CONOCOPHILLIPS (Form: 10-Q, Received: 08/05/2021 11:32:25)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark One)

[

]

QUARTERLY

REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

June 30, 2021

[ ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission file number:

001-32395

ConocoPhillips

(Exact name of registrant as specified in its charter)

Delaware

01-0562944

(State or other jurisdiction of incorporation

or organization)

(I.R.S. Employer

Identification No.)

925 N. Eldridge Parkway

Houston

77079

(Address of principal executive offices)

(Zip Code)

281

293-1000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the

Act:

Title of each class

Trading symbols

Name of each exchange on which registered

Common Stock, $.01 Par Value

COP

New York Stock Exchange

7% Debentures due 2029

CUSIP—718507BK1

New York Stock Exchange

Indicate by check mark whether the registrant

(1) has filed all reports required to be filed

by Section 13 or

15(d) of the Securities Exchange Act of 1934 during

the preceding 12 months (or for such shorter

period that

the registrant was required to file such reports),

and (2) has been subject to such filing

requirements for the

past 90 days.

Yes

[x] No [

]

Indicate by check mark whether the registrant

has submitted electronically every Interactive

Data File required

to be submitted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding

months (or for such shorter period that the registrant

was required to submit such files).

Yes

[x] No [

]

Indicate by check mark whether the registrant

is a large accelerated filer, an accelerated filer, a non-accelerated

filer, a smaller reporting company, or an emerging growth company.

See the definitions of “large accelerated

filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in

Rule 12b-2 of the

Exchange Act.

Large accelerated filer

[x]

Accelerated filer [

]

Non-accelerated filer [

]

Smaller reporting company

[

]

Emerging growth company

[

]

If an emerging growth company, indicate by check mark if the registrant has elected

not to use the extended

transition period for complying with any new

or revised financial accounting standards

provided pursuant to

Section 13(a) of the Exchange Act. [

]

Indicate by check mark whether the registrant

is a shell company (as defined in Rule 12b-2 of the

Exchange

Act).

Yes

[

]

[x]

The registrant had

1,339,082,083

shares of common stock, $.01 par value,

outstanding at June 30, 2021.

CONOCOPHILLIPS

TABLE OF CONTENTS

Page

Commonly Used Abbreviations

………………………………………………………………………...

Part I—Financial Information

Item 1. Financial Statements

Consolidated Income Statement

……………………………………………………………………..

Consolidated Statement of Comprehensive Income

…………………………………………………

Consolidated Balance Sheet

…………………………………………………………………………

Consolidated Statement of Cash Flows

……………………………………………………………...

Notes to Consolidated Financial Statements

………………………………………………………...

Item 2. Management’s Discussion and Analysis of Financial Condition and

Results of Operations

…………………………………………………………………………

Item 3. Quantitative and Qualitative Disclosures About Market Risk

………………………………..

Item 4. Controls and Procedures

………………………………………………………………………

Part II—Other Information

Item 1. Legal Proceedings

……………………………………………………………………………..

Item 1A. Risk Factors

…………………………………………………………………………………

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

………………………………...

Item 6. Exhibits

………………………………………………………………………………………..

Signature

………………………………………………………………………………………………….

Commonly Used Abbreviations

The following industry-specific, accounting and

other terms, and abbreviations may be commonly

used in this

report.

Currencies

Accounting

$ or USD

U.S. dollar

ARO

asset retirement obligation

CAD

Canadian dollar

ASC

accounting standards codification

EUR

Euro

ASU

accounting standards update

GBP

British pound

DD&A

depreciation, depletion and

amortization

Units of Measurement

FASB

Financial Accounting Standards

BBL

barrel

Board

BCF

billion cubic feet

FIFO

first-in, first-out

BOE

barrels of oil equivalent

G&A

general and administrative

MBD

thousands of barrels per day

GAAP

generally accepted accounting

MCF

thousand cubic feet

principles

MBOD

thousand barrels of oil per day

LIFO

last-in, first-out

million

NPNS

normal purchase normal sale

MMBOE

million barrels of oil equivalent

PP&E

properties, plants and equipment

MMBOD

million barrels of oil per day

SAB

staff accounting bulletin

MBOED

thousands of barrels of oil

VIE

variable interest entity

MMBOED

equivalent per day

millions of barrels of oil

equivalent per day

MMBTU

million British thermal units

Miscellaneous

MMCFD

million cubic feet per day

EPA

Environmental Protection Agency

ESG

Environmental, Social and

Corporate Governance

Industry

European Union

CBM

coalbed methane

FERC

Federal Energy Regulatory

E&P

exploration and production

Commission

FEED

front-end engineering and design

GHG

greenhouse gas

FPS

floating production system

HSE

health, safety and environment

FPSO

floating production, storage and

ICC

International Chamber of

offloading

Commerce

G&G

geological and geophysical

ICSID

World Bank’s

International

JOA

joint operating agreement

Centre for Settlement of

LNG

liquefied natural gas

Investment Disputes

NGLs

natural gas liquids

IRS

Internal Revenue Service

OPEC

Organization of Petroleum

OTC

over-the-counter

Exporting Countries

NYSE

New York Stock Exchange

PSC

production sharing contract

SEC

U.S. Securities and Exchange

PUDs

proved undeveloped reserves

Commission

SAGD

steam-assisted gravity drainage

TSR

total shareholder return

WCS

Western Canada Select

U.K.

United Kingdom

WTI

West Texas

Intermediate

U.S.

United States of America

PART

FINANCIAL INFORMATION

Item 1.

FINANCIAL STATEMENTS

Consolidated Income Statement

ConocoPhillips

Millions of Dollars

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Revenues and Other Income

Sales and other operating revenues

9,556

2,749

19,382

8,907

Equity in earnings of affiliates

139

261

311

Gain on dispositions

596

292

554

Other income (loss)

457

594

835

(945)

Total Revenues and

Other Income

10,211

4,016

20,770

8,827

Costs and Expenses

Purchased commodities

2,998

1,130

7,481

3,791

Production and operating expenses

1,379

1,047

2,762

2,220

Selling, general and administrative expenses

117

156

428

153

Exploration expenses

141

285

Depreciation, depletion and amortization

1,867

1,158

3,753

2,569

Impairments

(2)

(1)

519

Taxes other than income

taxes

381

141

751

391

Accretion on discounted liabilities

125

133

Interest and debt expense

220

202

446

404

Foreign currency transaction (gain) loss

(83)

Other expenses

(7)

(13)

Total Costs and Expenses

7,131

3,995

15,976

10,369

Income (loss) before income taxes

3,080

4,794

(1,542)

Income tax provision (benefit)

989

(257)

1,721

(109)

Net income (loss)

2,091

278

3,073

(1,433)

Less: net income attributable to noncontrolling interests

(18)

(46)

Net Income (Loss) Attributable to ConocoPhillips

2,091

260

3,073

(1,479)

Net Income (Loss) Attributable to ConocoPhillips Per Share

of Common Stock

(dollars)

Basic

1.55

0.24

2.32

(1.37)

Diluted

1.55

0.24

2.31

(1.37)

Average Common

Shares Outstanding

(in thousands)

Basic

1,348,637

1,076,659

1,324,639

1,080,610

Diluted

1,353,201

1,077,606

1,329,507

1,080,610

See Notes to Consolidated Financial Statements.

Consolidated Statement of Comprehensive Income

ConocoPhillips

Millions of Dollars

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Net Income (Loss)

2,091

278

3,073

(1,433)

Other comprehensive income (loss)

Defined benefit plans

Reclassification adjustment for amortization of prior

service credit included in net income (loss)

(10)

(8)

(19)

(16)

Net actuarial gain arising during the period

105

Reclassification adjustment for amortization of net actuarial

losses included in net income (loss)

Income taxes on defined benefit plans

(19)

(3)

(40)

(7)

Defined benefit plans, net of tax

134

Unrealized holding gain (loss) on securities

(1)

Income taxes on unrealized holding gain on securities

(2)

(1)

Unrealized holding gain (loss) on securities, net of tax

(1)

Foreign currency translation adjustments

309

165

(490)

Income taxes on foreign currency translation adjustments

Foreign currency translation adjustments, net of tax

309

165

(488)

Other Comprehensive Income (Loss), Net of

Tax

160

320

298

(468)

Comprehensive Income (Loss)

2,251

598

3,371

(1,901)

Less: comprehensive income attributable to noncontrolling interests

(18)

(46)

Comprehensive Income (Loss) Attributable to

ConocoPhillips

2,251

580

3,371

(1,947)

See Notes to Consolidated Financial Statements.

Consolidated Balance Sheet

ConocoPhillips

Millions of Dollars

June 30

December 31

2021

2020

Assets

Cash and cash equivalents

6,608

2,991

Short-term investments

2,251

3,609

Accounts and notes receivable (net of allowance of $

and $

, respectively)

4,401

2,634

Accounts and notes receivable—related parties

123

120

Investment in Cenovus Energy

1,802

1,256

Inventories

1,138

1,002

Prepaid expenses and other current assets

849

454

Total Current Assets

17,172

12,066

Investments and long-term receivables

8,013

8,017

Loans and advances—related parties

114

Net properties, plants and equipment

(net of accumulated DD&A of $

65,572

and $

62,213

, respectively)

57,717

39,893

Other assets

2,442

2,528

Total Assets

85,403

62,618

Liabilities

Accounts payable

3,591

2,669

Accounts payable—related parties

Short-term debt

1,205

619

Accrued income and other taxes

1,406

320

Employee benefit obligations

571

608

Other accruals

1,355

1,121

Total Current Liabilities

8,150

5,366

Long-term debt

18,805

14,750

Asset retirement obligations and accrued environmental costs

5,819

5,430

Deferred income taxes

5,331

3,747

Employee benefit obligations

1,297

1,697

Other liabilities and deferred credits

1,725

1,779

Total Liabilities

41,127

32,769

Equity

Common stock (

2,500,000,000

shares authorized at $

0.01

par value)

Issued (2021—

2,087,542,804

shares; 2020—

1,798,844,267

shares)

Par value

Capital in excess of par

60,337

47,133

Treasury stock (at cost: 2021—

748,460,721

shares; 2020—

730,802,089

shares)

(48,278)

(47,297)

Accumulated other comprehensive loss

(4,920)

(5,218)

Retained earnings

37,116

35,213

Total Equity

44,276

29,849

Total Liabilities and Equity

85,403

62,618

See Notes to Consolidated Financial Statements.

Consolidated Statement of Cash Flows

ConocoPhillips

Millions of Dollars

Six Months Ended

June 30

2021

2020

Cash Flows From Operating Activities

Net income (loss)

3,073

(1,433)

Adjustments to reconcile net income (loss) to net cash provided by operating

activities

Depreciation, depletion and amortization

3,753

2,569

Impairments

(1)

519

Dry hole costs and leasehold impairments

Accretion on discounted liabilities

125

133

Deferred taxes

567

(320)

Undistributed equity earnings

317

404

Gain on dispositions

(292)

(554)

(Gain) loss on investment in Cenovus Energy

(726)

1,140

Other

(688)

(244)

Working

capital adjustments

Decrease (increase) in accounts and notes receivable

(794)

1,746

Increase in inventories

(89)

(27)

Increase in prepaid expenses and other current assets

(388)

(149)

Increase (decrease) in accounts payable

323

(754)

Increase (decrease) in taxes and other accruals

1,144

(838)

Net Cash Provided by Operating Activities

6,331

2,262

Cash Flows From Investing Activities

Cash acquired from Concho

382

Capital expenditures and investments

(2,465)

(2,525)

Working

capital changes associated with investing activities

(251)

Proceeds from asset dispositions

160

1,313

Net sales (purchases) of investments

1,302

(1,030)

Collection of advances/loans—related parties

Other

(35)

Net Cash Used in Investing Activities

(481)

(2,462)

Cash Flows From Financing Activities

Repayment of debt

(44)

(214)

Issuance of company common stock

(25)

Repurchase of company common stock

(981)

(726)

Dividends paid

(1,171)

(913)

Other

(28)

Net Cash Used in Financing Activities

(2,218)

(1,879)

Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash

(93)

Net Change in Cash, Cash Equivalents and Restricted Cash

3,641

(2,172)

Cash, cash equivalents and restricted cash at beginning of period

3,315

5,362

Cash, Cash Equivalents and Restricted Cash at End of Period

6,956

3,190

Restricted cash of $

million and $

253

million are included in the "Prepaid expenses and other current assets" and "Other assets" lines,

respectively, of our Consolidated Balance Sheet as of June 30, 2021.

Restricted cash of $

million and $

230

million are included in the "Prepaid expenses and other current assets" and "Other assets" lines,

respectively, of our Consolidated Balance Sheet as of December 31, 2020.

See Notes to Consolidated Financial Statements.

Notes to Consolidated Financial Statements

ConocoPhillips

Note 1—Basis of Presentation

The interim-period financial information

presented in the financial statements included

in this report is

unaudited and, in the opinion of management,

includes all known accruals and adjustments

necessary for a fair

presentation of the consolidated financial position

of ConocoPhillips and its results of operations

and cash

flows for such periods.

All such adjustments are of a normal and recurring

nature unless otherwise disclosed.

Certain notes and other information have been

condensed or omitted from the interim

financial statements

included in this report.

Therefore, these financial statements should

be read in conjunction with the

consolidated financial statements and notes included

in our 2020 Annual Report on Form

10-K.

Note 2—Inventories

Inventories consisted of the following:

Millions of Dollars

June 30

December 31

2021

2020

Crude oil and natural gas

572

461

Materials and supplies

566

541

1,138

1,002

Inventories valued on the LIFO basis totaled

348

million and $

282

million at June 30, 2021 and December

31, 2020, respectively.

Note 3—Acquisitions and Dispositions

Acquisition of

Concho Resources Inc.

(Concho)

We completed our acquisition of Concho on

January 15, 2021

and as defined under the terms of the

transaction

agreement, each share of Concho common stock

was exchanged for

1.46

shares of ConocoPhillips common

stock, for total consideration of $

13.1

billion.

Total Consideration

Number of shares of Concho common stock

issued and outstanding (in thousands)*

194,243

Number of shares of Concho stock awards outstanding

(in thousands)*

1,599

Number of shares exchanged

195,842

Exchange ratio

1.46

Additional shares of ConocoPhillips common stock

issued as consideration (in thousands)

285,929

Average price per share of ConocoPhillips common stock**

45.9025

Total Consideration (Millions)

13,125

*Outstanding as of January 15, 2021.

**Based on the ConocoPhillips average stock price on January

15, 2021.

The transaction was accounted for as a business

combination under FASB ASC 805 using the acquisition

method, which requires assets acquired and liabilities

assumed to be measured at their acquisition date fair

values.

Fair value measurements were made for acquired

assets and liabilities, and adjustments to those

measurements may be made in subsequent periods,

up to one year from the acquisition date as

we identify new

information about facts and circumstances that existed

as of the acquisition date to consider.

Oil and gas

properties were valued using a discounted cash

flow approach incorporating market participant

and internally

generated price assumptions;

production profiles;

and operating and development cost assumptions.

Debt

assumed in the acquisition was valued based on

observable market prices.

The fair values determined for

accounts receivables, accounts payable, and most

other current assets and current liabilities

were equivalent to

the carrying value due to their short-term

nature.

The total consideration of $

13.1

billion was allocated to the

identifiable assets and liabilities based on their

fair values as of January 15, 2021.

Assets Acquired

Millions of Dollars

Cash and cash equivalents

382

Accounts receivable, net

742

Inventories

Prepaid expenses and other current assets

Investments and long-term receivables

333

Net properties, plants and equipment

18,971

Other assets

Total assets acquired

20,572

Liabilities Assumed

Accounts payable

638

Accrued income and other taxes

Employee benefit obligations

Other accruals

510

Long-term debt

4,696

Asset retirement obligations and accrued environmental

costs

310

Deferred income taxes

1,123

Other liabilities and deferred credits

117

Total liabilities assumed

7,447

Net assets acquired

13,125

With the completion of the Concho transaction, we acquired proved

and unproved properties of approximately

11.8

billion and $

6.9

billion, respectively.

We recognized approximately $

157

million of transaction-related costs that

were expensed in the first quarter

of 2021.

These non-recurring costs related primarily

to fees paid to advisors and the settlement of

share-based

awards for certain Concho employees based

on the terms of the Merger Agreement.

In the first quarter of 2021, we commenced a restructuring

program,

the scope of which included combining

the operations of the two companies.

For the three-

and six-month periods ending June 30, 2021,

recognized non-recurring restructuring costs mainly

for employee severance and related incremental pension

benefit costs of approximately $

million and $

157

million, respectively.

The impact from these transaction and restructuring

costs to the lines of our consolidated income statement

for

the six-month period ending June 30, 2021, are below:

Millions of Dollars

Transaction Cost

Restructuring Cost

Total Cost

Production and operating expenses

Selling, general and administration expenses

135

187

Exploration expenses

Taxes other than income taxes

Other expenses

157

314

On February 8, 2021, we completed a debt exchange

offer related to the debt assumed from Concho.

As a

result of the debt exchange, we recognized an additional

income tax related restructuring charge of $

million.

See Note 18 for additional information.

From the acquisition date through June 30, 2021,

“Total Revenues and Other Income” and “Net Income (Loss)

Attributable to ConocoPhillips” associated with the

acquired Concho business were approximately

2,637

million and $

828

million, respectively.

