The North American Oil and Natural Gas Renaissance

Houston Economic Club Remarks by Marianne Kah

October 22, 2013

Cautionary Statement The 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 our operations or operating results. Actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict such as oil and gas prices; operational hazards and drilling risks; potential failure to achieve, and potential delays in achieving expected reserves or production levels from existing and future oil and gas development projects; unsuccessful exploratory activities; unexpected cost increases or technical difficulties in constructing, maintaining or modifying company facilities; international monetary conditions and exchange controls; potential liability for remedial actions under existing or future environmental regulations or from pending or future litigation; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets; general domestic and international economic and political conditions, as well as changes in tax, environmental and other laws applicable to ConocoPhillips’ business and other economic, business, competitive and/or regulatory factors affecting ConocoPhillips’ business generally as set forth in ConocoPhillips’ filings with the Securities and Exchange Commission (SEC). Use of non-GAAP financial information – This presentation may include non-GAAP financial measures, which help facilitate comparison of company operating performance across periods and with peer companies. Any non-GAAP measures included herein will be accompanied by a reconciliation to the nearest corresponding GAAP measure in an appendix. Cautionary Note to U.S. Investors – The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves. We use the term "resource" in this presentation that the SEC’s guidelines prohibit us from including in filings with the SEC. U.S. investors are urged to consider closely the oil and gas disclosures in our Form 10-K and other reports and filings with the SEC. Copies are available from the SEC and from the ConocoPhillips website.

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ConocoPhillips Profile As of June 30, 2013

Global Energy Company Exclusively E&P

Worldwide Presence Operating Segments

NYSE ticker: COP

Headquartered in Houston, Texas

~17,500 employees worldwide

Operations and activities in 30 countries

Exploration in 19 countries

Production in 14 countries

Proved reserves in 15 countries

Explore for, produce, transport and market hydrocarbons

Crude oil, natural gas, natural gas liquids (NGL), liquefied natural gas (LNG) and bitumen

Alaska

Lower 48 & Latin America

Canada

Europe

Asia Pacific & Middle East

Other International

ConocoPhillips’ Liquids and Natural Gas Production

2012 Average Daily Net Production (MBOED)

Alaska

Lower 48

Canada

Other

44%

39%

7%

10%

2Q13 Production Mix (%)

Natural Gas

Crude

Bitumen

NGL

4

About 60% of COP’s production is in North America

Source: ConocoPhillips Fact Sheet, Summer 2013, includes discontinued operations

40%

14%

29%

17%

Global Shale Resources

China 14%

Argentina 10%

Algeria 9%

Canada 7%

Mexico 7%

Australia 6%

South Africa 5%

Russia 4%

Brazil 3%

Rest of World 20%

Technically Recoverable Shale Gas Resources 7,795 TCF

U.S. 15%

5

Russia 22%

U.S. 17% (58)

China 9%

Argentina 8%

Libya 7%

Australia 5%

Venezuela 4%

Mexico 4%

Pakistan 2%

Canada 3%

Rest of World 19%

Technically Recoverable Shale Oil Resources: 345 Billion Barrels

Source: ARI for U.S. Department of Energy, EIA, June 2013

4 Catalysts that helped to speed North America’s success

Legal framework with private property/mineral rights, established regulations

Rigs and Service industries well-established

Skilled E&P workforce Infrastructure

Source: U.S. Dept. of Energy, Energy Information Administration

North American Shale Plays

6

The U.S. Returned to Being a Major World Producer

7

0

10

20

30

40

50

60

70

U.S

.

