Exploration and Production
 ConocoPhillips’ business in the Lower 48 region is based on a diverse set of assets located in major basins from the Rocky Mountains to the Gulf of Mexico. Activity is extremely high with 773 net wells completed in 2007 and 20,730 net wells producing.
ConocoPhillips’ 2007 onshore production primarily consisted of natural gas from the San Juan and Permian basins, the Lobo and Bossier trends, and the panhandles of Texas and Oklahoma. Its onshore exploration efforts were focused on East Texas, Mid-Continent and the Rocky Mountains.
The company also has operations in the Wind River, Anadarko and Fort Worth basins, as well as properties in the Williston and Piceance basins and the Cedar Creek anticline.
Offshore, ConocoPhillips operates the Magnolia field and has interests in several fields operated by co-venturers. The company is concentrating its deepwater Gulf of Mexico development efforts on the Ursa/Princess, Magnolia and K2 field developments in water depths greater than 3,000 feet.
Exploration efforts focused on East Texas Bossier trend, deep¬water Gulf of Mexico, Bakken play in Williston basin and the Barnett trend in the Fort Worth basin. Eighty-one exploration wells were drilled in 2007. In addition, the company purchased a number of leases in the Gulf of Mexico that are expected to support an active deepwater exploration drilling program during the next few years.
Additionally, ConocoPhillips is participating in the construction of a regasification facility on the Texas coast and has capacity rights in another onshore Texas terminal.
Onshore
San Juan Basin
ConocoPhillips is the largest operator in the San Juan basin, located in northwestern New Mexico and southwestern Colorado. Its 2007 total net production was 971 MMCFD of natural gas, 48 MBD of NGL and 2 MBD of crude oil. The company has a significant number of productive leaseholds and mineral acreage in this area, which also includes the majority of ConocoPhillips’ coalbed methane production.
- Fruitland Coal (coalbed methane): In 2007, net production from the Fruitland Coal averaged 481 MMCFD of natural gas. To offset the natural decline rate, the company has an ongoing program that consists of drilling new wells, performing workovers on existing wells, adding compression and installing artificial lift, where appropriate.
- Mesa Verde, Pictured Cliffs and Dakota formations (conventional): The company continues to pursue development opportunities in these three conventional formations. The Mesa Verde formation, which consists of the Lewis Shale, Cliffhouse, Menefee and Point Lookout sands, is the largest-producing tight gas formation in the San Juan basin. Net production from the tight gas producing formations averaged 490 MMCFD of natural gas, 48 MBD of NGL and 2 MBD of crude oil in 2007.
Piceance Basin
During 2007, ConocoPhillips continued development activity in the Piceance basin in north Parachute Creek in the heart of the Williams Fork Mesa Verde production fairway. At year-end 2007, the company had interests in approximately 32,000 net acres, including oil shale property.
Permian Basin
ConocoPhillips holds operated and nonoperated assets in this region in West Texas, including primary recovery (Val Verde basin), secondary recovery (Waddell Ranch, southeastern New Mexico and Howard Glasscock fields) and tertiary recovery projects (carbon dioxide floods). Activities in 2007 were centered on continued opti¬mization and development of these assets. The basin’s net production in 2007 averaged 129 MMCFD of natural gas, 5 MBD of NGL and 23 MBD of crude oil.
Wind River Basin
Covering more than 86,500 acres in Wyoming, the Madden field is operated by ConocoPhillips. Net gas production averaged 97 MMCFD in 2007 from multiple horizons ranging in depth from 5,000 feet to more than 25,000 feet, where the deep Madison forma¬tion occurs. The company owns an approximate 48 percent working interest in the Lost Cabin gas plant and net revenue interests varying from 22 percent to 40 percent in the producing reservoirs.
Williston Basin
The Williston basin operations, comprised of 234,000 net acres in western North Dakota and eastern Montana, are focused on the Cedar Creek anticline and in the Bakken Shale formation. During 2007, a waterflood development program was completed at the Cedar Hills South and East Lookout Butte units, and drilling continued in Montana and North Dakota in the Bakken play. The basin’s 2007 net production averaged 42 MBD of crude oil, 15 MMCFD of natural gas and 2 MBD of NGL.