The results associated with the Concho business

include a before- and

after-tax loss of $

305

million and $

233

million, respectively, on the acquired derivative contracts.

The before-

tax loss is recorded within “Total Revenues and Other Income” on our consolidated

income statement.

See

Note 10 for additional information.

The following summarizes the unaudited supplemental

pro forma financial information as if we had completed

the acquisition of Concho on January 1, 2020:

Millions of Dollars

Supplemental Pro Forma (unaudited)

Three Months Ended

June 30, 2020

Six Months Ended

June 30, 2020

Total revenues and other income

4,065

11,365

Net loss

(229)

(619)

Net loss attributable to ConocoPhillips

(247)

(665)

$ per share

Earnings per share:

Three Months Ended

June 30, 2020

Six Months Ended

June 30, 2020

Basic net loss

(0.18)

(0.49)

Diluted net loss

(0.18)

(0.49)

The unaudited supplemental pro forma financial

information is presented for illustration purposes

only and is

not necessarily indicative of the operating results

that would have occurred had the transaction been

completed

on January 1, 2020, nor is it necessarily indicative

of future operating results of the combined entity.

The

unaudited pro forma financial information

for the three-

and six-month periods ending June 30, 2020 is a result

of combining the consolidated income statement

of ConocoPhillips with the results of Concho.

The pro forma

results do not include transaction-related costs,

nor any cost savings anticipated as a result

of the transaction.

The pro forma results include adjustments to

reverse impairment expense of $

10.5

billion and $

1.9

billion

recorded by Concho in the six-month period ending

June 30, 2020, related to oil and gas properties

and

goodwill, respectively.

Other adjustments made relate primarily to

DD&A, which is based on the unit-of-

production method, resulting from the purchase

price allocated to properties, plants and equipment.

believe the estimates and assumptions are reasonable,

and the relative effects of the transaction are properly

reflected.

Assets Sold

In 2020, we completed the sale of our Australia-West asset and operations.

The sales agreement entitled us to

a $

200

million payment upon a final investment

decision (FID) of the Barossa development

project.

On March

30, 2021, FID was announced and as such,

we recognized a $

200

million gain on disposition in the first

quarter

of 2021.

The purchaser failed to pay the FID bonus when

due.

We have commenced an arbitration proceeding

against the purchaser to enforce our contractual right

to the $

200

million, plus interest accruing from the due

date.

Results of operations related to this transaction

are reflected in our Asia Pacific segment.

See Note 9 for

additional information.

In 2017, we completed the sale of our

percent nonoperated interest in the Foster Creek

Christina Lake

(FCCL) Partnership, as well as the majority of

our western Canada gas assets to Cenovus Energy (CVE).

Consideration for the transaction included a five-year, uncapped contingent payment. The contingent payment,

calculated on a quarterly basis, is $6 million CAD for every $1 CAD by which the WCS quarterly average

crude price exceeds $52 CAD per barrel

. For the three- and six-months ended June

30, 2021, we recorded

contingent payments of $

million and $

million, respectively.

contingent payments were recorded in

2020.

Contingent payments are recorded as gain on dispositions

on our consolidated income statement and

reflected in our Canada segment.

Planned Dispositions

In July 2021, we entered into divestiture agreements

to sell our interests in certain noncore assets

in our Lower

48 segment.

Proceeds from these agreements total approximately

0.2

billion before customary adjustments.

The transactions are expected to close in the third

quarter of 2021.

Note 4—Investments, Loans and Long-Term Receivables

Australia Pacific LNG Pty Ltd (APLNG)

APLNG executed project financing agreements

for an $

8.5

billion project finance facility in 2012.

All

amounts were drawn from the facility.

The project financing facility has been restructured

over time and at

June 30, 2021, this facility was composed of a financing

agreement with the Export-Import Bank of

the United

States, a commercial bank facility and two

United States Private Placement note facilities.

APLNG made its

first principal and interest repayment in March

2017 and is scheduled to make bi-annual payments

until

September 2030.

At June 30, 2021, a balance of $

6.0

billion was outstanding on the current

facilities.

See

Note 8 for additional information.

During the fourth quarter of 2020, the estimated

fair value of our investment in APLNG declined

to an amount

below carrying value, primarily due to the weakening

of the U.S. dollar relative to the Australian

dollar.

Based

on a review of the facts and circumstances surrounding

this decline in fair value, we concluded the impairment

was not other than temporary under the guidance

of FASB ASC Topic

323, “Investments – Equity Method and

Joint Ventures.”

Due primarily to improved outlooks for

commodity prices and the strengthening of the

U.S.

dollar relative to the Australian dollar during the first

six months of 2021, the estimated fair

value of our

investment increased and is above carrying value

at June 30, 2021.

We will continue to monitor the

relationship between the carrying value and fair

value of APLNG.

At June 30, 2021, the carrying value of our equity

method investment in APLNG was

6.4

billion.

The

balance is included in the “Investments and long-term

receivables” line on our consolidated balance

sheet.

Loans and Long-Term Receivables

As part of our normal ongoing business operations,

and consistent with industry practice,

we enter into

numerous agreements with other parties to pursue

business opportunities.

Included in such activity are loans

made to certain affiliated and non-affiliated companies.

At June 30, 2021, significant loans to affiliated

companies included $

168

million in project financing to Qatar Liquefied

Gas Company Limited (3).

On our consolidated balance sheet, the long-term

portion of these loans is included in the “Loans

and

advances—related parties” line, while the short-term

portion is in the “Accounts and notes receivable—related

parties” line.

Note 5—Investment in Cenovus Energy

Our investment in CVE shares is carried on our

consolidated balance sheet at fair value of

1.8

billion based

on the closing price of $

9.58

per share on the NYSE on the last trading day of

the quarter.

At June 30, 2021

and December 31, 2020, we held

188

million and

208

million shares of CVE common

stock, respectively.

June 30, 2021, our investment approximated

9.3

percent of the issued and outstanding CVE common

stock.

During the second quarter, we sold

million shares of our CVE common stock, recognizing

proceeds of $

180

million, of which $

166

was received in the second quarter.

Subject to market conditions, we intend to

continue to decrease our investment over time.

All gains and losses are recognized within “Other income

(loss)” on our consolidated income statement.

Proceeds related to the sale of our CVE shares

are presented within “Cash Flows from

Investing Activities” on

our consolidated cash flow statement.

See Note 11 for additional information related to fair value

measurement.

Gains and losses recorded in other income (loss)

for our investment in CVE were:

Millions of Dollars

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Total net gain (loss) on equity securities

418

551

726

(1,140)

Less: Net gain on equity securities sold during

the period

(31)

(60)

Unrealized gain (loss) on equity securities still

held at

the reporting date

387

551

666

(1,140)

Note 6—Debt

Our debt balance at June 30, 2021, was $

20.0

billion compared with $

15.4

billion at December 31, 2020.

On January 15, 2021, we completed the acquisition

of Concho in an all-stock transaction.

In the acquisition,

we assumed Concho’s publicly traded debt, with an outstanding principal

balance of $

3.9

billion, which was

recorded at fair value of $

4.7

billion on the acquisition date.

Debt assumed consisted of the following:

●

3.75

% Notes due

2027

with principal of $

1,000

million

●

4.3

% Notes due

2028

with principal of $

1,000

million

●

2.4

% Notes due

2031

with principal of $

500

million

●

4.875

% Notes due

2047

with principal of $

800

million

●

4.85

% Notes due

2048

with principal of $

600

million

The adjustment to fair value of the senior notes

of approximately $

0.8

billion on the acquisition date will be

amortized as an adjustment to interest expense over

the remaining contractual terms of the

senior notes.

In the first quarter of 2021, we completed a debt

exchange offer related to the debt assumed from Concho.

the approximately $

3.9

billion in aggregate principal amount of Concho’s senior notes

offered in the exchange,

percent, or approximately $

3.8

billion, were tendered and accepted.

The new debt issued by

ConocoPhillips had the same interest rates

and maturity dates as the Concho senior notes.

The portion not

exchanged, approximately $

million, remained outstanding across five series

of senior notes issued by

Concho.

The debt exchange was treated as a debt modification

for accounting purposes resulting in a portion

of the unamortized fair value adjustment of the Concho

senior notes allocated to the new debt

issued by

ConocoPhillips on the settlement date of the exchange.

The new debt issued in the exchange is fully

and

unconditionally guaranteed by ConocoPhillips

Company.

See Note 3 for additional information on our

Concho acquisition.

We have a revolving credit facility totaling $

6.0

billion with an expiration date of

May 2023

Our revolving

credit facility may be used for direct bank borrowings,

the issuance of letters of credit totaling

up to $

500

million, or as support for our commercial paper

program.

The revolving credit facility is broadly syndicated

among financial institutions and does not contain

any material adverse change provisions or any covenants

requiring maintenance of specified financial

ratios or credit ratings.

The facility agreement contains a cross-

default provision relating to the failure to pay principal

or interest on other debt obligations of $

200

million or

more by ConocoPhillips, or any of its consolidated

subsidiaries.

The amount of the facility is not subject to

redetermination prior to its expiration date.

Credit facility borrowings may bear interest at

a margin above rates offered by certain designated banks in the

London interbank market or at a margin above the overnight

federal funds rate or prime rates offered by

certain designated banks in the U.S.

The facility agreement calls for commitment

fees on available, but

unused, amounts.

The facility agreement also contains early

termination rights if our current directors or

their

approved successors cease to be a majority of

the Board of Directors.

The revolving credit facility supports our ability

to issue up to $

6.0

billion of commercial paper.

Commercial

paper is generally limited to

maturities of 90 days

and is included in the short-term debt on our consolidated

balance sheet. With $

300

million of commercial paper outstanding and

direct borrowings or letters of

credit, we had access to $

5.7

billion in available borrowing capacity under our revolving

credit facility at June

30, 2021.

At December 31, 2020, we had $

300

million of commercial paper outstanding

and

direct

borrowings or letters of credit issued.

In January 2021, Fitch affirmed its rating of our long-term debt as “A” with a “stable” outlook and affirmed its

rating of our short-term debt as “F1+.” On January 25, 2021, S&P revised its industry risk assessment of the

E&P industry to “Moderately High” from “Intermediate” based on a view of increasing risks from the energy

transition, price volatility, and weaker profitability. On February 11, 2021, S&P downgraded its rating of our

long-term debt from “A” to “A-” with a “stable” outlook and downgraded its rating of our short-term debt

from “A-1” to “A-2.” In May 2021, Moody’s affirmed its rating of our senior long-term debt of “A3” with a

“stable” outlook. Moody’s rates our short-term debt as “Prime-2.” We do not have any ratings triggers on any

of our corporate debt that would cause an automatic default, and thereby impact our access to liquidity, upon

downgrade of our credit ratings. If our credit ratings are downgraded from their current levels, it could

increase the cost of corporate debt available to us and restrict our access to the commercial paper markets. If

our credit rating were to deteriorate to a level prohibiting us from accessing the commercial paper market, we

would still be able to access funds under our revolving credit facility

At June 30, 2021, we had $

283

million of certain variable rate demand bonds (VRDBs)

outstanding with

maturities ranging through 2035.

The VRDBs are redeemable at the option of the

bondholders on any business

day.

If they are ever redeemed, we have the ability

and intent to refinance on a long-term basis,

therefore, the

VRDBs are included in the “Long-term debt” line

on our consolidated balance sheet.

Note 7—Changes in Equity

Millions of Dollars

Attributable to ConocoPhillips

Common Stock

Par

Value

Capital in

Excess of

Par

Treasury

Stock

Accum. Other

Comprehensive

Income (Loss)

Retained

Earnings

Non-

Controlling

Interests

Total

For the three months ended June 30, 2021

Balances at March 31, 2021

60,278

(47,672)

(5,080)

35,608

43,155

Net income

2,091

Other comprehensive income

160

Dividends paid ($

0.43

per common share)

(583)

Repurchase of company common stock

(606)

Distributed under benefit plans

Balances at June 30, 2021

60,337

(48,278)

(4,920)

37,116

44,276

For the six months ended June 30,

2021

Balances at December 31, 2020

47,133

(47,297)

(5,218)

35,213

29,849

Net income

3,073

Other comprehensive income

298

Dividends paid ($

0.86

per common share)

(1,171)

Acquisition of Concho

13,122

13,125

Repurchase of company common stock

(981)

Distributed under benefit plans

Other

Balances at June 30, 2021

60,337

(48,278)

(4,920)

37,116

44,276

Millions of Dollars

Attributable to ConocoPhillips

Common Stock

Par

Value

Capital in

Excess of

Par

Treasury

Stock

Accum. Other

Comprehensive

Income (Loss)

Retained

Earnings

Non-

Controlling

Interests

Total

For the three months ended June 30, 2020

Balances at March 31, 2020

47,027

(47,130)

(6,145)

37,545

31,387

Net income

260

278

Other comprehensive income

320

Dividends paid ($

0.42

per common share)

(455)

Distributions to noncontrolling interests and

other

(6)

Dispositions

(84)

Distributed under benefit plans

Other

Balances at June 30, 2020

47,079

(47,130)

(5,825)

37,351

31,493

For the six months ended June 30,

2020

Balances at December 31, 2019

46,983

(46,405)

(5,357)

39,742

35,050

Net income

(1,479)

(1,433)

Other comprehensive loss

(468)

Dividends paid ($

0.84

per common share)

(913)

Repurchase of company common stock

(726)

Distributions to noncontrolling interests and

other

(32)

Dispositions

(84)

Distributed under benefit plans

Other

Balances at June 30, 2020

47,079

(47,130)

(5,825)

37,351

31,493

Note 8—Guarantees

At June 30, 2021, we were liable for certain

contingent obligations under various contractual

arrangements as

described below.

We recognize a liability, at inception, for the fair value of our obligation as a guarantor for

newly issued or modified guarantees.

Unless the carrying amount of the liability is noted

below, we have not

recognized a liability because the fair value of the

obligation is immaterial.

In addition, unless otherwise

stated, we are not currently performing with any

significance under the guarantee and expect future

performance to be either immaterial or have only

a remote chance of occurrence.

APLNG Guarantees

At June 30, 2021, we had outstanding multiple

guarantees in connection with our

37.5

percent ownership

interest in APLNG.

The following is a description of the guarantees

with values calculated utilizing June 2021

exchange rates:

●

During the third quarter of 2016, we issued a guarantee

to facilitate the withdrawal of our pro-rata

portion of the funds in a project finance reserve

account.

We estimate the remaining term of this

guarantee is

10 years

Our maximum exposure under this guarantee is

approximately $

170

million

and may become payable if an enforcement action

is commenced by the project finance lenders

against APLNG.

At June 30, 2021, the carrying value of this

guarantee was $

million.

●

In conjunction with our original purchase of an ownership

interest in APLNG from Origin Energy in

October 2008, we agreed to reimburse Origin

Energy for our share of the existing contingent liability

arising under guarantees of an existing obligation

of APLNG to deliver natural gas under several

sales

agreements with remaining terms of

1 to 21 years

Our maximum potential liability for future

payments, or cost of volume delivery, under these guarantees is estimated

to be $

710

million ($

1.3

billion in the event of intentional or reckless breach)

and would become payable if APLNG fails

meet its obligations under these agreements and

the obligations cannot otherwise be mitigated.

Future

payments are considered unlikely, as the payments, or cost of volume delivery, would only be

triggered if APLNG does not have enough natural

gas to meet these sales commitments and if

the

co-venturers do not make necessary equity contributions

into APLNG.

●

We have guaranteed the performance of APLNG with regard to certain other contracts

executed in

connection with the project’s continued development.

The guarantees have remaining terms

16 to

24 years or the life of the venture

Our maximum potential amount of future payments

related to these

guarantees is approximately $

180

million and would become payable if APLNG

does not perform.

June 30, 2021, the carrying value of these guarantees

was $

million.

Other Guarantees

We have other guarantees with maximum future potential payment amounts totaling approximately

740

million, which consist primarily of guarantees

of the residual value of leased office buildings, guarantees

of the

residual value of corporate aircrafts, and a guarantee

for our portion of a joint venture’s project finance reserve

accounts.

These guarantees have remaining terms of

two to five years

and would become payable if certain

asset values are lower than guaranteed amounts

at the end of the lease or contract term, business

conditions

decline at guaranteed entities, or as a result of nonperformance

of contractual terms by guaranteed parties.

June 30, 2021, the carrying value of these guarantees

was $

million.

Indemnifications

Over the years, we have entered into agreements

to sell ownership interests in certain

legal entities, joint

ventures and assets that gave rise to qualifying

indemnifications.

These agreements include indemnifications

for taxes and environmental liabilities.

Most of these indemnifications are related to

tax issues and the

majority of these expire in 2021.

Those related to environmental issues have terms

that are generally indefinite

and the maximum amounts of future payments are

generally unlimited.

See Note 9 for additional information

about environmental liabilities.

The carrying amount recorded for these indemnification

obligations at June

30, 2021, was $

million.

We amortize the indemnification liability over the relevant time period the

indemnity is in effect, if one exists, based on the facts

and circumstances surrounding each type of indemnity.

In cases where the indemnification term is

indefinite, we will reverse the liability when

we have information

the liability is essentially relieved or amortize

the liability over an appropriate time period

as the fair value of

our indemnification exposure declines.

Although it is reasonably possible future payments

may exceed

amounts recorded, due to the nature of the indemnifications,

it is not possible to make a reasonable estimate

the maximum potential amount of future payments.

