CONOCO PHILLIPS

COP : NYSE

CONOCO PHILLIPS

COP : NYSE

CONOCO PHILLIPS

Date: 17/12/2010

Symbol: COP

Exchange: NYSE

Industry: Oil Comp-Integrated

Sector: Energy

Recommendation:

Target Price:

Current Price: 65.67 USD

Summary

Strong Buy with a 2011 Target of $90

Increased spending in the Oil and

Gas Sector

Expected rally in Gas Prices

Strong fundamentals

Financial Summary

SUMMARY INTRA-DAY INTERACTIVE CHART

Change 0.550 (0.845%)

Bid N.A.

Ask N.A.

Open 65.320

High 65.720

Low 64.830

Volume N.A.

52-Week Range 66.34 - 46.63

1-Yr Return 36.137%

EARNINGS FUNDAMENTALS

Earnings Past 12 Months 5.800 Shares (Millions) 1,469.225

Quarter Est. EPS (12/10) 1.26 Market Cap (Millions) 96,483.970

Quarter Est. EPS (03/11) 1.47 Float (Millions) 1,467.404

Year Est. EPS (12/10) 5.91 Return on Equity 8.260

Price/Earnings (Trailing) 11.322 Short Interest 16,220,661.000

Relative P/E 0.729 Last Dividend Reported 0.550 Regular Cash

Earnings Growth Rate 65.100 Dividend Yield (ttm) 3.275

Estimated P/E 11.000 Relative Dividend Yield 1.730

Company Highlights

ConocoPhillips is an international, integrated energy company which operates in several business segments. The

Company explores for and produces petroleum, and refines, markets, supplies, and transports petroleum.

ConocoPhillips also gathers and processes natural gas, and produces and distributes chemicals and plastics.

At ConocoPhillips, responsibly delivering energy to the world is just the beginning. As an international, integrated

energy company, ConocoPhillips realizes the extent of its global impact, which is why the company conducts its

business in a safe, environmentally responsible and ethical manner. The people at ConocoPhillips are the driving

force behind the company’s success. From the company’s beginning in 1875, its people have been the catalyst for

innovation in all aspects of the business.

ConocoPhillips centers its business on one core purpose: to responsibly deliver energy to the world. To do this, the

company finds, produces, refines, markets and ultimately supplies energy resources to individuals and businesses

worldwide.

The company’s four core worldwide activities include:

1.Exploration and Production

ConocoPhillips’ Exploration and Production segment explores for and produces oil, natural gas and natural gas

liquids around the world. Through the company’s Exploration and Production, ConocoPhillips is developing legacy

assets that can provide strong financial returns over long periods of time.

EXPLORATION AND PRODUCTION FACTS

As of year-end 2009:

Total Reserves1 8.4 BBOE

Assets $101.0 billion

Employees 12,295

Five-Year Reserve Replacement Average 145%

Total Worldwide Production1 1,854 MBOED

Crude Oil and NGL Production1 968 MBD

Natural Gas Production1 4,877 MMCFD

1. Excludes LUKOIL. Natural gas reserves are converted to BOE based on a 6:1 ratio – 6,000 cubic feet of natural gas converts to 1 BOE.

2. Refining, Marketing, Supply and Transportation

ConocoPhillips is the fourth-largest non-governmental controlled refiner in the world. As of December 31, 2008,

ConocoPhillips’ refineries included 12 in the United States, four in Europe and one in Asia. ConocoPhillips owns or

leases transportation assets – pipelines and terminals, marine and inland vessels, railcars, and trucks – to bring

crude oil and feedstock to its refineries and to carry refined products to market.

REFINING AND MARKETING FACTS

As of year-end 2009:

U.S. Refineries: 12 refineries.

International refineries: 5 in 4 countries

U.S. marketing outlets Approximately 8,500

International marketing outlets Approximately 1,400

(includes Coop®)

U.S. crude processing

capability:

2.0 MMBD

International crude processing

capability

0.7 MMDB

Key products: Gasoline, diesel fuel, jet fuel, liquefied petroleum gas, base oils, lubricants, solvents, aviation gasoline, and

premium and fuel-grade petroleum cokes

Assets: $37.0 billion

Employees: Approximately 11,700 employees

3. Natural Gas Gathering, Processing and Marketing

ConocoPhillips’ assets include natural gas gathering and processing operations, and natural gas liquids fractionation

and marketing businesses. These processes are conducted in North America through ConocoPhillips’ 50 percent

interest in DCP Midstream, LLC. As of December 2008, the company had 63 natural gas processing plants and

approximately 60,000 miles of gathering lines.