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Iran

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The U.S. was the largest natural gas producer in 2012

Source: BP Statistical Review 2013

0.0

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U.S. crude oil production growth surpassed all others in recent years

Source: Oil and Gas Journal; 2012 vs. 2008 average

The U.S. may surpass Russia as an oil and gas producer this year

North America Has An Abundance of Low-Cost Natural Gas

Non-Shale Production

Shale Production

0

20

40

60

80

100

120

2005 2010 2015 2020 2025

Bill

ion

Cu

bic

Fee

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North America Production versus Demand

U.S. & Canada Demand

Shale % of Production 2.5% 20% 43% 52% 54%

8

Source: Wood Mackenzie

Shale gas production enables LNG exports

2005

2007

2008

2010

2013

(5)

0

5

10

15

20

2010 2015 2020 2025

EIA Projections for U.S. LNG Imports

Net exporter

Source: U.S. Energy Information Administration, Annual Energy Outlooks

# Project Sponsor MTPA* BCFD Buyers

United States - Non FTA DOE approved

1 Sabine Pass (Phase I & II) Cheniere 16 2.0 BG, Gas Natural, Kogas, Gail, TOTAL

2 Freeport (Trains 1 and 2) Freeport 9 1.1 Osaka Gas, Chubu Electric, BP

3 Lake Charles BG, Southern Union 15 2.0

4 Cove Point Dominion 6 0.7 Sumitomo, GAIL

Non FTA Total 46 5.8

United States – Other announced projects

5 Freeport (Train 3) Freeport 9 1.1 Toshiba, SK E&S

6 Cameron Sempra 12 1.5 Mitsubishi, Mitsui, GDF Suez, TEPCO

7 Jordan Cove Jordon Cove 9 1.1

8 Oregon LNG Dev. Co. 9 1.2

9 Corpus Christi Cheniere 16 2.0

10 Lavaca Bay Excelerate 10 1.3

11 Carib Energy Carib Energy 0.1 0.01

12 Gulf Coast LNG Gulf Coast LNG 21 2.7

13 Elba Island Shell, Southern LNG 4 0.5

14 Gulf LNG Gulf LNG 11 1.4

15 CE FLNG Cambridge Energy 8 1.0

16 Golden Pass QP, XoM 16 2.0

17 South Texas Pangea LNG 8 1.0

18 Main Pass Main Pass 24 3.1 Petronet

19 Sabine Pass (Phase III) Cheniere 4 0.5 TOTAL, Centrica

20 Venture Global LNG Venture Global 5 0.6

21 EOS LNG EOS LNG 12 1.5

22 Barca LNG Barca LNG 12 1.5

23 Alaska SC LNG XoM, COP,BP, TransCanada

15 2.0

24 Gasfin Gasfin 2 0.2

25 Waller Point Waller LNG 1 0.2

26 Magnolia LNG Ltd 8 1.0 Guvnor, Gas Natural

Other Total 216 27.4

U.S. Total 262 33.3

Canada - Filed and/or announced commercial deal

27 Kitimat Chevron, Apache, Canada ltd

10 1.3 Kogas, Gas Natural

28 BC LNG Various. 2 0.2 Golar

29 Goldboro Pieridae Energy 1 0.1 E.ON

30 LNG Canada (Kitimat) Shell, Kogas, Mitsubishi, CNPC

24 3.1 Kogas, Mitsubishi, Petrochina

31 Pacific Northwest Petronas, Japex 20 2.5 Japex

32 Price Rupert BG 22 2.7

33 WCC LNG Imperial/XoM 15 2.0

Canada Total 93 12.1

North America Total 355 45

Proposed North American Liquefaction Projects

33 projects with 355 MTPA or

45 BCFD of potential exports

29

4

13

7

8

12

9 17 10

2,5 16 1, 19 24

20 25

26

6 3 15

18 14

23

33

31

32

28 27 30

9

Source: U.S. Federal Energy Regulatory Commission, various media reports

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An abundance of resources can be brought to market at $5 or less

Source: Wood Mackenzie

$0

$1

$2

$3

$4

$5

$6

Rea

l 20

12

$/M

MB

tu

Full-cycle Breakeven Costs

North America Shale Gas Breakeven Costs for Year 2020 Production

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Jan-81 Jan-89 Jan-97 Jan-05 Jan-13

Mill

ion

Bar

rels

pe

r D

ay

The Shale Revolution Has Spread to Oil

% HORIZ.