Note 9—Contingencies and Commitments

A number of lawsuits involving a variety of claims

arising in the ordinary course of business

have been filed

against ConocoPhillips.

We also may be required to remove or mitigate the effects on the environment of the

placement, storage, disposal or release of certain

chemical, mineral and petroleum substances at

various active

and inactive sites.

We regularly assess the need for accounting recognition or disclosure of these

contingencies.

In the case of all known contingencies (other

than those related to income taxes), we accrue

liability when the loss is probable and the amount

is reasonably estimable.

If a range of amounts can be

reasonably estimated and no amount within the range

is a better estimate than any other amount,

then the low

end of the range is accrued.

We do not reduce these liabilities for potential insurance or third-party recoveries.

We accrue receivables for insurance or other third-party recoveries when applicable.

With respect to income

tax-related contingencies, we use a cumulative probability-weighted

loss accrual in cases where sustaining a

tax position is less than certain.

Based on currently available information, we believe

it is remote that future costs related to known

contingent

liability exposures will exceed current accruals by

an amount that would have a material adverse

impact on our

consolidated financial statements.

As we learn new facts concerning contingencies,

we reassess our position

both with respect to accrued liabilities

and other potential exposures.

Estimates particularly sensitive to future

changes include contingent liabilities

recorded for environmental remediation, tax and legal

matters.

Estimated future environmental remediation

costs are subject to change due to such factors

as the uncertain

magnitude of cleanup costs, the unknown time

and extent of such remedial actions that

may be required, and

the determination of our liability in proportion

to that of other responsible parties.

Estimated future costs

related to tax and legal matters are subject to

change as events evolve and as additional

information becomes

available during the administrative and litigation

processes.

Environmental

We are subject to international, federal, state and local environmental laws and regulations

and record accruals

for environmental liabilities based on management’s best estimates.

These estimates are based on currently

available facts, existing technology, and presently enacted laws and regulations,

taking into account

stakeholder and business considerations.

When measuring environmental liabilities,

we also consider our prior

experience in remediation of contaminated sites,

other companies’ cleanup experience, and data released

the U.S. EPA or other organizations.

We consider unasserted claims in our determination of environmental

liabilities, and we accrue them in the period they

are both probable and reasonably estimable.

Although liability of those potentially responsible

for environmental remediation costs is generally

joint and

several for federal sites and frequently so for other

sites, we are usually only one of many companies

cited at a

particular site.

Due to the joint and several liabilities, we could

be responsible for all cleanup costs related

any site at which we have been designated as a

potentially responsible party.

We have been successful to date

in sharing cleanup costs with other financially

sound companies.

Many of the sites at which we are potentially

responsible are still under investigation by the

EPA or the agency concerned.

Prior to actual cleanup, those

potentially responsible normally assess the

site conditions, apportion responsibility and determine

the

appropriate remediation.

In some instances, we may have no liability

or may attain a settlement of liability.

Where it appears that other potentially responsible

parties may be financially unable to bear their

proportional

share, we consider this inability in estimating

our potential liability, and we adjust our accruals accordingly.

As a result of various acquisitions in the past,

we assumed certain environmental obligations.

Some of these

environmental obligations are mitigated by indemnifications

made by others for our benefit, and some of the

indemnifications are subject to dollar limits

and time limits.

We are currently participating in environmental assessments and cleanups at numerous

federal Superfund and

comparable state and international sites.

After an assessment of environmental exposures

for cleanup and

other costs, we make accruals on an undiscounted

basis (except those acquired in a purchase

business

combination, which we record on a discounted

basis) for planned investigation and remediation

activities for

sites where it is probable future costs will be incurred

and these costs can be reasonably estimated.

We have

not reduced these accruals for possible insurance recoveries.

At June 30, 2021, our balance sheet included a total

environmental accrual of $

188

million, compared with

180

million at December 31, 2020, for remediation

activities in the U.S. and Canada.

We expect to incur a

substantial amount of these expenditures within

the next

30 years

In the future, we may be involved in

additional environmental assessments, cleanups

and proceedings.

Litigation and Other Contingencies

We are subject to various lawsuits and claims including but not limited to matters

involving oil and gas royalty

and severance tax payments, gas measurement and

valuation methods, contract disputes,

environmental

damages, climate change, personal injury, and property damage.

Our primary exposures for such matters

relate to alleged royalty and tax underpayments

on certain federal, state and privately owned

properties, claims

of alleged environmental contamination from

historic operations, and other contract disputes.

We will

continue to defend ourselves vigorously in these matters.

Our legal organization applies its knowledge, experience

and professional judgment to the specific

characteristics of our cases, employing a litigation

management process to manage and monitor the

legal

proceedings against us.

Our process facilitates the early evaluation and

quantification of potential exposures in

individual cases.

This process also enables us to track those cases that

have been scheduled for trial and/or

mediation.

Based on professional judgment and experience

in using these litigation management tools and

available information about current developments

in all our cases, our legal organization regularly assesses

the

adequacy of current accruals and determines if

adjustment of existing accruals, or establishment

of new

accruals, is required.

We have contingent liabilities resulting from throughput agreements with pipeline and

processing companies

not associated with financing arrangements.

Under these agreements, we may be required

to provide any such

company with additional funds through advances

and penalties for fees related to throughput capacity

not

utilized.

In addition, at June 30, 2021, we had performance

obligations secured by letters of credit of

222

million (issued as direct bank letters of

credit) related to various purchase commitments

for materials,

supplies, commercial activities and services incident

to the ordinary conduct of business.

In 2007, ConocoPhillips was unable to reach agreement

with respect to the empresa mixta structure

mandated

by the Venezuelan government’s Nationalization Decree.

As a result, Venezuela’s

national oil company,

Petróleos de Venezuela, S.A. (PDVSA), or its affiliates, directly assumed control over ConocoPhillips’

interests in the Petrozuata and Hamaca heavy oil

ventures and the offshore Corocoro development project.

response to this expropriation, ConocoPhillips

initiated international arbitration on November 2,

2007, with the

ICSID.

On September 3, 2013, an ICSID arbitration tribunal

held that Venezuela unlawfully expropriated

ConocoPhillips’ significant oil investments

in June 2007.

On January 17, 2017, the Tribunal reconfirmed the

decision that the expropriation was unlawful.

In March 2019, the Tribunal unanimously ordered the

government of Venezuela to pay ConocoPhillips approximately $

8.7

billion in compensation for the

government’s unlawful expropriation of the company’s investments in Venezuela in 2007.

On August 29,

2019, the ICSID Tribunal issued a decision rectifying the award

and reducing it by approximately $

227

million.

The award now stands at $

8.5

billion plus interest.

The government of Venezuela sought annulment

of the award, which automatically stayed enforcement

of the award.

Annulment proceedings are underway.

In 2014, ConocoPhillips filed a separate and independent

arbitration under the rules of the ICC against

PDVSA under the contracts that had established the

Petrozuata and Hamaca projects.

The ICC Tribunal issued

an award in April 2018, finding that PDVSA owed

ConocoPhillips approximately $

billion under their

agreements in connection with the expropriation of the

projects and other pre-expropriation fiscal

measures.

August 2018, ConocoPhillips entered into a settlement with PDVSA to recover the full amount of this ICC

award, plus interest through the payment period, including initial payments totaling approximately $500

million within a period of 90 days from the time of signing of the settlement agreement. The balance of the

settlement is to be paid quarterly over a period of four and a half years.

To date, ConocoPhillips has received

approximately $

754

million.

Per the settlement, PDVSA recognized the ICC

award as a judgment in various

jurisdictions, and ConocoPhillips agreed to suspend

its legal enforcement actions.

ConocoPhillips sent notices

of default to PDVSA on October 14 and November

12, 2019, and to date PDVSA has failed

to cure its breach.

As a result, ConocoPhillips has resumed legal enforcement

actions.

ConocoPhillips has ensured that the

settlement and any actions taken in enforcement

thereof meet all appropriate U.S. regulatory

requirements,

including those related to any applicable sanctions

imposed by the U.S. against Venezuela.

In 2016, ConocoPhillips filed a separate and independent

arbitration under the rules of the ICC against

PDVSA under the contracts that had established the

Corocoro Project.

On August 2, 2019, the ICC Tribunal

awarded ConocoPhillips approximately $

million plus interest under the Corocoro contracts.

ConocoPhillips is seeking recognition and enforcement

of the award in various jurisdictions.

ConocoPhillips

has ensured that all the actions related to the award

meet all appropriate U.S. regulatory requirements,

including those related to any applicable sanctions

imposed by the U.S. against Venezuela.

The Office of Natural Resources Revenue (ONRR) has

conducted audits of ConocoPhillips’

payment of

royalties on federal lands and has issued multiple

orders to pay additional royalties to the federal

government.

ConocoPhillips and the ONRR entered into

a settlement agreement on March 23, 2021,

to resolve the dispute.

All orders and associated appeals have been withdrawn

with prejudice.

Beginning in 2017, cities, counties, governments

and other entities in several states in the U.S. have

filed

lawsuits against oil and gas companies, including

ConocoPhillips, seeking compensatory damages

and

equitable relief to abate alleged climate change impacts.

Additional lawsuits with similar allegations

are

expected to be filed.

The amounts claimed by plaintiffs are unspecified and

the legal and factual issues

involved in these cases are unprecedented.

ConocoPhillips believes these lawsuits are factually

and legally

meritless and are an inappropriate vehicle to address

the challenges associated with climate

change and will

vigorously defend against such lawsuits.

Several Louisiana parishes and the State of Louisiana

have filed

lawsuits under Louisiana’s State and Local

Coastal Resources Management Act (SLCRMA)

against oil and gas companies, including ConocoPhillips,

seeking compensatory damages for contamination

and erosion of the Louisiana coastline

allegedly caused by

historical oil and gas operations.

ConocoPhillips entities are defendants in

of the lawsuits and will

vigorously defend against them.

Because Plaintiffs’ SLCRMA theories are unprecedented,

there is uncertainty

about these claims (both as to scope and damages)

and we continue to evaluate our exposure in these

lawsuits.

In October 2020, the Bureau of Safety and Environmental

Enforcement (BSEE) ordered the prior owners of

Outer Continental Shelf (OCS) Lease P-0166,

including ConocoPhillips, to decommission

the lease facilities,

including two offshore platforms located near Carpinteria,

California.

This order was sent after the current

owner of OCS Lease P-0166 relinquished the lease

and abandoned the lease platforms and facilities.

BSEE’s

order to ConocoPhillips is premised on its connection

to Phillips Petroleum Company, a legacy company of

ConocoPhillips, which held a historical

percent interest in this lease and operated these

facilities, but sold

its interest approximately

30 years

ago.

ConocoPhillips has not had any connection to

the operation or

production on this lease since that time.

ConocoPhillips is challenging this order.

On May 10, 2021, ConocoPhillips filed

arbitration under the rules of the Singapore International

Arbitration

Centre (SIAC) against Santos KOTN Pty Ltd. and

Santos Limited for their failure to timely

pay the $

200

million bonus due upon a final investment decision

(FID) of the Barossa development project under

the sale

and purchase agreement.

Santos KOTN Pty Ltd. and Santos Limited

have filed a response and counterclaim,

and the arbitration is underway.

Note 10—Derivative and Financial Instruments

We use futures, forwards, swaps and options in various markets to meet our customer

needs, capture market

opportunities and manage foreign exchange currency

risk.

Commodity Derivative Instruments

Our commodity business primarily consists

of natural gas, crude oil, bitumen, LNG and NGLs.

Commodity derivative instruments are held at fair

value on our consolidated balance sheet.

Where these

balances have the right of setoff, they are presented on

a net basis.

Related cash flows are recorded as

operating activities on our consolidated statement

of cash flows.

On our consolidated income statement, gains

and losses are recognized either on a gross basis

if directly related to our physical business

or a net basis if held

for trading.

Gains and losses related to contracts that meet

and are designated with the NPNS exception are

recognized upon settlement.

We generally apply this exception to eligible crude contracts and certain gas

contracts.

We do not apply hedge accounting for our commodity derivatives.

The following table presents the gross fair values

of our commodity derivatives, excluding

collateral, and the

line items where they appear on our consolidated

balance sheet:

Millions of Dollars

June 30

December 31

2021

2020

Assets

Prepaid expenses and other current assets

685

229

Other assets

Liabilities

Other accruals

688

202

Other liabilities and deferred credits

The gains (losses) from commodity derivatives

incurred, and the line items where they appear

on our

consolidated income statement were:

Millions of Dollars

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Sales and other operating revenues

(100)

(50)

(379)

(3)

Other income (loss)

(1)

Purchased commodities

132

145

(2)

On January 15, 2021, we assumed financial derivative

instruments consisting of oil and natural gas

swaps in

connection with the acquisition of Concho.

At the acquisition date, the financial derivative

instruments

acquired were recognized at fair value as a net liability

of $

456

million with settlement dates under the

contracts through December 31, 2022.

During the first quarter of 2021, we recognized

a loss of $

173

million

on Concho derivative contracts with settlement

dates on or before March 31, 2021, and an additional

132

million loss related to all remaining Concho derivative

contracts with settlement dates subsequent

to March 31,

2021, for a total loss of $

305

million.

This loss associated with the acquired financial

instruments is recorded

within the “Sales and other operating revenues”

line on our consolidated income statement.

By the end of March 2021, all oil and natural

gas derivative financial instruments acquired from

Concho were

contractually settled.

In connection with the settlement, we issued

a cash payment of $

692

million in the first

quarter of 2021 and $

million in the second quarter of 2021.

Cash settlements related to the Concho

derivative contracts

are presented within “Cash Flows From

Operating Activities” on our consolidated cash

flow statement.

The table below summarizes our material net exposures

resulting from outstanding commodity

derivative

contracts:

Open Position

Long/(Short)

June 30

December 31

2021

2020

Commodity

Natural gas and power (billions of cubic feet equivalent)

Fixed price

(20)

Basis

(6)

(10)

Financial Instruments

We invest in financial instruments with maturities based on our cash forecasts for

the various accounts and

currency pools we manage.

The types of financial instruments in which we

currently invest include:

●

Time deposits: Interest bearing deposits placed with financial

institutions for a predetermined amount

of time.

●

Demand deposits: Interest bearing deposits placed

with financial institutions.

Deposited funds can be

withdrawn without notice.

●

Commercial paper: Unsecured promissory notes issued

by a corporation, commercial bank or

government agency purchased at a discount to

mature at par.

●

U.S. government or government agency obligations:

Securities issued by the U.S. government

or U.S.

government agencies.

●

Foreign government obligations: Securities

issued by foreign governments.

●

Corporate bonds: Unsecured debt securities

issued by corporations.

●

Asset-backed securities: Collateralized debt securities.

The following investments are carried on our

consolidated balance sheet at cost, plus accrued

interest and the

table reflects remaining maturities at June

30, 2021 and December 31, 2020:

Millions of Dollars

Carrying Amount

Cash and Cash Equivalents

Short-Term Investments

Investments and Long-

Term Receivables

June 30

December 31

June 30

December 31

June 30

December 31

2021

2020

2021

2020

2021

2020

Cash

899

597

Demand Deposits

1,541

1,133

Time Deposits

1 to 90 days

4,104

1,225

1,537

2,859

91 to 180 days

270

448

Within one year

209

One year through five years

U.S. Government Obligations

1 to 90 days

6,560

2,978

2,016

3,320

The following investments in debt securities

classified as available for sale are carried at

fair value on our

consolidated balance sheet at June 30, 2021 and

December 31, 2020:

Millions of Dollars

Carrying Amount

Cash and Cash Equivalents

Short-Term Investments

Investments and Long-Term

Receivables

June 30

December 31

June 30

December 31

June 30

December 31

2021

2020

2021

2020

2021

2020

Major Security Type

Corporate Bonds

105

130

182

143

Commercial Paper

116

155

U.S. Government Obligations

U.S. Government Agency

Obligations

Foreign Government Obligations

Asset-backed Securities

235

289

252

216

Cash and Cash Equivalents and Short-Term Investments have remaining maturities

within one year.

Investments and Long-Term Receivables have remaining maturities

greater than one year through eight years.

The following table summarizes the amortized

cost basis and fair value of investments in

debt securities

classified as available for sale:

Millions of Dollars

Amortized Cost Basis

Fair Value

June 30

December 31

June 30

December 31

2021

2020

2021

2020

Major Security Type

Corporate bonds

286

271

287

273

Commercial paper

164

168

164

168

U.S. government obligations

U.S. government agency obligations

Foreign government obligations

Asset-backed securities

534

516

535

518

At June 30, 2021 and December 31, 2020, total unrealized

losses for debt securities classified as available

for

sale with net losses were negligible.

Additionally, at June 30, 2021 and December 31, 2020, investments

these debt securities in an unrealized loss

position for which an allowance for

credit losses has not been

recorded were negligible.

For the three-

and six-month periods ended June 30, 2021,

proceeds from sales and redemptions of investments

in debt securities classified as available for sale

were $

173

million and $

320

million, respectively.

For the

three-

and six-month periods ended June 30, 2020, proceeds

from sales and redemptions of investments in

debt

securities classified as available for sale were

126

million and $

189

million, respectively.

Gross realized

gains and losses included in earnings from those

sales and redemptions were negligible.

The cost of securities

sold and redeemed is determined using the specific

identification method.