Anadarko Basin
The Anadarko basin, located primarily in western Oklahoma, encom¬passes more than 30,000 square miles and contains some of the deepest producing formations in the world, ranging in depth from 11,000 feet to more than 21,000 feet. Its 2007 net production averaged 85 MMCFD of natural gas and 2 MBD of NGL.
Fort Worth Basin
ConocoPhillips has an interest in approximately 124,000 net acres in the Fort Worth basin of north-central Texas. In 2007, the company continued to develop the Barnett Shale formation acreage in Denton, Wise, Johnson, Hood, Parker and Palo Pinto counties. Its 2007 net production averaged 59 MMCFD of natural gas, more than 5 MBD of NGL and 1 MBD of crude oil.
Texas and Oklahoma Panhandles
The company holds approximately 1 million acres of development and exploration assets in this region. Producing wells primarily are shallow gas wells in the panhandles of Texas and Oklahoma. Its 2007 net production averaged 113 MMCFD of natural gas, 4 MBD of NGL and 1 MBD of crude oil.
Lobo Trend
ConocoPhillips operates approximately 2,000 wells in the Lobo trend, a long-life gas field in South Texas. In 2007, the company drilled approximately 66 wells and net production averaged 223 MMCFD of natural gas, 8 MBD of NGL and 1 MBD of crude oil.
Bossier Trend
ConocoPhillips has interests in more than 184,000 net acres in the Bossier trend in East Texas and is expanding beyond its Savell field development with other exploration and development activities along the trend. The trend’s 2007 net production averaged 160 MMCFD of natural gas.
Southern Louisiana
In southern Louisiana, the company owns approximately 680,000 net acres of fee lands with both surface and mineral rights. Drilling activ¬ities include select development and exploration opportunities. Its 2007 net natural gas production averaged 83 MMCFD and its crude oil production averaged 6 MBD.
Onshore Other
Other properties exist in Wyoming (Rockies conventional gas), East Texas, the Texas Gulf Coast, Louisiana, Utah (Uinta basin) and Alabama (Black Warrior basin).
Gulf of Mexico
Ursa/Princess
Mississippi Canyon 765, 766, 808, 809, 810, 852, 853, 854
Operator: Shell (45.6%)
Co-venturers: BP (22.6%), ConocoPhillips (15.9%),
ExxonMobil (15.9%)
Ursa, one of the largest fields in the Gulf of Mexico, began produc¬tion in March 1999. The Ursa tension-leg platform (TLP), in a water depth of 3,900 feet, is an established infrastructure hub. Ursa began processing 50 MBOED net of third-party production from the Crosby satellite field in December 2001, and its primary field development on Ursa was completed in 2004.
The Princess development is a northern subsalt extension of the Ursa field. Princess was discovered in 2000, and first production was achieved in 2002 via an extended-reach well from the Ursa TLP. A three-well subsea tieback to the Ursa TLP was completed in 2003. Additional subsea wells may be added, pending the results of the first subsea program. In addition, the co-venturers have undertaken a field-wide waterflood development in order to increase resource recovery from the Ursa field. Ursa/Princess 2007 net production averaged 12 MBD of crude oil, 16 MMCFD of natural gas and 1 MBD of NGL.
Magnolia
Garden Banks 783, 784
Operator: ConocoPhillips (75.0%)
Co-venturer: Devon (25.0%)
Discovered in 1999, the Magnolia field is located 165 miles south of the Louisiana coastline in Garden Banks Blocks 783 and 784 at a water depth of 4,700 feet. The field was initially developed with eight wells tied back to the deepest TLP operation in the world. First production began in 2004, and initial development was completed in 2006. Follow-up development opportunities currently are being assessed. Net production in 2007 averaged 6 MBD of crude oil, 13 MMCFD of natural gas and 1 MBD of NGL.
