}

{condition, economic, financial}

Exploration and Production (E P) Refining and Marketing (R M) We operate six onshore PSCs. Four are in South Sumatra: Corridor PSC, Corridor TAC, South Jambi B , and Sakakemang JOB. We also operate Block A PSC in Aceh, and Warim in Papua. We hold a non-operator interest in the Banyumas PSC in Java. During 2005, we sold our interests in the Bentu and Korinci-Baru PSCs in Sumatra. Web Site Access to SEC Reports A substantial or extended decline in crude oil, natural gas and natural gas liquids prices, as well as refining margins, would reduce our operating results and cash flows, and could impact our future rate of growth and the carrying value of our assets. Estimates of crude oil and natural gas reserves depend on many factors and assumptions, including various assumptions that are based on conditions in existence as of the dates of the estimates. Any material changes in those conditions or other factors affecting those assumptions could impair the quantity and value of our crude oil and natural gas reserves. If we are unsuccessful in acquiring or finding additional reserves, our future crude oil and natural gas production would decline, thereby reducing our cash flows and results of operations, negatively impacting our financial condition. Crude oil price increases and environmental regulations may reduce our refined product margins. We will continue to incur substantial capital expenditures and operating costs as a result of compliance with, and changes in, environmental laws and regulations, and, as a result, our profitability could be materially reduced. Our businesses are subject to numerous laws and regulations relating to the protection of the environment. These laws and regulations continue to increase in both number and complexity and affect our operations with respect to, among other things: Worldwide political and economic developments could damage our operations and materially reduce our profitability and cash flows. Changes in governmental regulations may impose price controls and limitations on production of crude oil and natural gas. Our operations are subject to business interruptions and casualty losses, and we do not insure against all potential losses, so we could be seriously harmed by unexpected liabilities. Our investments in joint ventures decrease our ability to manage risk. We may not be successful in continuing to grow through acquisitions, and any further acquisitions may require us to obtain additional financing or could result in dilution of earnings per share. Our results of operations could be adversely affected by goodwill impairments.

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