Credit Risk

Financial instruments potentially exposed to concentrations

of credit risk consist primarily of cash equivalents,

short-term investments, long-term investments

in debt securities, OTC derivative contracts and trade

receivables.

Our cash equivalents and short-term investments

are placed in high-quality commercial paper,

government money market funds, government debt

securities, time deposits with major international

banks and

financial institutions, high-quality corporate

bonds,

foreign government obligations and asset-backed

securities.

Our long-term investments in debt securities

are placed in high-quality corporate bonds, U.S.

government and government agency obligations,

asset-backed securities, and time deposits

with major

international banks and financial institutions.

The credit risk from our OTC derivative contracts,

such as forwards, swaps and options, derives

from the

counterparty to the transaction.

Individual counterparty exposure is managed

within predetermined credit

limits and includes the use of cash-call margins when appropriate,

thereby reducing the risk of significant

nonperformance.

We also use futures, swaps and option contracts that have a negligible credit

risk because

these trades are cleared primarily with an exchange

clearinghouse and subject to mandatory margin

requirements until settled; however, we are exposed to the credit

risk of those exchange brokers for receivables

arising from daily margin cash calls, as well as for cash

deposited to meet initial margin requirements.

Our trade receivables result primarily

from our oil and gas operations and reflect a broad

national and

international customer base, which limits our

exposure to concentrations of credit risk.

The majority of these

receivables have payment terms of

30 days

or less, and we continually monitor this exposure

and the

creditworthiness of the counterparties.

We may require collateral to limit the exposure to loss including, letters

of credit, prepayments and surety bonds, as

well as master netting arrangements to mitigate

credit risk with

counterparties that both buy from and sell to

us, as these agreements permit the amounts

owed by us or owed

to others to be offset against amounts due to us.

Certain of our derivative instruments contain provisions that require us to post collateral if the derivative

exposure exceeds a threshold amount. We have contracts with fixed threshold amounts and other contracts

with variable threshold amounts that are contingent on our credit rating. The variable threshold amounts

typically decline for lower credit ratings, while both the variable and fixed threshold amounts typically revert

to zero if we fall below investment grade. Cash is the primary collateral in all contracts; however, many also

permit us to post letters of credit as collateral, such as transactions administered through the New York

Mercantile Exchange.

The aggregate fair value of all derivative

instruments with such credit risk-related contingent

features that were

in a liability position at June 30, 2021 and December

31, 2020, was $

million and $

million, respectively.

For these instruments,

collateral was posted at June 30, 2021 or December

31, 2020.

If our credit rating had

been downgraded below investment grade at June

30, 2021, we would have been required to post

million

of additional collateral, either with cash or letters

of credit.

Note 11—Fair Value

Measurement

We carry a portion of our assets and liabilities at fair value that are measured at the reporting

date using an exit

price (i.e., the price that would be received to sell

an asset or paid to transfer a liability) and disclosed

according to the quality of valuation inputs under

the following hierarchy:

●

Level 1: Quoted prices (unadjusted) in an active

market for identical assets or liabilities.

●

Level 2: Inputs other than quoted prices that

are directly or indirectly observable.

●

Level 3: Unobservable inputs that are significant

to the fair value of assets or liabilities.

The classification of an asset or liability

is based on the lowest level of input significant

to its fair value.

Those

that are initially classified as Level 3 are subsequently

reported as Level 2 when the fair value derived

from

unobservable inputs is inconsequential to the overall

fair value, or if corroborated market data becomes

available.

Assets and liabilities initially reported as Level

2 are subsequently reported as Level 3 if

corroborated market data is no longer available.

There were no material transfers into or

out of Level 3 during

the three- and six-month periods ended June 30, 2021,

nor during the year ended December 31, 2020.

Recurring Fair Value Measurement

Financial assets and liabilities reported at fair

value on a recurring basis primarily include

our investment in

CVE common shares,

our investments in debt securities classified

as available for sale, and commodity

derivatives.

●

Level 1 derivative assets and liabilities primarily

represent exchange-traded futures and options that are

valued using unadjusted prices available from the

underlying exchange.

Level 1 also includes our

investment in common shares of CVE, which is valued

using quotes for shares on the NYSE, and our

investments in U.S. government obligations

classified as available for sale debt securities,

which are

valued using exchange prices.

●

Level 2 derivative assets and liabilities primarily

represent OTC swaps, options and forward purchase

and

sale contracts that are valued using adjusted exchange

prices, prices provided by brokers or pricing

service

companies that are all corroborated by market data.

Level 2 also includes our investments in debt

securities classified as available for sale including

investments in corporate bonds, commercial

paper,

asset-backed securities, U.S. government agency

obligations and foreign government obligations

that are

valued using pricing provided by brokers or pricing

service companies that are corroborated with

market

data.

●

Level 3 derivative assets and liabilities consist

of OTC swaps, options and forward purchase and

sale

contracts where a significant portion of fair

value is calculated from underlying market

data that is not

readily available.

The derived value uses industry standard methodologies

that may consider the historical

relationships among various commodities, modeled

market prices, time value, volatility factors and other

relevant economic measures.

The use of these inputs results in management’s best estimate of fair

value.

Level 3 activity was not material for all periods

presented.

The following table summarizes the fair value

hierarchy for gross financial assets and

liabilities (i.e.,

unadjusted where the right of setoff exists for commodity

derivatives accounted for at fair value on a recurring

basis):

Millions of Dollars

June 30, 2021

December 31, 2020

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

Assets

Investment in CVE shares

1,802

1,256

Investments in debt securities

525

535

501

518

Commodity derivatives

402

349

774

142

101

255

Total assets

2,214

874

3,111

1,415

602

2,029

Liabilities

Commodity derivatives

399

287

752

120

220

Total liabilities

399

287

752

120

220

The following table summarizes those commodity

derivative balances subject to the right of setoff as

presented on our consolidated balance sheet.

We have elected to offset the recognized fair value amounts for

multiple derivative instruments executed with the

same counterparty in our financial statements

when a legal

right of setoff exists.

Millions of Dollars

Amounts Subject to Right of Setoff

Gross

Amounts Not

Gross

Net

Amounts

Subject to

Gross

Amounts

Cash

Net

Recognized

Right of Setoff

Amounts

Offset

Presented

Collateral

Amounts

June 30, 2021

Assets

774

746

464

282

Liabilities

752

726

464

262

245

December 31, 2020

Assets

255

253

157

Liabilities

220

219

157

At June 30, 2021 and December 31, 2020, we

did not present any amounts gross on our

consolidated

balance sheet where we had the right of setoff.

Reported Fair Values of Financial Instruments

We used the following methods and assumptions to estimate the fair value of financial

instruments:

●

Cash and cash equivalents and short-term investments:

The carrying amount reported on the balance

sheet approximates fair value.

For those investments classified as available

for sale debt securities,

the carrying amount reported on the balance sheet

is fair value.

●

Accounts and notes receivable (including long-term

and related parties): The carrying amount

reported on the balance sheet approximates fair

value.

The valuation technique and methods used to

estimate the fair value of the current portion

of fixed-rate related party loans is consistent

with Loans

and advances—related parties.

●

Investment in CVE:

See Note 5 for a discussion of the carrying value and fair value of our investment

in CVE common shares.

●

Investments in debt securities classified as available

for sale: The fair value of investments in debt

securities categorized as Level 1 in the fair

value hierarchy is measured using exchange prices.

The

fair value of investments in debt securities

categorized as Level 2 in the fair value hierarchy

measured using pricing provided by brokers or

pricing service companies that are corroborated

with

market data.

See Note 10 for additional information.

●

Loans and advances—related parties: The carrying

amount of floating-rate loans approximates

fair

value.

The fair value of fixed-rate loan activity is

measured using market observable data and is

categorized as Level 2 in the fair value hierarchy.

See Note 4 for additional information.

●

Accounts payable (including related parties)

and floating-rate debt: The carrying amount of accounts

payable and floating-rate debt reported on the balance

sheet approximates fair value.

●

Fixed-rate debt: The estimated fair value of fixed-rate

debt is measured using prices available

from a

pricing service that is corroborated by market

data; therefore, these liabilities are categorized

as Level

2 in the fair value hierarchy.

●

Commercial paper: The carrying amount of our

commercial paper instruments approximates

fair value

and is reported on the balance sheet as short-term

debt.

The following table summarizes the net fair

value of financial instruments (i.e., adjusted

where the right of

setoff exists for commodity derivatives):

Millions of Dollars

Carrying Amount

Fair Value

June 30

December 31

June 30

December 31

2021

2020

2021

2020

Financial assets

Investment in CVE shares

1,802

1,256

1,802

1,256

Commodity derivatives

310

Investments in debt securities

535

518

535

518

Loans and advances—related parties

168

220

168

220

Financial liabilities

Total debt, excluding finance leases

19,135

14,478

23,376

19,106

Commodity derivatives

271

Note 12—Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss in the

equity section of our consolidated balance

sheet included:

Millions of Dollars

Defined

Benefit Plans

Net Unrealized

Gain (Loss) on

Securities

Foreign

Currency

Translation

Accumulated

Other

Comprehensive

Loss

December 31, 2020

(425)

(4,795)

(5,218)

Other comprehensive income (loss)

134

(1)

165

298

June 30, 2021

(291)

(4,630)

(4,920)

The following table summarizes reclassifications

out of accumulated other comprehensive loss and into

net

income (loss):

Millions of Dollars

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Defined benefit plans

The above amounts are included in the computation of net periodic benefit

cost and are presented net of tax expense of $

million and $

million for the three-month periods ended June 30, 2021 and June 30, 2020,

respectively, and $

million and $

million for the six-month

periods ended June 30, 2021 and June 30, 2020, respectively

See Note 14 for additional information.

Note 13—Cash Flow Information

Millions of Dollars

Six Months Ended

June 30

2021

2020

Cash Payments

Interest

464

397

Income taxes

107

761

Net Sales (Purchases) of Investments

Short-term investments purchased

(5,439)

(7,021)

Short-term investments sold

6,842

6,147

Long-term investments purchased

(149)

(208)

Long-term investments sold

1,302

(1,030)

See Note 3 for additional information on cash and non-cash changes to our consolidated balance sheet

associated with our Concho acquisition.

Note 14—Employee Benefit Plans

Pension and Postretirement Plans

Millions of Dollars

Pension Benefits

Other Benefits

2021

2020

2021

2020

U.S.

Int'l.

U.S.

Int'l.

Components of Net Periodic Benefit Cost

Three Months Ended June 30

Service cost

Interest cost

Expected return on plan assets

(20)

(30)

(21)

(34)

Amortization of prior service credit

(10)

(8)

Recognized net actuarial loss

Settlements

Net periodic benefit cost

(7)

Six Months Ended June 30

Service cost

Interest cost

Expected return on plan assets

(44)

(60)

(42)

(71)

Amortization of prior service credit

(19)

(16)

Recognized net actuarial loss

Settlements

(1)

Curtailments

Special Termination Benefits

Net periodic benefit cost

115

(15)

(12)

The components of net periodic benefit cost, other

than the service cost component, are included

in the “Other

expenses” line item on our consolidated income statement.

During the three-month period ended June 30,

2021, lump-sum benefit payments exceeded the sum

service and interest costs for the year for the

U.S. qualified pension plan and a U.S. non-qualified

supplemental

retirement plan.

As a result, we recognized a proportionate share

of prior actuarial losses from other

comprehensive income as pension settlement

expense of $

million.

In conjunction with the recognition of

pension settlement expense, the fair market

values of the pension plan assets were updated

and the pension

benefit

obligations of the U.S. qualified pension plan

and the U.S. non-qualified supplemental

retirement plan

were remeasured at June 30, 2021.

At the measurement date, the net pension liability

decreased by $

million, primarily a result of better actual return

on assets compared with the expected return,

partially offset

by a decrease in the discount rate, resulting

in a corresponding increase to other comprehensive

income.

As part of our restructuring program, we concluded

that actions taken during the first quarter

of 2021, would

result in a significant reduction of future service

of active employees in the U.S. qualified

pension plan, a U.S.

nonqualified supplemental retirement plan and the

U.S. other postretirement benefit plans.

As a result, we

recognized an increase in the benefit obligation

as a curtailment loss of $

million on the U.S. pension benefit

plans in the first quarter of 2021.

In conjunction with the recognition of curtailment

losses, the fair market

values of pension plan assets were updated, and the

pension benefit obligations of the U.S. qualified

pension, a

U.S. nonqualified supplemental retirement

plan and the U.S. other postretirement benefit

plans were

remeasured.

At March 31, 2021, the net pension liability decreased

by $

million, primarily as a result of

discount rate increases for each plan offset by lower than

premised return on assets on the U.S. qualified

pension plan, resulting in a corresponding increase

to other comprehensive income.

The relevant discount rates are summarized in

the following table:

June 30

March 31

December 31

Discount rate

2021

2020

U.S. qualified pension plan

2.65

3.00

2.40

U.S. nonqualified pension plan

2.15

2.40

1.85

U.S. postretirement benefit plans

2.80

2.20

* Not remeasured at June 30, 2021.

During the first six months of 2021, we contributed

269

million to our domestic benefit plans and $

million

to our international benefit plans.

In 2021, we expect to contribute a total of approximately

365

million to

our domestic qualified and nonqualified pension

and postretirement benefit plans and $

million to our

international qualified and nonqualified pension

and postretirement benefit plans.

Severance Accrual

The following table summarizes our severance

accrual activity for the six-month period

ended June 30, 2021:

Millions of Dollars

Balance at December 31, 2020

Accruals

102

Benefit payments

(91)

Balance at June 30, 2021

Accruals include severance costs associated with

our restructuring program.

Of the remaining balance at June

30, 2021, $

million is classified as short-term.

See Note 3 for information relating to our Concho

acquisition.

Note 15—Related Party Transactions

Our related parties primarily include equity method

investments and certain trusts for the benefit

of employees.

Significant transactions with our equity affiliates

were:

Millions of Dollars

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Operating revenues and other income

Purchases

Operating expenses and selling, general and administrative

expenses

Net interest (income) expense*

(2)

(1)

(4)

*We paid interest to, or received interest from,

various affiliates.

See Note 4 for additional information on loans to affiliated companies.

Note 16—Sales and Other Operating Revenues

Revenue from Contracts with Customers

The following table provides further disaggregation

of our consolidated sales and other operating

revenues:

Millions of Dollars

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Revenue from contracts with customers

7,753

1,919

14,914

6,830

Revenue from contracts outside the scope of ASC

Topic 606

Physical contracts meeting the definition of a derivative

1,754

856

4,728

2,152

Financial derivative contracts

(26)

(260)

(75)

Consolidated sales and other operating revenues

9,556

2,749

19,382

8,907

Revenues from contracts outside the scope of ASC

Topic 606 relate primarily to physical gas contracts at

market prices which qualify as derivatives accounted

for under ASC Topic 815, “Derivatives and Hedging,”

and for which we have not elected NPNS.

There is no significant difference in contractual

terms or the policy

for recognition of revenue from these contracts

and those within the scope of ASC Topic 606.

The following

disaggregation of revenues is provided in conjunction

with

Note 17—Segment Disclosures and Related

Information

Millions of Dollars

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Revenue from Outside the Scope of ASC Topic 606

by Segment

Lower 48

1,345

698

3,811

1,674

Canada

207

121

510

300

Europe, Middle East and North Africa

202

407

178

Physical contracts meeting the definition of a derivative

1,754

856

4,728

2,152

Millions of Dollars

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Revenue from Outside the Scope of ASC Topic 606

by Product

Crude oil

178

302

118

Natural gas

1,504

763

4,231

1,853

Other

195

181

Physical contracts meeting the definition of a derivative

1,754

856

4,728

2,152

Practical Expedients

Typically,

our commodity sales contracts are less than

12 months in duration; however, in certain specific

cases may extend longer, which may be out to the end of

field life.

We have long-term commodity sales

contracts which use prevailing market prices at the time of delivery, and under these contracts, the market-

based variable consideration for each performance obligation (i.e., delivery of commodity) is allocated to each

wholly unsatisfied performance obligation within the contract.

Accordingly,

we have applied the practical

expedient allowed in ASC Topic 606 and do not disclose the aggregate amount of the transaction price

allocated to performance obligations or when we expect to recognize revenues that are unsatisfied (or partially

unsatisfied) as of the end of the reporting period.

Receivables and Contract Liabilities

Receivables from Contracts with Customers

At June 30, 2021, the “Accounts and notes receivable”

line on our consolidated balance sheet,

includes trade

receivables of $

3,504

million compared with $

1,827

million at December 31, 2020, and includes

both

contracts with customers within the scope of ASC

Topic 606 and those that are outside the scope of ASC

Topic 606.

We typically receive payment within 30 days or less (depending on the terms of the invoice) once

delivery is made.

Revenues that are outside the scope of ASC Topic 606 relate primarily to

physical gas sales

contracts at market prices for which we do not

elect NPNS and are therefore accounted for

as a derivative

under ASC Topic 815.

There is little distinction in the nature

of the customer or credit quality of trade

receivables associated with gas sold under contracts

for which NPNS has not been elected

compared to trade

receivables where NPNS has been elected.

Contract Liabilities from Contracts with Customers

We have entered into contractual arrangements where we license proprietary technology

to customers related

to the optimization process for operating LNG

plants.

The agreements typically provide for negotiated

payments to be made at stated milestones.