Gas

0%

10%

20%

30%

40%

50%

60%

70%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

20

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U.S

. Rig

Co

un

t

Drilling Moved from Gas to Oil

U.S. oil production now exceeds 7 MMBD for the first time since 1992 Source: Baker Hughes, U.S. Energy Information Administration

Top 4 Oil Producing States

Oil

Texas (Eagle Ford &

Permian Basin)

Alaska

California

North Dakota (Bakken)

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Lower-48 crude

Alaska crude

NGL

0

2

4

6

8

10

12

1949 1953 1957 1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009 2013

Mill

ion

Bar

rels

pe

r D

ay

U.S. Field Production of Liquids

Crude oil output

peaked at 9.6 MMBD

in 1970

Arab oil embargo U.S. crude exports banned

U.S. Liquids Production: Decline is Now Reversed

Source: U.S. Department of Energy, EIA, Annual Energy Review 2013, Table 5.1b

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U.S. liquids production has returned to levels not seen since 1986

U.S. Tight Oil Resources* By Breakeven Cost

Source: Rystad Energy, excludes NGLs * Lower 48 proved, probable, possible and contingent resources; crude and condensate only; excludes existing production and undiscovered resources ** Breakeven includes 10% return, land acquisition costs of $5/bbl were added across the board

0

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0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48

WTI

Bre

akev

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Co

st (

20

13

$ p

er

Bar

rel)

**

Eagle Ford BakkenPermian Other Tight Oil

Resources in Billions of Barrels

80% of resources in this range

Most U.S. tight oil resources break even with WTI prices at $50 - $80/bbl

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Eagle Ford Efficiency Improvement

Source: IHS Enerdeq Database 8/9/13. Play level month averages. IP rate – Initial 24 hour production rate for wellhead crude.

Drilling Days (spud to rig release) Oil Initial Production Rate (BBL/d)

0

10

20

30

40

50

60

2008 2009 2010 2011 2012 2013

2008-13 = 45% decrease

0

200

400

600

800

1,000

1,200

2008 2009 2010 2011 2012 2013

2008-13 = 350 % Increase

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Technology improvement offsets movement away from sweet spots

(5)

0

5

10

15

20

25

30

1990 1995 2000 2005 2010 2015 2020 2025 2030

Demand

Net Imports

Mill

ion

Bar

rels

pe

r D

ay

North America Oil Demand, Supply, and Net Imports

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North America could become a net oil exporter by 2020

Source: PIRA Energy Group

2

4

6

8

10

2010 2011 2012 2013

Mill

ion

Bar

rels

pe

r D

ay

U.S. imports of Crude Oil by Type

Light Sweet

Light Sour

Medium

Heavy

~2 MMBD x $90 / bbl ~$66 Billion / year

16

Source: U.S. Department of Energy, Energy Information Agency

U.S. Tight Oil Production is Backing Out Crude Oil Imports

U.S. imports of light, sweet crude oil have fallen sharply

Global Oil Demand vs. Non-OPEC Oil Production* Growth

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Demand Non-OPEC Supply

Non-OPEC supply growth outpacing global oil demand growth

Mill

ion

Bar

rels

pe

r D

ay

Demand Growth Outpacing

Non-OPEC Supply Growth

Non-OPEC Supply Growth Outpacing

Demand Growth

Source: International Energy Agency, October 2013 *Non-OPEC oil production includes NGLs (including OPEC), biofuels and refinery process gain

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Natural Gas Liquids: Breathing New Life into U.S. Chemicals Industry

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2008 2009 2010 2011 2012 2013

Mill

ion

bar

rels

pe

r D

ay

NGL Production Growth has Pushed Infrastructure Build-Outs

18

(0.15)

(0.10)

(0.05)

0.00

0.05

0.10

0.15

0.20

0.25

0.30

2005 2007 2009 2011 2013

Ne

t im

po

rts,

Mill

ion

bar

rels

pe

r d

ay U.S. is Now a Net Exporter of LPGs

Plentiful and more affordable feedstocks for manufacturers Sources: U.S. Department of Energy, EIA for Field Production of natural gas liquids and LPG net imports. Bloomberg for Mt. Belvieu ethane and Singapore naphtha prices.

