UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
February 15, 2000
PHILLIPS PETROLEUM COMPANY
(Exact name of registrant as specified in its charter)
Delaware 1-720 73-0400345
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
Phillips Building, Bartlesville, Oklahoma 74004
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
918-661-6600
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Item 5. OTHER EVENTS.
On February 15, 2000, Phillips Petroleum Company announced that
during 1999 its worldwide proved reserves increased to
2.23 billion barrels of oil equivalent, up slightly from
2.21 billion barrels of oil equivalent at year-end 1998. The
company replaced 114 percent of its 1999 worldwide hydrocarbon
production. See attached press release dated February 15, 2000.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit 99 Phillips Petroleum Company press release dated
February 15, 2000.
1
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
PHILLIPS PETROLEUM COMPANY
/s/ Rand C. Berney
February 15, 2000 ----------------------------
Rand C. Berney
Vice President and Controller
2
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Exhibit 99
NEWS Phillips Petroleum Company
Public Relations
Bartlesville, Oklahoma 74004
http://www.phillips66.com
Phillips Shield
FOR IMMEDIATE RELEASE
---------------------
Contacts:
Kristi DesJarlais (media) 918/661-6117
Howard Thill (investors) 918/661-4757
Phillips Replaces 114 Percent
Of 1999 Production
Five-year-average replacement equals 110 percent;
Five-year F&D costs average $5.57
BARTLESVILLE, Okla., Feb. 15, 2000 --- Phillips Petroleum Company [NYSE:
P] replaced 114 percent of its 1999 worldwide hydrocarbon production at
an average finding-and-development cost of $4.81 per barrel-of-oil
equivalent (BOE). Excluding acquisitions and sales, Phillips replaced
103 percent of its 1999 worldwide hydrocarbon production.
From 1995 through 1999, Phillips' five-year-average production
replacement equaled 110 percent, while finding-and-development costs
averaged $5.57 per BOE. The company's three-year-average production
replacement equaled 114 percent, while finding-and-development costs
averaged $5.92 per BOE.
Phillips' 1999 finding-and-development cost includes significant
expenditures associated with two high-potential projects--the company's
exploration program in China's Bohai Bay and its Hamaca heavy-oil project
in Venezuela's Orinoco oil belt. The company did not book reserves in
1999 for either project. Excluding the costs associated with these two
projects, Phillips' 1999 finding-and-development cost was $4.25 per BOE,
lowering the company's five-year finding-and-development cost to $5.35
per BOE.
"In 1999, our domestic portfolio shifted more to gas production due to
the sale of a number of non-strategic, low-return, oil-producing fields
and the acquisition of strategically located gas assets," said Kirby
Hedrick, executive vice president, upstream. "Looking forward, we have
committed nearly 70 percent of Phillips' 2000 capital budget to worldwide
exploration and production activities in support of our strategy to add
legacy assets to our portfolio. Further, we believe our drilling program
for 2000--including promising plays in the Atlantic Margin and
Kazakhstan, as well as additional exploration prospects in China's Bohai
Bay--can yield additional long-life reserves."
- more -
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Phillips Replaces 114 Percent
Of 1999 Production
Page 2
The company's worldwide hydrocarbon production decreased slightly in 1999
to 182 million BOE, down from 185.5 million BOE in 1998. During the
year, Phillips benefited from new production from the Janice and
Renee/Rubie fields offshore the United Kingdom, the Siri field offshore
Denmark, and the Elang/Kakatua/Kakatua North fields in the Timor Sea, as
well as from an asset acquisition in North Louisiana. Decreases in
production were primarily due to property sales, normal field declines
and lower natural gas output from Norway.
Worldwide proved reserves increased in 1999 to 2.23 billion BOE, up
slightly from 2.21 billion BOE in 1998. Worldwide proved reserves of
crude oil increased about 1 percent, while worldwide proved reserves of
natural gas and natural gas liquids each increased about 2 percent.
Phillips' proved reserve-to-current-production ratio is 12.3 years.
As a result of significant, non-strategic asset sales, the company
replaced only 6 percent of its reserves produced in the United States at
an average cost of $5.08 per BOE. Excluding acquisitions and sales,
Phillips replaced 58 percent of its 1999 U.S. hydrocarbon production.
Phillips replaced 206 percent of the non-U.S. reserves it produced at an
average cost of $4.72 per BOE. Outside of the United States, the company
replaced 184 percent of its crude oil and natural gas liquids production
and 258 percent of its natural gas production.
Natural gas comprises 48 percent of Phillips' proved hydrocarbon reserves
worldwide and 70 percent of its U.S. reserves.
Finding-and-development costs are the costs of acquiring, exploring for
and developing oil and gas reserves, divided by the company's net reserve
additions, excluding production and sales.