The payments are not directly related to our

performance under the

contract and are recorded as deferred revenue

to be recognized as revenue when the customer

can utilize and

benefit from their right to use the license.

Payments are received in installments over the construction period.

Millions of Dollars

Contract Liabilities

At December 31, 2020

Contractual payments received

Revenue recognized

(62)

At June 30, 2021

Amounts Recognized in the Consolidated

Balance Sheet at June 30, 2021

Current liabilities

For the six-month period of 2021, we recognized revenue of $62 million in the “Sales and other operating

revenues” line on our consolidated income statement. No revenue was recognized during the three-month

period ended June 30, 2021. We expect to recognize the contract liabilities as of June 30, 2021, as revenue

during 2022.

Note 17—Segment Disclosures and Related Information

We explore for, produce, transport and market crude oil, bitumen, natural gas, LNG and NGLs on

a worldwide

basis.

We manage our operations through

six

operating segments, which are primarily defined

by geographic

region: Alaska; Lower 48; Canada; Europe,

Middle East and North Africa; Asia Pacific;

and Other

International.

Corporate

and Other represents income and costs not

directly associated with an operating segment,

such as

most interest income and expense;

premiums on early retirement of debt; corporate

overhead and certain

technology activities, including licensing revenues;

and unrealized holding gains or losses

on equity securities.

Corporate assets include all cash and cash equivalents

and short-term investments.

We evaluate performance and allocate resources based on net income (loss) attributable

to ConocoPhillips.

Intersegment sales are at prices that approximate

market.

Effective in the third quarter of 2020, we restructured our

segments to align with changes to our internal

organization.

The Middle East business was realigned from

the Asia Pacific and Middle East segment to the

Europe and North Africa segment.

The segments have been renamed the Asia Pacific

segment and the Europe,

Middle East and North Africa segment.

We have revised segment information disclosures and segment

performance metrics presented within our results

of operations for the prior comparative periods.

On January 15, 2021, we completed our acquisition

of Concho, an independent oil and gas exploration

and

production company with operations across New

Mexico and West Texas.

Results of operations for Concho

are included in our Lower 48 segment for the current

period.

Certain transaction and restructuring costs

associated with the Concho acquisition are included

in our Corporate and Other segment.

See Note 3 for

additional information.

Analysis of Results by Operating Segment

Millions of Dollars

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Sales and Other Operating Revenues

Alaska

1,418

419

2,551

1,532

Intersegment eliminations

Alaska

1,418

438

2,551

1,551

Lower 48

5,889

1,433

12,402

4,536

Intersegment eliminations

(2)

(28)

(4)

(38)

Lower 48

5,887

1,405

12,398

4,498

Canada

802

165

1,669

678

Intersegment eliminations

(352)

(657)

(180)

Canada

450

165

1,012

498

Europe, Middle East and North Africa

1,165

288

2,143

888

Asia Pacific

630

450

1,207

1,453

Other International

Corporate and Other

Consolidated sales and other operating revenues

9,556

2,749

19,382

8,907

Sales and Other Operating Revenues by Geographic Location

(1)

United States

7,308

1,844

15,015

6,061

Australia

168

605

Canada

450

165

1,012

498

China

171

326

213

Indonesia

207

132

403

336

Libya

290

520

Malaysia

252

478

299

Norway

618

242

1,030

688

United Kingdom

257

593

156

Other foreign countries

Worldwide consolidated

9,556

2,749

19,382

8,907

Sales and Other Operating Revenues by Product

Crude oil

5,797

1,216

10,292

4,660

Natural gas

2,812

1,190

7,323

2,845

Natural gas liquids

325

562

235

Other

(2)

622

259

1,205

1,167

Consolidated sales and other operating revenues by product

9,556

2,749

19,382

8,907

(1) Sales and other operating revenues are attributable to countries based on the location of

the selling operation.

(2) Includes LNG and bitumen.

Millions of Dollars

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Net Income (Loss) Attributable to ConocoPhillips

Alaska

371

(141)

530

(60)

Lower 48

1,175

(365)

1,643

(802)

Canada

102

(86)

112

(195)

Europe, Middle East and North Africa

207

360

226

Asia Pacific

175

648

492

920

Other International

(5)

(6)

(9)

Corporate and Other

185

(55)

(1,590)

Consolidated net income (loss) attributable to ConocoPhillips

2,091

260

3,073

(1,479)

Millions of Dollars

June 30

December 31

2021

2020

Total Assets

Alaska

14,636

14,623

Lower 48

32,309

11,932

Canada

6,991

6,863

Europe, Middle East and North Africa

8,616

8,756

Asia Pacific

10,721

11,231

Other International

239

226

Corporate and Other

11,891

8,987

Consolidated total assets

85,403

62,618

Note 18—Income Taxes

Our effective tax rate was

percent in the three-month period ended June 30,

2021 and was negative for the

comparable period of 2020.

Both periods were primarily impacted by shifts

in our before-tax income between

higher and lower tax jurisdictions as well as the

change in our U.S. valuation allowance

driven by the fair

value measurement of our CVE common shares.

Our effective tax rates for the six-months ended June 30,

2021 and 2020 were

percent and

percent,

respectively and both periods were impacted by the

same items noted above.

Additionally, our effective tax

rate for the six-month period ended June 30, 2021

was adversely impacted by $

million due to incremental

interest deductions from the exchange of debt

acquired from Concho offsetting U.S. foreign source revenue

that would otherwise have been offset by foreign tax credits.

The six-month period ending June 30, 2020, was

also impacted by the tax effect of the gain on disposition

recognized for Australia-West assets.

For additional

information relating to the debt exchange, see Note 6.

During the three and six-month periods of 2021,

our valuation allowance decreased by $

million and $

151

million, respectively, compared to a decrease of $

117

million and an increase of $

229

for the same periods of

2020.

The change to our U.S. valuation allowance

for all periods relates primarily to the fair

value

measurement of our CVE common shares and

our expectation of the tax impact related

to incremental capital

gains and losses.

The Company has ongoing income tax audits

in a number of jurisdictions. The government

agents in charge of

these audits regularly request additional time

to complete audits, which we generally grant, and conversely

occasionally close audits unpredictably.

Within the next twelve months we may have audit periods close

that

could significantly impact our total unrecognized

tax benefits. The amount of such change

and the associated

impact on our financial statements is not estimable

at this time.

Our deferred tax liability increased by approximately

1.1

billion as part of the liabilities assumed through

our

Concho acquisition.

Additionally, our reserve for unrecognized tax benefits increased by $

150

million related

to tax credit carryovers acquired from Concho

that we do not expect to recognize.

For additional information

relating to the Concho acquisition, see Note 3.

Item 2.

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Management’s

Discussion and Analysis is the company’s analysis of its financial performance and of

significant trends that may affect future performance.

It should be read in conjunction with the financial

statements and notes.

It contains forward-looking statements including, without limitation,

statements relating

to the company’s plans, strategies, objectives, expectations and intentions that are made pursuant to the “safe

harbor” provisions of the Private Securities Litigation Reform

Act of 1995.

The words “anticipate,”

“believe,” “budget,” “continue,” “could,” “effort,”

“estimate,” “expect,” “forecast,” “goal,” “guidance,”

“intend,” “may,” “objective,” “outlook,” “plan,” “potential,” “predict,” “projection,” “seek,” “should,”

“target,” “will,” “would,” and similar expressions identify forward-looking statements.

The company does

not undertake to update, revise or correct any of the forward-looking information unless required to do so

under the federal securities laws.

Readers are cautioned that such forward-looking statements should be read

in conjunction with the company’s disclosures under the heading: “CAUTIONARY STATEMENT FOR THE

PURPOSES OF THE ‘SAFE HARBOR’ PROVISIONS

OF THE PRIVATE SECURITIES LITIGATION

REFORM ACT OF 1995,” beginning on page

57.

The terms “earnings” and “loss” as used in Management’s Discussion and Analysis refer to net income (loss)

attributable to ConocoPhillips.

BUSINESS ENVIRONMENT AND EXECUTIVE

OVERVIEW

ConocoPhillips is the world’s largest independent E&P company with operations

and activities in 15 countries.

Our diverse, low cost of supply portfolio includes

resource-rich unconventional plays in North

America;

conventional assets in North America, Europe,

and Asia; LNG developments; oil sands in

Canada; and an

inventory of global conventional and unconventional

exploration prospects.

Headquartered in Houston, Texas,

at June 30, 2021, we employed approximately

10,100 people worldwide and had total assets

of $85 billion.

Completed Acquisition of Concho Resources Inc.

On January 15, 2021, we completed our acquisition

of Concho Resources Inc. (Concho), an independent

oil

and gas exploration and production company

with operations across New Mexico and West Texas.

The

addition of complementary acreage in the

Delaware and Midland Basins creates a sizeable

Permian presence to

augment our leading unconventional positions

in the Eagle Ford, Bakken and Montney.

Since the closing of the transaction, we have made

significant progress in integrating the two

companies and

have exceeded our own expectations in realizing

synergies and savings that should have long lasting positive

effects on our business.

We previously announced an expected $750 million of annual cost and capital

savings

by 2022.

However, due to additional benefits anticipated from further cost, capital,

and margin improvements,

we now expect approximately $1 billion in annual

synergies and savings by 2022.

See Note 3 for additional

Overview

While commodity prices continued to improve

in the second quarter of 2021, we believe that

prices will

remain cyclical and volatile.

Our view is that a successful business strategy

in the E&P industry must be

resilient in lower price environments, while

also retaining upside during periods of higher prices.

As such, we

are unhedged, remain disciplined in our investment

decisions and are monitoring market

fundamentals,

including OPEC plus updates regarding supply

guidance,

inventory levels, and capital restraint across

the

industry.

Demand is still recovering but has yet to reach

pre-pandemic levels.

The speed and extent of this

recovery will be influenced by whether and at what

pace the COVID-19 restrictions that

have reduced

economic activity and depressed the demand for

our products globally are eased.

As the macro energy environment continues to evolve,

we have embraced what we believe sector leadership

requires and we call it our triple mandate.

We believe ConocoPhillips can play a valued role in whatever

pathway the energy transition takes by investing in the lowest

cost of supply barrels to help meet global energy

demand, delivering competitive returns of and on capital,

and achieving our net-zero ambition on our gross

operated (scope 1 and 2) emissions.

Our triple mandate is supported by financial principles

and allocation priorities that should allow

us to deliver

superior returns through the price cycles.

Our financial principles consist of maintaining

balance sheet

strength, providing peer-leading distributions,

making disciplined investments, and delivering ESG excellence,

all of which are in service of delivering financial

returns.

Our acquisition of Concho further reinforced

our

value proposition.

In the second quarter, total company production was 1,588

MBOED, including 435

MBOED from the Permian Basin, resulting in cash

provided by operating activities of $4.3 billion.

In the six-

month period ended June 30, 2021, we have

generated $6.3 billion in cash provided by operating

activities,

returning $1.2 billion to shareholders through dividends

and $1 billion through share repurchases.

We ended

the quarter with cash, cash equivalents and short-term

investments totaling $8.9 billion.

In February 2021, we resumed our share repurchase

program at an annualized level of $1.5 billion

which was

increased in the second quarter to an annualized level

of $2.5 billion for 2021.

Additionally, in May 2021 we announced a paced monetization program related

to the 208 million shares of

Cenovus Energy (CVE) common shares owned at that time.

We plan to fully dispose of our CVE shares by

year-end 2022, however, the sales pace for the remaining shares will be guided

by market conditions, and we

retain discretion to adjust accordingly.

The proceeds from this disposition will be deployed

towards

incremental share repurchases.

During the second quarter of 2021 we sold 20 million

shares or approximately

10 percent of the shares held at December 31, 2020

for $180 million.

Based on current market conditions, in

2021 we anticipate $1 billion in proceeds to be directed

towards our existing share repurchase authorization,

bringing our total 2021 share repurchases to an estimated

$3.5 billion.

See Note 5 for additional information

on our investment in CVE.

These share repurchases along with our annual

dividend of $2.3 billion amount to a total of approximately

billion in planned distributions for 2021.

In May 2021,

we demonstrated our commitment to preserving

our ‘A’

-rated balance sheet by announcing our

intent to reduce the company’s gross debt by $5 billion over five years through

natural and accelerated

maturities.

In June 2021, we affirmed our commitment to ESG leadership

and excellence,

and to the specific targets that

we set in October 2020 when we became the first

U.S.-based oil and gas company to adopt a Paris-aligned

climate-risk strategy.

Our commitment includes:

●

Net-zero ambition for operational (scope 1 and

2) emissions by 2050 with active advocacy

for a price

on carbon to address end-use (scope 3) emissions;

●

Targeting a reduction in operational greenhouse gas emissions intensity by 35 to 45 percent

from 2016

levels by 2030;

●

Zero routine flaring by 2030, with an ambition

to get there by 2025;

●

10 percent reduction target for methane emissions intensity

by 2025, in addition to the 65 percent

reductions we have made since 2015;

●

Adding continuous methane monitoring devices to

our operations with a focus on the larger Lower 48

facilities;

●

Formation of a dedicated low carbon technology

organization responsible for identifying and

prioritizing global emissions reduction initiatives

and opportunities associated with the energy

transition including carbon capture, utilization

and storage (CCUS) and hydrogen;

and

●

ESG performance in executive and employee

compensation programs.

Q2'19

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

Q4'20

Q1'21

Q2'21

WTI/Brent

$/Bbl

WTI Crude Oil, Brent Crude Oil and Henry Hub Natural Gas Prices

Quarterly Averages

WTI - $/Bbl

Brent - $/Bbl

HH - $/MMBTU

$/MMBTU

Operationally, we remain focused on safely executing the business.

Production was 1,588 MBOED in the

second quarter of 2021, an increase of 607 MBOED

or 62 percent, compared with the second quarter

of 2020,

primarily due to the acquisition of approximately

330 MBOED in the Permian Basin from

our Concho

acquisition and the absence of last year’s economic curtailments

driven by weakness in oil prices

predominantly in operated North American assets.

We re-invested $1.3 billion back into the business in the form of capital expenditures

during the second

quarter, with over half of our investments focused on flexible,

short-cycle unconventional plays in the Lower

48 segment where our production is liquids-weighted

and is accessible to both domestic and export

markets.

For the full year, driven by efficiencies we have already captured from the

Concho transaction,

we have

reduced our 2021 capital guidance to $5.3 billion

and cost guidance to $6.1 billion for 2021.

Business Environment

Commodity prices are the most significant

factor impacting our profitability and related reinvestment

operating cash flows into our business.

Among other dynamics that could influence

world energy markets and

commodity prices are global economic health, supply

or demand disruptions or fears thereof caused

by civil

unrest, global pandemics, military conflicts,

actions taken by OPEC plus and other major

oil producing

countries, environmental laws, tax regulations,

governmental policies, and weather-related disruptions.

Our

strategy is to create value through price cycles

by delivering on the financial,

operational and ESG priorities

that underpin our value proposition.

Our earnings and operating cash flows generally

correlate with price levels for crude oil

and natural gas, which

are subject to factors external to the company and over

which we have no control.

The following graph depicts

the trend in average benchmark prices for WTI

crude oil, Brent crude oil and Henry Hub natural

gas:

Brent crude oil prices averaged $68.83 per barrel

in the second quarter of 2021,

an increase of 136 percent

compared with $29.20 per barrel in the second quarter

of 2020.

WTI at Cushing crude oil prices averaged

$66.07 per barrel in the second quarter of 2021,

an increase of 137 percent compared with $27.85

per barrel in

the second quarter of 2020.

Oil prices increased alongside the ongoing global

economic recovery following

2020’s COVID closures as well as OPEC plus supply restraint.

Henry Hub natural gas prices averaged $2.83

per MMBTU in the second quarter of 2021,

an increase of 65

percent compared with $1.71 per MMBTU in the second

quarter of 2020.

Henry Hub prices have increased

due to healthy domestic demand accompanied

by record levels of feedgas demand for LNG exports

to Europe

and Asia.

Our realized bitumen price averaged $37.60 per barrel

in the second quarter of 2021,

increase of

approximately $61 per barrel compared with negative

$23.11 per barrel in the second quarter of 2020.

The

increase in the second quarter of 2021 was driven

by higher blend price for Surmont sales,

largely attributed to

a strengthening of WTI price and reduced unutilized

transportation costs which negatively impacted

our

realized bitumen price in 2020.

We continue to optimize bitumen price realizations through the utilization of

downstream transportation solutions and implementation

of alternate blend capability which results in lower

diluent costs.

Our total average realized price was $50.03 per

BOE in the second quarter of 2021,

increased in comparison

with $23.09 per BOE in the second quarter of

2020.

Key Operating and Financial Summary

Significant items during the second quarter

of 2021 and recent announcements included

the following:

●

Delivered strong operational performance across the

company’s asset base, including successful

planned maintenance turnarounds, resulting in second

quarter production of 1,547 MBOED,

excluding

Libya.

●

Net cash provided by operating activities was $4.3

billion, exceeding capital expenditures

and

investments of $1.3 billion.

●

Distributed $1.2 billion to shareholders, comprised

of $0.6 billion in dividends and $0.6 billion

share repurchases.

●

Ended the quarter with cash and cash equivalents

totaling $6.6 billion and short-term investments

$2.3 billion, equaling $8.9 billion in ending cash,

cash equivalents and short-term investments.