4. Chemicals and Plastics

ConocoPhillips participates in chemicals and plastics production worldwide through its 50 percent interest

in Chevron Phillips Chemical Company LLC (CPChem), one of the world’s largest producers of olefins, polyolefins,

aromatics and styrenics, piping and proprietary plastics. As of December 2008, CPChem had five research and

technology centers and 35 production facilities in nine countries.

Additionally, ConocoPhillips is working to develop energy sources and new technologies – from conventional to

heavy oil and natural gas, to alternative supplies of energy – in applications that leverage our expertise and build on

existing businesses.

Facts (100 percent)

As of year-end 2009

• Revenue of $8.7 billion.

• $7.4 billion in assets.

• Ownership interest in 34 global manufacturing facilities and four research and technical centers.

• Approximately 4,600 employees.

• Produces chemical products essential to manufacturing more than 70,000 consumer and industrial

products.

Latest News

Canada's energy regulator approved plans on Thursday for a C$16.2 billion ($16.1 billion) Arctic

gas pipeline, but the project faces growing economic uncertainty as natural gas prices languish.

The National Energy Board, in a ruling released after six years of hearings and deliberations, said

the Mackenzie Gas Project is in the public interest, provided the major oil companies that are

backing it meet more than 200 technical, environmental and socioeconomic conditions.

"We examined the benefits the project can bring. We found that they are large and varied," the

board said. "We also looked at the negative impacts. We found that they can be minimized and

are acceptable."

The Mackenzie Pipeline project, first envisioned in the 1970s, is led by Imperial Oil Ltd

(IMO.TO). Its partners are Royal Dutch Shell (RDSa.L), ConocoPhillips (COP.N), Exxon Mobil

Corp (XOM.N) and Aboriginal Pipeline Group.

The pipeline would carry as much as 1.2 billion cubic feet of gas a day to the Alberta border from

the Mackenzie Delta on the coast of the Arctic Beaufort Sea.

The federal government still needs to sign off on the plan, and Environment Minister John Baird

said the cabinet will examine the NEB's ruling in the new year. He did not say when he expected

to issue a decision.

The Northwest Territories governments and many residents of northern Canada have been

anxiously awaiting the decision on the massive development, which they say has the potential to

create jobs and spinoff businesses, especially in regions where traditional subsistence livelihoods

are vanishing.

Some environmental groups have opposed the project, arguing it would disturb pristine

wilderness. And the Deh Cho, a native group whose lands make up a third of the pipeline route,

have yet to support the development.

The NEB said the companies must provide an updated cost estimate and make a go-ahead

decision by the end of 2013. Construction must start by the end of 2015.

Financial Highlight

CONSENSUS ESTIMATES ANALYSIS

# of Estimates Mean High Low 1 Year Ago

SALES (in millions)

Quarter Ending Dec-10 4 46,395.40 58,339.70 33,216.60 42,556.50

Quarter Ending Mar-11 4 45,353.60 61,771.40 33,165.30 44,988.90

Year Ending Dec-10 8 180,276.00 196,776.00 153,529.00 198,233.00

Year Ending Dec-11 8 186,120.00 252,618.00 147,116.00 270,537.00

EARNINGS (per share)

Quarter Ending Dec-10 16 1.22 1.49 1.04 1.58

Quarter Ending Mar-11 13 1.44 1.75 1.16 1.93

Year Ending Dec-10 21 5.90 6.94 5.35 6.01

Year Ending Dec-11 21 6.34 8.26 4.36 8.26

LT Growth Rate (%) 4 19.45 39.50 8.00 7.00

Sales and Earnings Figures in U.S. Dollars (USD)