0.0

0.5

1.0

1.5

2.0

2003 2005 2007 2009 2011 2013

Chemicals Feedstock Costs Favor U.S. Price ratio of Mt. Belvieu purity ethane vs. Singapore naphtha

Benefits of Unconventional Resource Revolution

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Economic

Environmental Security

Gas use in power:

-Fewer air emissions

-Less water use

-Smaller land footprint

-Sufficient supplies

-Reliable supplies

-Diverse onshore supply base

-Close to markets

-Domestic economic growth

-Job creation

-Affordable energy

-Revenues to governments

Attractive Environmental Properties of Natural Gas In Power Generation

Clean-burning (low or no emissions of NOX, SO2 and mercury)

About half the lifecycle greenhouse gas emissions of coal

Small acreage and water footprint

The ability to site closer to demand

Combined-cycle gas-powered plants use less water than coal-fired or nuclear plants

No solids disposal issues (fuel rods, ash, scrubber waste)

Enables use of intermittent renewable power sources

Natural gas can play an important role in reducing emissions

20

United States: Power Generation and CO2 Emissions

0

2

4

6

8

10

12

1995 2000 2005 2010

Electricity generation (TWh/yr)

21

CO2 Emissions from Fossil Fuel Electricity Generation (Million MT)

Gas displacement of coal has been key driver of reduced CO2 emissions

Nuclear, Hydro, Other

Coal

Natural Gas

Renewables

4500

5000

5500

6000

6500

1995 2000 2005 2010

-1%

+21%

Source: U.S. Department for Energy, Short Term Energy Outlook, May 2013

Importance of Oil and Natural Gas to the U.S. Economy

Employment

The industry supports about 9.8 million U.S. jobs

1.1 million more jobs could be created by 2030 with policies that encourage greater resource development

Economy The industry generates more than $1.2 trillion or 8 percent of U.S. GDP

Lower natural gas prices will increase GDP 1.1% in 2013 and support 3% higher industrial production in 2017

Government Revenues

Adds jobs, promotes economic growth and provides government revenues

Oil & Gas companies pay more than $86 million per day to the federal government in both income taxes and production fees

Policies that encourage development will raise over $800 billion in additional cumulative government revenue by 2030

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Source: Pricewaterhouse Coopers, 2012; WoodMackenzie, 2011; World Economic Forum, 2012 ; API, Putting Energy In Perspective, 2013.

Importance of Oil and Natural Gas to Texas

Largest energy producer in the U.S.

27% of total U.S. refining capacity

Largest energy consumer in the U.S.

Annually consumes more than 3.6 trillion cubic feet of gas or 1/5 of total U.S. gas consumption

Over 4.6 million natural gas consumers in state

Nearly half of Texas’ electricity generated by natural gas

Significant economic contributions from oil and natural gas

$144 billion in labor income

Employs 1.9 million Texans

Texas accounts for 20% of U.S. industrial energy consumption

23

Source: U.S. Dept. of Energy, EIA , PWC

Oil Fields

Gas Fields

What The Oil and Gas Industry Needs To Do

Find more people

Continued focus on process safety and environmental performance

Greater collaboration

Industry-wide issues like spill containment

Government and industry

Stakeholder engagement

Technology development

Enter new frontiers

Reduce costs

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What The Industry Needs – More People

Global Petrotechnical Employees by Age Bracket

25

Source: Schlumberger Business Consulting – Oil & Gas Benchmark Studies, 2006 & 2012

A spectacular demographic shift is under way

Supportive Government Policies Needed to Capture Domestic Oil and Natural Gas Opportunity

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Create positive business climate for investment

Realistic tax policy

Regulations should be efficient and effective

Support free trade

Facilitate resource access

Open more public lands to drilling

Reduce permitting delays

Support ongoing reviews of state regulations of well operations including hydraulic fracturing

Avoid picking “winners”

Don’t mandate or subsidize particular fuels or technologies

Set performance based regulations that encourage cost effective innovation to meet environmental objectives

Summary

The U.S. has returned to being a major oil and natural gas producer thanks to the shale revolution

There are numerous economic, national security and environmental benefits

Industry and government should take steps to ensure the shale revolution continues

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