●

Entered into divestiture agreements during July for

certain Lower 48 noncore assets totaling

approximately $0.2 billion, subject to customary

closing adjustments, as part of the company’s plan to

generate $2 to $3 billion in disposition proceeds

over the next 18 months.

Outlook

Capital,

Cost and Production

In June 2021, due to realizing synergistic savings from

our Concho acquisition earlier than anticipated,

announced reductions

of full year 2021

operating plan capital and cost guidance by

a combined $300 million.

Capital guidance was reduced to $5.3 billion

and cost guidance to $6.1 billion for the full

year 2021.

Third-quarter 2021 production is expected to be 1.48

to 1.52 MMBOED,

reflecting seasonal turnarounds

planned in Alaska and the Asia Pacific region.

This production guidance excludes Libya and

assumes that

previously announced divestitures close during

the third quarter of 2021.

All other guidance items are

unchanged.

Depreciation, Depletion and Amortization

DD&A expense was $1.9 billion in the second quarter

of 2021.

Proved reserves estimates were updated in the

current quarter utilizing historical twelve-month

first-of-month average prices, which decreased

second quarter

DD&A expense by approximately $160 million

before-tax.

Depending on price fluctuations, we would expect

reserve estimates to either increase or decrease.

RESULTS OF OPERATIONS

Effective with the third quarter of 2020, we have restructured our segments to align with

changes to our

internal organization.

The Middle East business was realigned from the Asia Pacific and Middle East

segment

to the Europe and North Africa segment.

The segments have been renamed the Asia Pacific segment

and the

Europe, Middle East and North Africa segment.

We have revised segment information disclosures and

segment performance metrics presented within our results of operations for the

prior comparative periods.

Unless otherwise indicated, discussion of results for the three-

and six-month periods ended June 30, 2021, is

based on a comparison with the corresponding periods of 2020.

Consolidated Results

A summary of the company's net income (loss)

attributable to ConocoPhillips by business segment

follows:

Millions of Dollars

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Alaska

371

(141)

530

(60)

Lower 48

1,175

(365)

1,643

(802)

Canada

102

(86)

112

(195)

Europe, Middle East and North Africa

207

360

226

Asia Pacific

175

648

492

920

Other International

(5)

(6)

(9)

Corporate and Other

185

(55)

(1,590)

Net income (loss) attributable to ConocoPhillips

2,091

260

3,073

(1,479)

Net income (loss) attributable to ConocoPhillips

in the second quarter of 2021 increased $1,831 million.

Earnings were positively impacted by:

●

Higher realized commodity prices.

●

Higher sales volumes, primarily due to our

Concho acquisition and absence of production

curtailments

in our operated North American assets.

For additional information related to our Concho acquisition,

see Note 3.

Second quarter 2021 net income increases were partly

offset by:

●

Higher DD&A expenses primarily due to our

Concho acquisition and the absence of production

curtailments in our operated North American assets,

partially offset by lower rates driven from price-

related reserve revisions due to higher commodity

prices in 2021.

●

Higher production and operating expenses and

taxes other than income taxes, primarily

due to our

Concho acquisition and the absence of production

curtailments in our operated North American

assets.

●

Absence of a $597 million after-tax gain on dispositions

related to our Australia-West divestiture in

May 2020.

Net income (loss) attributable to ConocoPhillips

in the six-month period ended June 30, 2021, increased

$4,552 million.

In addition to the items detailed above, earnings

were positively impacted by:

●

A gain of $726 million after-tax on our CVE

common shares, compared with an after-tax

loss of

$1,140 million in the first half of 2020.

For discussion of our CVE common shares, see Note 5.

●

Lower impairments by $519 million,

primarily due to the absence of impairments to noncore

gas

assets in our Lower 48 segment.

In addition to the items detailed above, the increases

in earnings in the six-month period ended

June 30, 2021,

were partly offset by:

●

Restructuring and transaction expenses of approximately

$261 million after-tax related to our Concho

acquisition and mark-to-market impacts on certain

key employee compensation programs.

●

Realized losses on hedges of $233 million after-tax

related to derivative positions assumed through

our Concho acquisition.

These derivative positions were settled

entirely within the first quarter of

2021.

See Note 10 for additional information.

See the “Segment Results” section for additional

information.

Income Statement Analysis

Unless otherwise indicated, all results in Income Statement Analysis

are before-tax.

Sales and other operating revenues for the three-

and six-month periods of 2021 increased $6,807

million and

$10,475 million,

respectively, mainly due to higher realized commodity prices and higher sales

volumes in the

Lower 48, primarily related to our Concho acquisition

and the absence of production curtailments in

our

operated North American assets.

Equity in earnings of affiliates for the three-month period

of 2021 increased $62 million primarily due to

higher earnings driven by higher LNG and crude

prices, partially offset by a higher effective tax rate related

equity method investments in our Europe, Middle

East, and North Africa segment.

For the six-month period

of 2021, Equity in earnings of affiliates decreased $50 million

primarily due to lower earnings driven by lower

LNG lagging contract prices in 2021 when compared

with the same periods in 2020.

Gain on dispositions for the three-

and six-month periods of 2021 decreased $537

million and $262 million,

respectively, primarily due to the absence of a $587 million gain associated with

our Australia-West

divestiture.

The six-month decrease was partially offset by recognition

of a $200 million FID bonus associated

with our Australia-West divestiture in the first quarter of 2021.

Other income (loss) for the three-month period

of 2021

decreased $137 million and for the six-month

period

increased $1,780 million.

During these periods in 2021, we recognized

gains of $418 million and $726

million,

respectively, on our CVE common shares, compared with a gain of $551 million

and loss of $1,140

million,

respectively, for the same periods in 2020.

Purchased commodities for the three- and six-month

periods of 2021 increased $1,868 million

and $3,690

million, respectively, primarily due to higher gas and crude prices.

In the six-month period of 2021, higher

prices were partly offset by lower crude oil volumes purchased.

Production and operating expenses for the three-

and six-month periods of 2021

increased $332 million and

$542 million, respectively, primarily due to costs associated with additional

volumes in our operated North

American assets related to our Concho acquisition

and the absence of production curtailments.

Selling, general and administrative expenses increased

$275 million in the six-month period of 2021,

primarily

due to higher costs associated with compensation

and benefits, including mark-to-market impacts

of certain

key employee compensation programs,

and transaction and restructuring expenses

associated with our Concho

acquisition.

Exploration expenses for the six-month period of 2021

decreased $144 million, primarily due to the

absence of

an unproved property impairment and dry hole expenses

related to the Kamunsu East Field in Malaysia

and the

absence of charges associated with the early termination

of our 2020 winter exploration program in Alaska.

DD&A for the three-

and six-month periods of 2021 increased $709

million and $1,184 million, respectively,

mainly due to higher production volumes in the

Lower 48 associated with our Concho acquisition

and higher

volumes in each of our North American assets

due to the absence of production curtailments,

Montney ramp

up and Kelt acquisition in Canada.

These increases were partly offset by lower rates from

price-related reserve

revisions in Lower 48 and Canada.

Impairments decreased $520 million in

the six-month period of 2021, primarily due to the

absence of a $511

million impairment of certain non-core gas assets

in our Lower 48 segment.

Taxes other than income taxes for the three-

and six-month periods of 2021 increased

$240 million and $360

million, respectively, primarily due to higher sales volumes in Lower 48 from

our Concho acquisition,

the

absence of production curtailments

in all of our North American assets and higher commodity

prices.

Foreign currency transaction (gain) loss in the

six-month period of 2021 was a loss of $29 million

compared

with a gain of $83 million in the six-month period

of 2020.

This increase of $112 million was primarily due to

the absence of gains recognized from foreign currency

derivatives and other foreign currency remeasurements.

See

Note 18—Income Taxes

for information regarding our income tax provision

(benefit) and effective tax

rate.

Summary Operating Statistics

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Average Net Production

Crude oil (MBD)

Consolidated operations

836

460

820

551

Equity affiliates

Total crude oil

849

474

833

564

Natural gas liquids (MBD)

Consolidated operations

120

113

101

Equity affiliates

Total natural gas liquids

128

121

108

Bitumen (MBD)

Natural gas (MMCFD)

Consolidated operations

2,209

1,221

2,142

1,429

Equity affiliates

1,051

1,056

1,066

1,046

Total natural gas

3,260

2,277

3,208

2,475

Total Production

(MBOED)

1,588

981

1,558

1,135

Dollars Per Unit

Average Sales Prices

Crude oil (per bbl)

Consolidated operations*

65.54

25.10

61.60

38.81

Equity affiliates

64.10

25.32

62.03

38.52

Total crude oil

65.51

25.10

61.60

38.80

Natural gas liquids (per bbl)

Consolidated operations

25.62

8.29

25.06

10.85

Equity affiliates

44.12

23.93

46.53

32.38

Total natural gas liquids

26.87

9.88

26.68

12.63

Bitumen (per bbl)

37.60

(23.11)

34.09

(3.09)

Natural gas (per MCF)

Consolidated operations*

4.25

2.64

4.56

3.19

Equity affiliates

3.97

3.90

3.76

4.65

Total natural gas

4.16

3.22

4.29

3.81

Millions of Dollars

Exploration Expenses

General administrative, geological and geophysical,

lease rental, and other

134

215

Leasehold impairment

Dry holes

141

285

*Average sales prices, including the impact of hedges settling per initial contract

terms in the first quarter of 2021 assumed in our Concho

acquisition, were $60.59 per barrel for crude oil and $4.50 per mcf for natural gas for the six-month

period ended June 30, 2021.

As of March

31, 2021, we had settled all oil and gas hedging positions acquired from Concho.

See Note 10 for additional information.

We explore for, produce, transport and market crude oil, bitumen, natural gas, LNG and NGLs on

a worldwide

basis.

At June 30, 2021, our operations were producing

in the U.S., Norway, Canada, Australia, Indonesia,

China, Malaysia,

Qatar and Libya.

Total production of 1,588 MBOED increased 607 MBOED or 62 percent in

the second quarter of 2021 and

423 MBOED or 37 percent in the six-month period

of 2021,

primarily due to:

●

Higher volumes in the Lower 48 due to our

Concho acquisition.

●

Higher volumes in our operated North American

assets and Malaysia due to the absence

of production

curtailments.

●

New wells online in the Lower 48, Canada,

Norway, Malaysia, and Australia.

●

Higher production in Libya due the absence of

a forced shutdown of the Es Sider export terminal

and

other eastern export terminals after a period of

civil unrest.

The increase in the second quarter and in the six-month

period of 2021 was partly offset by:

●

Normal field decline.

●

Disposition activity primarily related to our

Australia-West divestiture completed in the second

quarter of 2020.

In addition to the items detailed above, in the six-month

period of 2021, production also decreased

due to:

●

Higher unplanned downtime in the Lower 48

due to Winter Storm Uri, which impacted production by

approximately 50 MBOED in the first quarter

of 2021.

Production excluding Libya for the second quarter

of 2021 was 1,547 MBOED, an increase of 566

MBOED

from the same period a year ago.

After adjusting for closed acquisitions and dispositions

as well as estimated

impacts from the 2020 curtailment program, second-quarter

2021 production increased 46 MBOED or 3

percent.

This increase was primarily due to new production

from the Lower 48 and other development

programs across the portfolio, partially offset by normal

field decline.

Production from Libya averaged 41

MBOED.

Production excluding Libya for the six-month period

of 2021 was 1,518 MBOED, an increase

of 388 MBOED

from the same period a year ago.

After adjusting for closed acquisitions and dispositions,

estimated impacts

from the 2020 curtailment program and Winter Storm Uri impacts

from 2021, production increased 18

MBOED.

This increase was primarily due to new production

from the Lower 48 and other development

programs across the portfolio, partially offset by normal

field decline.

Production from Libya averaged 40

MBOED.

Segment Results

Alaska

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Net income (loss) attributable to ConocoPhillips

($MM)

371

(141)

530

(60)

Average Net Production

Crude oil (MBD)

184

153

187

175

Natural gas liquids (MBD)

Natural gas (MMCFD)

Total Production

(MBOED)

201

167

205

192

Average Sales Prices

Crude oil ($ per bbl)

67.87

26.81

63.93

42.52

Natural gas ($ per MCF)

4.53

2.56

3.17

2.82

The Alaska segment primarily explores for, produces, transports

and markets crude oil, NGLs and natural gas.

As of June 30, 2021, Alaska contributed 20 percent

of our consolidated liquids production and less

than 1

percent of our consolidated natural gas production.

Net Income (Loss) Attributable to ConocoPhillips

Earnings from Alaska increased $512 million

in the second quarter of 2021

and increased $590 million in the

six-month period of 2021, respectively.

Earnings were positively impacted by:

●

Higher realized crude oil prices.

●

Higher volumes due to the absence of production

curtailments.

●

Lower exploration expenses due to the absence

of charges associated with the early cancellation of our

2020 winter exploration program.

Partly offsetting the increase in earnings was:

●

Higher DD&A expenses primarily driven

by higher production volumes and higher rates.

Production

Average production increased 34 MBOED in the second quarter of 2021 and 13 MBOED

in the six-month

period of 2021, respectively.

The increase was primarily due to:

●

Absence of curtailments at our operated assets.

Partly offsetting the increase in production was:

●

Normal field decline.

Lower 48

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Net Income (Loss) Attributable to ConocoPhillips

($MM)

1,175

(365)

1,643

(802)

Average Net Production

Crude oil (MBD)

454

166

435

218

Natural gas liquids (MBD)

Natural gas (MMCFD)

1,459

486

1,389

582

Total Production

(MBOED)

794

311

755

392

Average Sales Prices

Crude oil ($ per bbl)*

64.13

19.87

60.17

32.92

Natural gas liquids ($ per bbl)

24.62

6.95

24.34

9.81

Natural gas ($ per MCF)*

3.27

1.18

3.88

1.36

*Average sales prices, including the impact of hedges settling per initial contract

terms in the first quarter of 2021 assumed in our Concho

acquisition, were $58.25 per barrel for crude oil and $3.78 per mcf for natural gas for the six-month

period ended June 30, 2021.

As of March

31, 2021, we had settled all oil and gas hedging positions acquired from Concho.

See Note 10 for additional information

The Lower 48 segment consists of operations located

in the U.S. Lower 48 states, as well as producing

properties in the Gulf of Mexico.

As of June 30, 2021, the Lower 48 contributed

53 percent of our

consolidated liquids production and 65 percent

of our consolidated natural gas production.

Net Income (Loss) Attributable to ConocoPhillips

Earnings from the Lower 48 increased $1,540 million

in the second quarter of 2021 and increased $2,445

million in the six-month period of 2021, respectively.

Earnings were positively impacted by:

●

Higher sales volumes of crude oil and natural gas

due to our Concho acquisition and the absence

production curtailments.

●

Higher realized crude oil, natural gas, and NGL

prices.

Partly offsetting the increase in earnings was:

●

Higher DD&A expenses primarily due to higher

production from our Concho acquisition

and absence

of production related curtailment partially

offset by lower rates from price-related reserve revisions.

●

Higher production and operating expenses and

taxes other than income taxes, primarily

due to higher

production from our Concho acquisition and the absence

of production curtailments.

In addition to the items detailed above, in the six-month

period of 2021, earnings also increased due to:

●

The absence of $399 million in after-tax impairments

related to certain noncore gas assets in the Wind

River Basin operations area.

In addition to the items detailed above, in the six-month

period of 2021, earnings also decreased due

to:

●

Realized losses on hedges related to derivative

positions acquired in our Concho acquisition.

See

Note 10 for additional information.

●

Higher selling, general and administrative

expenses, primarily due to transaction and restructuring

charges related

to our Concho acquisition.

For additional information see Note 3.

Production

Average production increased 483 MBOED and 363 MBOED in the three-

and six-month periods of 2021,

respectively, primarily due to:

●

Higher volumes due to our Concho acquisition.

●

New wells online from our development programs

in Eagle Ford, Permian and Bakken.

●

Absence of curtailments.

These production increases were partly offset by:

●

Normal field decline.

In addition to the items detailed above, in the six-month

period of 2021, production also decreased

due to:

●

Higher unplanned downtime, primarily due to

Winter Storm Uri.

Planned Dispositions

In July 2021, we entered into divestiture agreements

to sell our interests in certain noncore assets

in our Lower

48 segment.

Proceeds from these agreements total approximately

$0.2 billion before customary adjustments.

The transactions are expected to close in the third

quarter of 2021.

Canada

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Net Income (Loss) Attributable to ConocoPhillips

($MM)

102

(86)

112

(195)

Average Net Production

Crude oil (MBD)

Natural gas liquids (MBD)

Bitumen (MBD)

Natural gas (MMCFD)

Total Production

(MBOED)

Average Sales Prices

Crude oil ($ per bbl)

56.87

8.69

51.66

15.39

Natural gas liquids ($ per bbl)

27.14

1.64

26.19

1.89

Bitumen ($ per bbl)

37.60

(23.11)

34.09

(3.09)

Natural gas ($ per MCF)

2.26

0.79

2.32

1.05

Average sales prices include unutilized transportation costs.

Our Canadian operations mainly consist of the

Surmont oil sands development in Alberta

and the liquids-rich

Montney unconventional play in British Columbia.

As of June 30, 2021, Canada contributed

8 percent of our

consolidated liquids production and 4 percent

of our consolidated natural gas production.