Phillips is an integrated petroleum company engaged in oil and gas
exploration and production worldwide; gas gathering, processing and
marketing in the United States; refining, marketing and transportation
operations primarily in the United States; chemicals and plastics
manufacturing and sales around the globe; and technology development.
Founded in Bartlesville, Okla., in 1917, the company had 15,900 employees
and $15 billion of assets at the end of 1999, and $14 billion of revenues
for the year.
- # # # -
For more information see our 1999 F&D and production replacement table at
www.phillips66.com/newsroom/images&charts/F&Dtable.doc
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Certain statements contained in this press release are "forward-looking
statements" within the meaning of The Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known and
unknown risk and uncertainty. The factors identified in this cautionary
statement are important factors (but not necessarily all important
factors) that could cause actual results to differ materially from those
expressed in any forward-looking statement. The words "looking forward"
and "believe" identify forward-looking statements. Factors which could
cause the result to differ from those expected or believed are: further
analysis of current reserve data; additional reserve data not received or
analyzed as of December 1 of last year; errors in interpretation and
compilation of data; delays or difficulties encountered in drilling;
lower than expected results from development wells; and the actions of
government. In any forward-looking statement in which the Company
expresses an expectation or belief as to future results, such expectation
or belief is expressed in good faith and believed to have a reasonable
basis, but there can be no assurance that the statement or expectation or
belief will result or be achieved or accomplished.
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Phillips Shield
Phillips Replaces 114 Percent
Of 1999 Production
1998 1999
---------------- ----------------
Worldwide hydrocarbon 185.5 million 182 million BOE
production BOE
- -----------------------------------------------------------------
U.S. hydrocarbon production 89.7 million BOE 83.5 million BOE
- -----------------------------------------------------------------
Non-U.S. hydrocarbon 95.8 million BOE 98.5 million BOE
production
- -----------------------------------------------------------------
U.S. reserves replaced -40 percent 5.6 percent
-36 million BOE 4.7 million BOE
added vs. 89.7 added vs.
million produced 83.5 million
produced
- -----------------------------------------------------------------
Non-U.S. reserves replaced 159 percent 206 percent
152 million BOE 203.2 million
added vs. 95.8 BOE added vs.
million produced 98.5 million
produced
- -----------------------------------------------------------------
Worldwide proved reserves 2.21 billion BOE 2.23 billion BOE
- -----------------------------------------------------------------
U.S. proved reserves 871.5 million 792.7 million
BOE BOE
39 percent of 36 percent of
total proved total proved
reserves reserves
worldwide worldwide
- -----------------------------------------------------------------
Worldwide proved reserves of 958 million 964 million
crude oil and condensate barrels barrels
- -----------------------------------------------------------------
Worldwide crude oil and 82 million 84 million
condensate production barrels barrels
- -----------------------------------------------------------------
Worldwide proved reserves of 203 million 207 million
natural gas liquids barrels barrels
- -----------------------------------------------------------------
Worldwide natural gas liquids 14 million 12 million
production barrels barrels
- -----------------------------------------------------------------
Worldwide proved reserves of 6.3 trillion 6.4 trillion
natural gas cubic feet cubic feet
- -----------------------------------------------------------------
Worldwide natural gas 537 billion 516 billion
production cubic feet cubic feet
- -----------------------------------------------------------------
U.S. reserves replaced, 35 percent 7 percent
without revisions 31 million BOE 5.5 million BOE
added vs. 89.7 added vs. 83.5
million produced million produced
- -----------------------------------------------------------------
Non-U.S. reserves replaced, 162 percent 185 percent
without revisions 155.5 million 181.9 million
BOE added vs. BOE added
95.8 million vs. 98.5 million
produced produced
- -----------------------------------------------------------------
U.S. finding-and-development $9.37 per BOE $5.02 per BOE
costs, without revisions
- -----------------------------------------------------------------
Non-U.S. finding-and- $7.77 per BOE $5.22 per BOE
development costs, without
revisions
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Five-Year
1999 Average
---------------- ----------------
Worldwide finding-and- $4.81 per BOE* $5.57 per BOE**
development costs
- -----------------------------------------------------------------
U.S. finding-and-development $5.08 per BOE $6.44 per BOE
costs
- -----------------------------------------------------------------
Non-U.S. finding-and- $4.72 per BOE $5.29 per BOE
development costs
- -----------------------------------------------------------------
* Worldwide finding-and-development costs for 1999 excluding
the costs associated with Bohai Bay and Hamaca were
$4.25 per BOE.
** Worldwide five-year average finding-and-development costs
for 1999 excluding the costs associated with Bohai Bay
and Hamaca were $5.35 per BOE.
NOTE: Worldwide production numbers include fuel--that is,
hydrocarbons pumped out of the ground and used on-site to run
equipment and machinery.
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