K2
Green Canyon 518, 561, 562, 563, 605, 606, 607
Operator: Anadarko (41.8%) Co-venturers: ConocoPhillips (12.4%), ENI (13.4%), Nippon (11.6%), MCX (11.6%) Chevron (9.2%)
The K2 accumulation was discovered in 1999 and is located in Green Canyon 562, Green Canyon 518 and five surrounding blocks. The project was sanctioned for development in 2004 and included a four-well subsea tieback to Marco Polo (Anadarko, GC 608). First produc¬tion began in May 2005. Net production in 2007 averaged 3 MBD of crude oil and 2 MMCFD of natural gas.
U.S. Lower 48 Exploration and Business Development
Onshore Exploration
ConocoPhillips is leveraging its expertise in both conventional and unconventional resources to grow its domestic resource base. The principal focus areas are the East Texas Bossier trend, the Bakken play in the Williston basin and the Barnett trend in the Fort Worth basin. The company also has active exploration drilling programs in the Anadarko and Piceance basins and in South Texas. In East Texas, ConocoPhillips is building on its success in the Savell field to expand its position in the Bossier/Cotton Valley trend. In the Mid-Continent and Rockies regions, ConocoPhillips is applying new imaging and completion technologies to optimize resource recognition and recovery.
Gulf of Mexico Exploration
The Gulf of Mexico has become a key exploration focus area for ConocoPhillips following a strategic decision to substantially expand the company’s presence in the area. The Gulf of Mexico continues to offer the potential for large discoveries, most recently in the deep¬water Paleogene play, as well as ideal access to markets and a growing industry infrastructure that facilitates both exploration and production. The company’s existing lease inventory was expanded substantially by successful bidding at federal offshore lease sales held in August and October 2007 and March 2008, with high bids totaling more than $450 million, adding 50 new lease blocks. At year-end 2007, ConocoPhillips had combined interests in 262 gross (176 net) Gulf of Mexico blocks, which increased to 293 gross (198 net) blocks in mid-2008. Prospects captured in the lease sales are expected to support an active deepwater exploration drilling program during the next few years that offers meaningful exposure to high-potential prospects. In 2008, ConocoPhillips will have interests in four explo¬ration wells targeting the Paleogene (Lower Tertiary) play, and in 2009, it plans to participate in additional deepwater wells.
Rockies Express Pipeline
The 1,679-mile Rockies Express Pipeline (REX) currently is under construction and will run from Colorado to Ohio. In June 2006, ConocoPhillips acquired a 24 percent interest in the pipeline and will acquire an additional 1 percent interest after construction is completed. In addition to being an interest owner, ConocoPhillips intends to move natural gas production on the pipeline. REX West, the segment from the Cheyenne, Colo., hub to Audrain County, Mo., began service in the second quarter of 2008. REX East, the segment from Audrain County, Mo., to Clarington, Ohio, currently is in the permitting stage and has a scheduled in-service date of Dec. 31, 2008.
Freeport LNG Terminal
In late 2003, ConocoPhillips signed an agreement with Freeport LNG Development, L.P. to participate in its proposed LNG regasification terminal in Quintana, Texas. As the largest capacity holder, this agree¬ment gives ConocoPhillips 1 BCFD of regasification capacity in the terminal and a 50 percent interest in the general partnership managing the venture. The terminal is being designed with a storage capacity of 6.9 BCF and a send-out capacity of 1.5 BCFD. Freeport LNG received all required permits in early 2005, and construction commenced shortly thereafter. ConocoPhillips is serving as the project manager. Its commercial startup is expected in 2008.
Golden Pass LNG Terminal
In the fourth quarter of 2007, ConocoPhillips signed agreements with affiliates of ExxonMobil and Qatar Petroleum to acquire a 12.4 percent ownership interest in the Golden Pass LNG regasification facility and associated pipeline, which currently is being constructed on the Sabine-Neches Industrial Ship Channel northwest of Sabine Pass, Texas. Subject to the negotiation of definitive agreements, ConocoPhillips also will secure capacity rights in the Golden Pass LNG terminal and pipeline to manage a substantial portion of the LNG purchased from Qatargas 3.
Find out more at
• Freeport LNG
• Golden Pass LNG
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