Net Income (Loss) Attributable to ConocoPhillips

Earnings from Canada increased $188 million

and $307 million,

respectively, in the three-

and six-month

periods of 2021.

Earnings were positively impacted by:

●

Higher realized bitumen and crude oil prices.

●

After-tax gains on disposition related to contingent

payments of $52 million and $72 million

in the

three-

and six-month periods of 2021, respectively, associated with the sale of certain

assets to CVE in

2017.

See Note 3 for additional information about the transaction.

Partly offsetting the increase in earnings was:

●

Higher production and operating expenses primarily

due to the absence of production curtailment

and

increased Montney production.

●

Higher DD&A expenses primarily driven

by higher production volumes partially offset by lower rates

from price-related reserve revisions.

●

Absence of a $48 million refund from the Alberta

Tax & Revenue Administration.

Production

Average production increased 47 MBOED in the second quarter of 2021

and increased 38 MBOED in the six-

month period of 2021, respectively.

The production increase was primarily due to:

●

Absence of curtailments at our Surmont operated

asset.

●

Wells online from Pad 2 and 3 in the Montney.

●

Production from our Kelt acquisition in the third

quarter of 2020.

●

Improved well performance at our Surmont operated

asset.

Europe, Middle East and North Africa

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Net Income Attributable to ConocoPhillips

($MM)

207

360

226

Consolidated Operations

Average Net Production

Crude oil (MBD)

120

118

Natural gas liquids (MBD)

Natural gas (MMCFD)

297

264

303

287

Total Production

(MBOED)

173

124

172

137

Average Sales Prices

Crude oil ($ per bbl)

66.34

32.32

62.48

44.70

Natural gas liquids ($ per bbl)

39.49

16.76

38.21

18.75

Natural gas ($ per MCF)

7.17

2.21

6.58

3.03

*Prior periods have been updated to reflect the Middle East Business Unit

moving from Asia Pacific to the Europe, Middle East and North Africa

segment.

See Note 17 for additional information on our segments.

The Europe,

Middle East and North Africa segment consists

of operations principally located in the Norwegian

sector of the North Sea and the Norwegian Sea,

Qatar, Libya and commercial operations in the U.K.

As of

June 30, 2021, our Europe,

Middle East and North Africa operations contributed

12 percent of our

consolidated liquids production and 14 percent

of our consolidated natural gas production.

Net Income (Loss) Attributable to ConocoPhillips

Earnings from Europe,

Middle East and North Africa increased by

$182 million and $134 million in the three-

and six-month periods of 2021, respectively.

Earnings were positively impacted by:

●

Higher realized natural gas, crude oil and NGL

prices.

●

Higher LNG sales prices, reflected in equity in

earnings of affiliates.

Partly offsetting the increase in earnings was:

●

Higher taxes.

●

Higher DD&A expenses and production and operating

expenses.

●

Absence of foreign currency gains.

Consolidated Production

Average consolidated production increased 49 MBOED and 35 MBOED in the three-

and six-month periods

of 2021, respectively.

The production increase was primarily due:

●

Higher production in Libya due to the absence

of a forced shutdown of the Es Sider export terminal

and other eastern export terminals after

a period of civil unrest.

●

Improved well performance in Norway.

●

New production from Norway drilling activities

including the completion of our Tor II redevelopment

project first achieved in December 2020.

Partly offsetting the increase in production was:

●

Normal field decline.

Asia Pacific

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Net Income Attributable to ConocoPhillips

($MM)

175

648

492

920

Consolidated Operations

Average Net Production

Crude oil (MBD)

Natural gas liquids (MBD)

Natural gas (MMCFD)

358

423

353

522

Total Production

(MBOED)

129

133

129

159

Average Sales Prices

Crude oil ($ per bbl)

67.72

27.98

64.01

43.02

Natural gas liquids ($ per bbl)

27.90

33.21

Natural gas ($ per MCF)

6.32

4.74

6.10

5.45

*Prior periods have been updated to reflect the Middle East Business Unit

moving from Asia Pacific to the Europe, Middle East and North Africa

segment.

See Note 17 for additional information on our segments.

The Asia Pacific

segment has operations in China, Indonesia,

Malaysia and Australia.

As of June 30, 2021, Asia

Pacific contributed 7 percent of our consolidated

liquids production and 17 percent of our

consolidated natural

gas production.

Net Income (Loss) Attributable to ConocoPhillips

Earnings decreased $473 million in the second

quarter of 2021 and decreased $428 million

in the six-month

period of 2021,

respectively.

Earnings were negatively impacted by:

●

Absence of a $597 million after-tax gain related

to our Australia-West divestiture.

●

Lower earnings due to our Australia-West divestiture completed in the second quarter

of 2020.

●

Higher taxes associated with higher production and

prices in Malaysia and Indonesia.

Partly offsetting the decrease in earnings was:

●

Higher crude oil and natural gas prices.

●

Lower production and operating expenses related

to our Australia-West divestiture.

In addition to the items detailed above, in the six-month

period of 2021, earnings also decreased due

to:

●

Lower equity in earnings of affiliates, primarily due to lower

LNG lagging contract prices, partly offset

by increased LNG sales volumes.

In addition to the items detailed above, in the six-month

period of 2021, earnings also increased due to:

●

A $200 million gain on disposition related

to a FID bonus from our Australia-West divestiture.

For

additional information related to this FID bonus,

see

Note 3

and

Note 9

●

Lower exploration expenses, due to the absence

of an unproved property impairment and dry hole

expenses related to the Kamunsu East Field in Malaysia.

Consolidated Production

Average consolidated production decreased 4 MBOED and 30 MBOED in the three-

and six-month periods of

2021, respectively.

The production decrease was primarily due to:

●

The divestiture of our Australia-West assets that contributed 24 MBOED in the second

quarter and 35

MBOED in the six-month period of 2020.

●

Normal field decline.

Partly offsetting the decrease in production was:

●

Absence of curtailments in Malaysia.

●

Bohai Bay development activity in China.

●

Increased production in Malaysia associated

with Malakai Phase 2 first production and ramp-up.

Other International

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Net Income (Loss) Attributable to ConocoPhillips

($MM)

(5)

(6)

(9)

The Other International segment consists of exploration

and appraisal activities in Colombia and Argentina as

well as contingencies associated with prior operations

in other countries.

Earnings from our Other International operations

increased $1 million and decreased $31 million

in the three-

and six-month periods of 2021, respectively.

The decrease in earnings was primarily due to the absence

of a

$29 million after-tax benefit to earnings from the

dismissal of arbitration related to prior operations

in Senegal

recognized in the first quarter of 2020.

Corporate and Other

Millions of Dollars

Three Months Ended

Six Months Ended

June 30

2021

2020

2021

2020

Net Income (Loss) Attributable to ConocoPhillips

Net interest expense

(181)

(174)

(451)

(329)

Corporate general and administrative expenses

(65)

(90)

(194)

(40)

Technology

(4)

(9)

(8)

Other income (expense)

316

458

553

(1,213)

185

(55)

(1,590)

Net interest expense consists of interest and financing

expense, net of interest income and capitalized

interest.

Net interest expense increased by $7 million

and $122 million in the three-and six-month

periods of 2021,

respectively, primarily due to higher debt balances assumed due to our Concho

acquisition.

For additional

information regarding the debt acquired in our Concho transaction, see Note 6.

Corporate G&A expenses include compensation

programs and staff costs.

These expenses decreased by $25

million in the three-month period of 2021 primarily

due to mark to market adjustments associated

with certain

compensation programs.

For the six-month period of 2021, Corporate

G&A expenses increased by $154

million primarily due to restructuring expenses

associated with our Concho acquisition.

For additional

information about restructuring expenses, see Note 14.

Technology includes our investment in new technologies or businesses, as well

as licensing revenues.

Activities are focused on both conventional and tight

oil reservoirs, shale gas, heavy oil, oil

sands, enhanced

oil recovery, as well as LNG.

Earnings from Technology increased $45 million in the six-month period of

2021 primarily due to higher licensing revenues.

Other income (expense) or “Other” includes certain

corporate tax-related items, foreign currency

transaction

gains and losses, environmental costs associated

with sites no longer in operation, other costs not

directly

associated with an operating segment, premiums

incurred on the early retirement of debt, holding

gains or

losses on equity securities, and pension settlement

expense.

“Other” decreased by $142 million in the second

quarter of 2021, primarily due to an after-tax

gain of $418 million on our CVE common shares

in the second

quarter of 2021

compared with an after-tax gain of $551 million

in the same period of 2020 as well as the

absence of the release of a $92 million deferred

tax asset related to our Australia-West divestiture in the second

quarter of 2020.

In the six-month period of 2021, “Other”

increased by $1,766 million,

primarily due to an

after-tax gain of $726 million on our CVE common

shares in the six-month period of 2021, and

the absence of

a $1,140 million after-tax loss on those shares

in the six-month period of 2020.

CAPITAL RESOURCES AND LIQUIDITY

Financial Indicators

Millions of Dollars

June 30

December 31

2021

2020

Cash and cash equivalents

6,608

2,991

Short-term investments

2,251

3,609

Total debt

20,010

15,369

Total equity

44,276

29,849

Percent of total debt to capital*

Percent of floating-rate debt to total debt

*Capital includes total debt and total equity.

To meet our short-

and long-term liquidity requirements, we look

to a variety of funding sources, including

cash generated from operating activities,

our commercial paper and credit facility programs,

and our ability to

sell securities using our shelf registration

statement.

During the first six months of 2021, the primary uses

our available cash were $2,465 million to support

our ongoing capital expenditures and investments

program;

$1,171 million to pay dividends,

approximately $1.0 billion of hedging, transaction

and restructuring costs,

and $981 million to repurchase common stock.

During the first six months of 2021, our cash and

cash

equivalents increased by $3,617 million to

$6,608 million.

At June 30, 2021, we had cash and cash equivalents

of $6.6 billion, short-term investments of $2.3

billion, and

available borrowing capacity under our credit facility

of $5.7 billion, totaling over $14

billion of liquidity.

believe current cash balances and cash generated

by operations, together with access to

external sources of

funds as described below in the “Significant Changes

in Capital” section, will be sufficient to meet our

funding

requirements in the near- and long-term, including our capital

spending program, dividend payments and

required debt payments.

Significant Changes in Capital

Operating Activities

Cash provided by operating activities was $6,331

million for the first six months of 2021, compared

with

$2,262 million for the corresponding period of 2020.

The increase in cash provided by operating activities

primarily due to higher realized commodity prices

and higher sales volumes mostly due to our acquisition

Concho.

The increase in cash provided by operating activities

was partly offset by the settlement of all oil and

gas hedging positions acquired from Concho,

normal field decline, transaction and restructuring

costs, and the

divestiture of our Australia-West assets.

Our short-

and long-term operating cash flows are highly

dependent upon prices for crude oil, bitumen, natural

gas, LNG and NGLs.

Prices and margins in our industry have historically

been volatile and are driven by

market conditions over which we have no control.

Absent other mitigating factors, as these prices

and margins

fluctuate, we would expect a corresponding change

in our operating cash flows.

The level of absolute production volumes, as

well as product and location mix, impacts our cash flows.

Future

production is subject to numerous uncertainties, including,

among others, the volatile crude oil and natural

gas

price environment, which may impact investment

decisions; the effects of price changes on production

sharing

and variable-royalty contracts; acquisition and disposition

of fields; field production decline rates; new

technologies; operating efficiencies; timing of startups

and major turnarounds; political instability;

impacts of

a global pandemic; weather-related disruptions;

and the addition of proved reserves through exploratory

success and their timely and cost-effective development.

While we actively manage these factors, production

levels can cause variability in cash flows, although

generally this variability has not been as significant

as that

caused by commodity prices.

To maintain or grow our production volumes, we must continue to add to our

proved reserve base.

See the

“Capital Expenditures and Investments” section,

for information about our capital expenditures

and

investments.

On January 15, 2021, we assumed financial derivative

instruments consisting of oil and natural gas

swaps in

connection with our acquisition of Concho.

At March 31, 2021, all oil and natural gas derivative

financial

instruments acquired from Concho were contractually

settled.

In the first six months of 2021, we paid $761

million relating to these settlements.

See Note 10 for additional information.

Investing Activities

For the first six months of 2021, we invested $2.5

billion in capital expenditures.

Our 2021 operating plan

capital expenditures is currently expected to be

$5.3 billion compared with $4.7 billion

in 2020.

See the

“Capital Expenditures and Investments” section,

for information about our capital expenditures

and

investments.

We completed our acquisition of Concho on January 15, 2021.

The assets acquired in the transaction included

$382 million of cash.

See Note 3 for additional information.

In May 2021, we announced a paced monetization

of our investment in CVE common shares with

the plan to

direct proceeds toward our existing share repurchase

authorization program.

We expect to fully dispose of our

CVE shares by year-end 2022, however, the sales pace will

be guided by market conditions, and we retain

discretion to adjust accordingly.

In the second quarter of 2021, we sold 20 million

of these shares,

representing approximately 10% of the shares held

at December 31, 2020, for $180 million

of proceeds.

See

Note 5 for additional information.

We invest in short-term investments as part of our cash investment strategy, the primary objective of which is

to protect principal, maintain liquidity and provide

yield and total returns; these investments include

time

deposits, commercial paper, as well as debt securities classified

as available for sale.

Funds for short-term

needs to support our operating plan and provide resiliency

to react to short-term price volatility are invested

highly liquid instruments with maturities within

the year.

Funds we consider available to maintain resiliency

in longer term price downturns and to capture

opportunities outside a given operating plan

may be invested in

instruments with maturities greater than one year.

Investing activities in the first six months of 2021

included net sales of $1,302 million of investments.

We sold

$1,403 million of short-term instruments

and invested $101 million in long-term instruments.

See Note 10 for

additional information.

Financing Activities

We have a revolving credit facility totaling $6.0 billion, expiring in May 2023.

Our revolving credit facility

may be used for direct bank borrowings, the issuance

of letters of credit totaling up to $500 million, or

support for our commercial paper program.

The revolving credit facility is broadly syndicated

among financial

institutions and does not contain any material

adverse change provisions or any covenants

requiring

maintenance of specified financial ratios or credit

ratings.

The facility agreement contains a cross-default

provision relating to the failure to pay principal or interest

on other debt obligations of $200 million or more

by ConocoPhillips, or any of its consolidated subsidiaries.

The amount of the facility is not subject to

redetermination prior to its expiration date.

Credit facility borrowings may bear interest at a margin above

rates offered by certain designated banks in the

London interbank market or at a margin above the overnight

federal funds rate or prime

rates offered by

certain designated banks in the U.S.

The facility agreement calls for commitment

fees on available, but

unused, amounts.

The facility agreement also contains early termination

rights if our current directors or their

approved successors

cease to be a majority of the Board of

Directors.

The revolving credit facility supports ConocoPhillips

Company’s ability to issue up to $6.0 billion of

commercial paper.

Commercial paper maturities are generally

limited to 90 days.

With $300 million of

commercial paper outstanding and no direct borrowings

or letters of credit, we had $5.7 billion in

available

borrowing capacity under the revolving credit facility

at June 30, 2021.

We may consider issuing additional

commercial paper in the future to supplement our

cash position.

On January 15, 2021, we completed the acquisition

of Concho in an all-stock transaction.

In the acquisition,

we assumed Concho’s publicly traded debt, which was recorded at fair value

of $4.7 billion on the acquisition

date.

In June 2021, we reaffirmed our commitment to preserving

our ‘A’-rated balance sheet with the intent to

reduce gross debt by $5 billion over the next five

years, driving a more resilient and efficient

capital structure.

See Note 3 for additional information on our Concho acquisition and

see Note 6 for additional information on

the debt.

In January 2021, Fitch affirmed its rating of our long-term

debt as “A” with a “stable” outlook and affirmed its

rating of our short-term debt as “F1+.” On January

25, 2021, S&P revised its industry risk

assessment of the

E&P industry to “Moderately High” from “Intermediate”

based on a view of increasing risks from the energy

transition, price volatility, and weaker profitability.

On February 11, 2021, S&P downgraded its rating of our

long-term debt from “A” to “A-” with a “stable”

outlook and downgraded its rating of

our short-term debt

from “A-1” to “A-2.”

In May 2021, Moody’s affirmed its rating of our senior long-term debt of

“A3” with a

“stable” outlook.

Moody’s rates our short-term debt as “Prime-2.”

We do not have any ratings triggers on any

of our corporate debt that would cause an automatic

default, and thereby impact our access to liquidity, upon

downgrade of our credit ratings.

If our credit ratings are downgraded from their

current levels, it could

increase the cost of corporate debt available to

us and restrict our access to the commercial

paper markets.

our credit rating were to deteriorate to a level

prohibiting us from accessing the commercial

paper market, we

would still be able to access funds under our revolving

credit facility.

Certain of our project-related contracts, commercial

contracts and derivative instruments contain

provisions

requiring us to post collateral.

Many of these contracts and instruments permit

us to post either cash or letters

of credit as collateral.

At June 30, 2021 and December 31, 2020,

we had direct bank letters of credit of $222

million and $249 million, respectively, which secured performance obligations

related to various purchase

commitments incident to the ordinary conduct of

business.

In the event of credit ratings downgrades, we

may

be required to post additional letters of

credit.

Shelf Registration

We have a universal shelf registration statement on file with the SEC under which

we have the ability to issue

and sell an indeterminate amount of various types

of debt and equity securities.