VALUATION RATIOS

Company Industry Sector S&P 500

P/E Ratio (TTM) 9.04 5.15 13.21 17.71

P/E High - Last 5 Yrs. 20.09 1.33 1.01 20.08

P/E Low - Last 5 Yrs. 3.89 0.35 0.21 4.99

Beta 1.15 0.91 0.84 1.28

Price to Sales (TTM) 0.51 1.28 6.59 2.13

Price to Book (MRQ) 1.39 0.59 1.49 2.88

Price to Tangible Book (MRQ) 1.48 0.67 2.66 7.88

Price to Cash Flow (TTM) 4.84 3.29 9.18 10.80

Price to Free Cash Flow (TTM) 25.52 9.05 11.12 49.07

% Owned Institutions -- -- -- --

DIVIDENDS

Company Industry Sector S&P 500

Dividend Yield 3.45 2.31 1.65 1.65

Dividend Yield - 5 Year Avg. 2.51 2.73 1.63 2.47

Dividend 5 Year Growth Rate 16.37 6.41 8.07 -6.45

Payout Ratio(TTM) 30.10 9.23 13.09 38.55

GROWTH RATES

Company Industry Sector S&P 500

Sales (MRQ) vs Qtr. 1 Yr. Ago 20.06 7.91 20.18 9.53

Sales (TTM) vs TTM 1 Yr. Ago 23.13 13.55 20.84 9.04

Sales - 5 Yr. Growth Rate 2.22 11.83 14.52 9.86

EPS (MRQ) vs Qtr. 1 Yr. Ago 108.54 58.56 135.53 6.75

EPS (TTM) vs TTM 1 Yr. Ago 136.67 -- -- --

EPS - 5 Yr. Growth Rate -10.93 4.74 9.98 6.98

Capital Spending - 5 Yr. Growth Rate 2.72 13.88 17.79 4.89

FINANCIAL STRENGTH

Company Industry Sector S&P 500

Quick Ratio (MRQ) 1.08 0.42 0.62 0.67

Current Ratio (MRQ) 1.39 0.65 0.79 1.00

LT Debt to Equity (MRQ) 33.48 16.42 16.65 118.61

Total Debt to Equity (MRQ) 34.03 24.78 21.84 172.83

Interest Coverage (TTM) -17.52 6.32 2.51 18.91

PROFITABILITY RATIOS

Company Industry Sector S&P 500

Gross Margin (TTM) 16.98 18.51 24.16 32.72

Gross Margin - 5 Yr. Avg. 18.22 36.48 27.56 29.13

EBITD Margin (TTM) 15.22 -- -- --

EBITD - 5 Yr. Avg 12.94 26.44 20.01 18.52

Operating Margin (TTM) 9.62 5.10 5.95 --

Operating Margin - 5 Yr. Avg. 8.47 20.16 14.84 16.23

Pre-Tax Margin (TTM) 9.62 4.93 6.40 14.93

Pre-Tax Margin - 5 Yr. Avg. 8.47 19.99 15.59 15.83

Net Profit Margin (TTM) 5.65 3.40 3.31 11.10

Net Profit Margin - 5 Yr. Avg. 3.02 13.10 10.28 11.62

Effective Tax Rate (TTM) 41.32 12.55 16.12 49.94

Effecitve Tax Rate - 5 Yr. Avg. 64.31 29.56 23.73 25.24

EFFICIENCY

Company Industry Sector S&P 500

Revenue/Employee (TTM) 6,304,434 9,949,443 41,754,269 675,859

Net Income/Employee (TTM) 355,933 317,286 2,342,240 85,228

Receivable Turnover (TTM) 14.05 6.71 7.08 10.48

Inventory Turnover (TTM) 21.66 3.71 3.09 6.78

Asset Turnover (TTM) 1.23 0.52 0.32 0.56

MANAGEMENT EFFECTIVENESS

Company Industry Sector S&P 500

Return on Assets (TTM) 6.94 3.69 2.58 6.03

Return on Assets - 5 Yr. Avg. 4.08 12.17 8.85 5.78

Return on Investment (TTM) 8.32 4.58 3.33 7.74

Return on Investment - 5 Yr. Avg. 4.92 15.12 11.48 7.47

Return on Equity (TTM) 16.20 6.39 4.34 18.05

Return on Equity - 5 Yr. Avg. 8.71 21.08 16.67 9.20

Source: http://www.reuters.com

http://www.bloomberg.com

http://www.conocophillips.com

Contact Details:

Chutinush Taksinapinunt

Corporate Account Executive

Heffernan Capital Management

Email: chutinush@heffernan-inc.com

Chutinush Taksinapinunt holds a Bachelor of Business Administrators degree Majoring in Finance and Banking. Chutinush Taksinapinunt is an experienced market maker and Portfolio Manager, having worked with some of Thailand’s largest Securities Company and Financial Institutions.

Price Estimate by Shayne Heffernan PhD

Shayne Heffernan of Ebeling Heffernan holds a PhD in Economics serves as CEO of Heffernan Holdings Inc and Co Founder of Ebeling Heffernan www.ebeling-heffernan.com

Bangkok

Suite 53 Athenee Tower 63 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 THAILAND Tel: +66 2 126 8000 Fax: +66 2 126 8080

New York

347 5th Avenue, Suite 1402-508 Ny, NY 10016 Tel: +1 646-403-9881 Fax: +1 646-403-8014

Singapore

3 Raffles Place #07-01 Bharat Building Singapore 048617 Tel: +65 6329 6408Fax: +65 6329 9699

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