Guarantor Summarized Financial Information

We have various cross guarantees among our Obligor group; ConocoPhillips,

ConocoPhillips Company and

Burlington Resources LLC, with respect to publicly

held debt securities.

ConocoPhillips Company is 100

percent owned by ConocoPhillips.

Burlington Resources LLC is 100 percent owned by

ConocoPhillips

Company.

ConocoPhillips and/or ConocoPhillips Company

have fully and unconditionally guaranteed the

payment obligations of Burlington Resources

LLC, with respect to its publicly held debt

securities.

Similarly,

ConocoPhillips has fully and unconditionally

guaranteed the payment obligations of ConocoPhillips

Company

with respect to its publicly held debt securities.

In addition, ConocoPhillips Company

has fully and

unconditionally guaranteed the payment obligations

of ConocoPhillips with respect to its publicly

held debt

securities.

All guarantees are joint and several.

The following tables present summarized financial

information for the Obligor Group, as defined

below:

●

The Obligor Group will reflect guarantors and

issuers of guaranteed securities consisting of

ConocoPhillips, ConocoPhillips Company and

Burlington Resources LLC.

●

Consolidating adjustments for elimination

of investments in and transactions between the collective

guarantors and issuers of guaranteed securities

are reflected in the balances of the summarized

financial information.

●

Non-Obligated Subsidiaries are excluded

from the presentation.

Upon completion of the Concho acquisition

on January 15, 2021, we assumed Concho’s publicly traded debt

of approximately $3.9 billion in aggregate principal

amount, which was recorded at fair value

of $4.7 billion

on the acquisition date.

We completed a debt exchange offer that settled on February 8, 2021, of which 98

percent, or approximately $3.8 billion in aggregate

principal amount of Concho’s notes, were tendered and

accepted for new debt issued by ConocoPhillips.

The new debt issued in the exchange is fully

and

unconditionally guaranteed by ConocoPhillips

Company.

Both the guarantor and issuer of the exchange debt

is reflected within the Obligor Group presented

here.

See

Note 3

and

Note 6

for additional information

relating to the Concho transaction.

Transactions and balances reflecting activity between the Obligors

and Non-Obligated Subsidiaries are

presented below:

Summarized Income Statement Data

Millions of Dollars

Six Months Ended

June 30, 2021

Revenues and Other Income

13,054

Income (loss) before income taxes

3,138

Net income (loss)

3,073

Net Income (Loss) Attributable to ConocoPhillips

3,073

Summarized Balance Sheet Data

Millions of Dollars

June 30

December 31

2021

2020

Current assets

10,597

8,535

Amounts due from Non-Obligated Subsidiaries, current

585

440

Noncurrent assets

58,272

37,180

Amounts due from Non-Obligated Subsidiaries, noncurrent

8,326

7,730

Current liabilities

5,322

3,797

Amounts due to Non-Obligated Subsidiaries, current

2,004

1,365

Noncurrent liabilities

25,829

18,627

Amounts due to Non-Obligated Subsidiaries, noncurrent

7,526

3,972

Capital Requirements

For information about our capital expenditures

and investments, see the “Capital Expenditures

and

Investments” section.

Our debt balance at June 30, 2021, was $20.0

billion, compared with $15.4 billion at December

31, 2020.

The

net increase is primarily due to $4.7 billion of

debt assumed in the Concho acquisition.

The current portion of

debt, including payments for finance leases, is

$1,205 million.

Payments will be made using current cash

balances and cash generated by operations.

For additional information regarding debt, see Note 6.

We believe in delivering value to our shareholders through a growing and sustainable

dividend supplemented

by additional returns of capital, including share repurchases.

In 2020, we paid $1.8 billion, equating to $1.69

per share of common stock, in dividends.

We anticipate returning $2.3 billion to shareholders in the form of

dividends in 2021.

In the first six months of 2021, we paid

dividends totaling $1.2 billion, the equivalent of

$0.86 per share. On July 13, 2021, we announced

a quarterly dividend of $0.43 per share, payable

September

1, 2021.

In late 2016, we initiated our current share repurchase

program, which has a total program authorization

repurchase $25 billion of our common stock.

As of June 30, 2021, our plan is to repurchase approximately

$3.5 billion in 2021 and we anticipate funding

approximately $1.0 billion of that amount

through proceeds

from the sales of our CVE common stock.

The pace of CVE share sales will be guided

by market conditions,

and we retain the discretion to adjust accordingly.

In the six months ended June 30, 2021, we repurchased

17.7 million shares at a cost of $981 million, $159

million of which was funded using CVE share

proceeds.

Since the inception of the program, we have repurchased

206 million shares at a cost of $11.5 billion.

Our dividend and share repurchase programs are

subject to numerous considerations, including

market

conditions, management discretion and other factors.

See “Item 1A—Risk Factors – Our ability to declare

and

pay dividends and repurchase shares is subject to

certain considerations” in Part I—Item

1A in our 2020

Annual Report on Form 10-K.

Capital Expenditures and Investments

Millions of Dollars

Six Months Ended

June 30

2021

2020

Alaska

463

732

Lower 48

1,480

1,130

Canada

142

Europe, Middle East and North Africa

257

251

Asia Pacific

148

188

Other International

Corporate and Other

Capital expenditures and investments

2,465

2,525

During the first six months of 2021, capital expenditures

and investments supported key exploration and

development programs, primarily:

●

Development and appraisal activities

in the Lower 48, primarily Permian, Eagle Ford, and Bakken.

●

Appraisal and development activities

in Alaska related to the Western North Slope and development

activities in the Greater Kuparuk Area.

●

Appraisal activities in liquids-rich plays and optimization

of oils sands development in Canada.

●

Continued development activities across assets

in Norway.

●

Continued development activities in China, Malaysia

and Indonesia.

In February 2021, we announced 2021 operating

plan capital expenditures of $5.5 billion.

In June 2021, we

reduced capital guidance to $5.3 billion, recognizing

synergistic savings from our Concho acquisition.

Contingencies

A number of lawsuits involving a variety of claims

arising in the ordinary course of business

have been filed

against ConocoPhillips.

We also may be required to remove or mitigate the effects on the environment of the

placement, storage, disposal or release of certain

chemical, mineral and petroleum substances

at various active

and inactive sites.

We regularly assess the need for accounting recognition or disclosure of these

contingencies.

In the case of all known contingencies (other

than those related to income taxes), we accrue

liability when the loss is probable, and the amount

is reasonably estimable.

If a range of amounts can be

reasonably estimated and no amount within the range

is a better estimate than any other amount,

then the low

end of the range is accrued.

We do not reduce these liabilities for potential insurance or third-party recoveries.

We accrue receivables for insurance or other third-party recoveries when applicable.

With respect to income

tax-related contingencies, we use a cumulative probability-weighted

loss accrual in cases where sustaining a

tax position is less than certain.

Based on currently available information, we believe

it is remote that future costs related to known

contingent

liability exposures will exceed current accruals by

an amount that would have a material

adverse impact on our

consolidated financial statements.

For information on other contingencies, see Note 9.

Legal and Tax Matters

We are subject to various lawsuits and claims including but not limited to matters

involving oil and gas royalty

and severance tax payments, gas measurement and

valuation methods, contract disputes,

environmental

damages, climate change, personal injury, and property damage.

Our primary exposures for such matters

relate to alleged royalty and tax underpayments

on certain federal, state and privately owned

properties,

claims

of alleged environmental contamination from

historic operations,

and other contract disputes.

We will

continue to defend ourselves vigorously in these matters.

Our legal organization applies its knowledge, experience

and professional judgment to the specific

characteristics of our cases, employing a litigation

management process to manage and monitor the

legal

proceedings against us.

Our process facilitates the early evaluation and

quantification of potential exposures in

individual cases.

This process also enables us to track those cases that

have been scheduled for trial and/or

mediation.

Based on professional judgment and experience

in using these litigation management tools and

available information about current developments

in all our cases, our legal organization regularly assesses

the

adequacy of current accruals and determines if

adjustment of existing accruals, or establishment

of new

accruals, is required.

Environmental

We are subject to the same numerous international, federal, state and local environmental

laws and regulations

as other companies in our industry.

For a discussion of the most significant

of these environmental laws and

regulations, including those with associated remediation

obligations, see the “Environmental” section in

Management’s Discussion and Analysis of Financial Condition and Results

of Operations on pages 64–66

our 2020 Annual Report on Form 10-K.

We occasionally receive requests for information or notices of potential liability

from the EPA and state

environmental agencies alleging that we are

a potentially responsible party under the Federal

Comprehensive

Environmental Response, Compensation and

Liability Act (CERCLA) or an equivalent

state statute.

occasion, we also have been made a party to cost

recovery litigation by those agencies or by private

parties.

These requests, notices and lawsuits assert potential

liability for remediation costs at various sites

that typically

are not owned by us, but allegedly contain waste attributable

to our past operations.

As of June 30, 2021, there

were 15 sites around the U.S.

in which we were identified as a potentially responsible

party under CERCLA

and comparable state laws.

At June 30, 2021, our balance sheet included a total

environmental accrual of $188 million,

compared with

$180 million at December 31, 2020, for remediation

activities in the U.S. and Canada.

We expect to incur a

substantial amount of these expenditures within

the next 30 years.

Notwithstanding any of the foregoing, and as

with other companies engaged in similar businesses,

environmental costs and liabilities are inherent

concerns in our operations and products, and there

can be no

assurance that material costs and liabilities

will not be incurred.

However, we currently do not expect any

material adverse effect upon our results of operations or financial

position as a result of compliance with

current environmental laws and regulations.

Climate Change

Continuing political and social attention to the

issue of global climate change has resulted in

a broad range of

proposed or promulgated state, national and international

laws focusing on GHG reduction.

These proposed or

promulgated laws apply or could apply in countries

where we have interests or may have interests

in the future.

Laws in this field continue to evolve, and

while it is not possible to accurately estimate either

a timetable for

implementation or our future compliance costs

relating to implementation, such laws, if

enacted, could have a

material impact on our results of operations and

financial condition.

For examples of legislation or precursors

for possible regulation and factors on which the

ultimate impact on our financial performance

will depend, see

the “Climate Change” section in Management’s Discussion and Analysis

of Financial Condition and Results of

Operations on pages 67–69 of our 2020 Annual

Report on Form 10-K.

Climate Change Litigation

Beginning in 2017, governmental and other entities

in several states in the U.S. have filed lawsuits against

oil

and gas companies, including ConocoPhillips,

seeking compensatory damages and equitable

relief to abate

alleged climate change impacts.

Additional lawsuits with similar allegations

are expected to be filed.

The

amounts claimed by plaintiffs are unspecified and the legal

and factual issues involved in these cases are

unprecedented.

ConocoPhillips believes these lawsuits are

factually and legally meritless and are an

inappropriate vehicle to address the challenges associated

with climate change and will vigorously defend

against such lawsuits.

Several Louisiana parishes and the State of Louisiana

have filed 43 lawsuits under Louisiana’s State and Local

Coastal Resources Management Act (SLCRMA)

against oil and gas companies, including ConocoPhillips,

seeking compensatory damages for contamination

and erosion of the Louisiana coastline

allegedly caused by

historical oil and gas operations.

ConocoPhillips entities are defendants in

22 of the lawsuits and will

vigorously defend against them.

Because Plaintiffs’ SLCRMA theories are unprecedented,

there is uncertainty

about these claims (both as to scope and damages)

and we continue to evaluate our exposure in these

lawsuits.

Company Response to Climate-Related Risks

The company has responded by putting in place

a Sustainable Development Risk Management

Standard

covering the assessment and registering of significant

and high sustainable development risks based

on their

consequence and likelihood of occurrence.

We have developed a company-wide Climate Change Action Plan

with the goal of tracking mitigation activities

for each climate-related risk included in the corporate

Sustainable Development Risk Register.

The risks addressed in our Climate Change Action

Plan fall into four broad categories:

●

GHG-related legislation and regulation.

●

GHG emissions management.

●

Physical climate-related impacts.

●

Climate-related disclosure and reporting.

Emissions are categorized into three different scopes.

Gross operated scope 1 and scope 2 GHG

emissions

help us understand our climate transition

risk.

●

Scope 1 emissions are direct GHG emissions

from sources that we own or control.

●

Scope 2 emissions are GHG emissions from

the generation of purchased electricity or

steam that we

consume.

Scope 3 emissions are indirect emissions

from sources that we neither own nor control.

We announced in October 2020 the adoption of a Paris-aligned climate risk framework

with the objective of

implementing a coherent set of choices designed

to facilitate the success of our existing exploration

and

production business through the energy transition.

Given the uncertainties remaining about how the

energy

transition will evolve, the strategy aims to be robust

across a range of potential future outcomes.

The strategy is comprised of four pillars:

●

Targets:

Our target framework consists of a hierarchy of targets, from a long-term

ambition that sets

the direction and aim of the strategy, to a medium-term performance target for GHG emissions

intensity, to shorter-term targets for flaring and methane intensity reductions. These

performance

targets are supported by lower-level internal business

unit goals to enable the company to achieve the

company-wide targets.

We have set a target to reduce our gross operated (scope 1 and 2) emissions

intensity by 35 to 45 percent from 2016 levels by

2030, with an ambition to achieve net-zero

operated

emissions by 2050.

We have joined the World

Bank Flaring Initiative to work towards zero

routine

flaring of gas by 2030.

●

Technology choices: We

expanded our Marginal Abatement Cost Curve process

to provide a broader

range of opportunities for emission reduction

technology.

●

Portfolio choices:

Our corporate authorization process requires

all qualifying projects to include a

GHG price in their project approval economics.

Different GHG prices are used depending on the

region or jurisdiction.

Projects in jurisdictions with existing GHG

pricing regimes incorporate the

existing GHG price and forecast into their

economics.

Projects where no existing GHG pricing

regime exists utilize a scenario forecast from

our internally consistent World Energy Model.

In this

way, both existing and emerging regulatory requirements are considered in our decision-making.

The

company does not use an estimated market cost

of GHG emissions when assessing reserves

jurisdictions without existing GHG regulations.

●

External engagement:

Our external engagement aims to differentiate ConocoPhillips

within the oil and

gas sector with our approach to managing climate-related

risk.

We are a Founding Member of the

Climate Leadership Council (CLC), an international

policy institute founded in collaboration

with

business and environmental interests to develop

a carbon dividend plan.

Participation in the CLC

provides another opportunity for ongoing dialogue

about carbon pricing and framing the issues

alignment with our public policy principles.

We also belong to and fund Americans For Carbon

Dividends, the education and advocacy branch of

the CLC.

CAUTIONARY STATEMENT

FOR THE PURPOSES OF THE “SAFE HARBOR”

PROVISIONS OF

THE PRIVATE

SECURITIES LITIGATION REFORM ACT OF 1995

This report includes forward-looking statements

within the meaning of Section 27A of the Securities

Act of

1933 and Section 21E of the Securities Exchange

Act of 1934.

All statements other than statements of

historical fact included or incorporated by reference in

this report, including, without limitation,

statements

regarding our future financial position, business

strategy, budgets, projected revenues, projected costs and

plans, objectives of management for future operations,

the anticipated benefits of the transaction

between us

and Concho Resources Inc. (Concho), the anticipated

impact of the transaction on the combined company’s

business and future financial and operating results,

the expected amount and the timing of synergies from

the

transaction are forward-looking statements.

Examples of forward-looking statements contained

in this report

include our expected production growth and

outlook on the business environment generally, our expected

capital budget and capital expenditures, and discussions

concerning future dividends.

You can often identify

our forward-looking statements by the words “anticipate,”

“believe,” “budget,” “continue,” “could,” “effort,”

“estimate,” “expect,” “forecast,” “intend,” “goal,”

“guidance,” “may,” “objective,” “outlook,” “plan,”

“potential,” “predict,” “projection,” “seek,” “should,”

“target,” “will,” “would” and similar expressions.

We based the forward-looking statements on our current expectations, estimates

and projections about

ourselves and the industries in which we operate in

general.

We caution you these statements are not

guarantees of future performance as they involve

assumptions that, while made in good faith,

may prove to be

incorrect, and involve risks and uncertainties

we cannot predict.

In addition, we based many of these forward-

looking statements on assumptions about future events

that may prove to be inaccurate.

Accordingly, our

actual outcomes and results may differ materially from

what we have expressed or forecast in the forward-

looking statements.

Any differences could result from a variety of factors

and uncertainties, including, but not

limited to, the following:

●

The impact of public health crises, including pandemics

(such as COVID-19) and epidemics and any

related company or government policies or

actions.

●

Global and regional changes in the demand, supply, prices, differentials or other market

conditions

affecting oil and gas, including changes resulting from a

public health crisis or from the imposition or

lifting of crude oil production quotas or other

actions that might be imposed by OPEC

and other

producing countries and the resulting company

or third-party actions in response to such changes.

●

Fluctuations in crude oil, bitumen, natural gas,

LNG and NGLs prices, including a prolonged

decline

in these prices relative to historical or future

expected levels.

●

The impact of significant declines in prices for

crude oil, bitumen, natural gas, LNG and NGLs,

which

may result in recognition of impairment charges on

our long-lived assets, leaseholds and

nonconsolidated equity investments.

●

Potential failures or delays in achieving expected

reserve or production levels from existing

and future

oil and gas developments, including due to operating

hazards, drilling risks and the inherent

uncertainties in predicting reserves and reservoir

performance.

●

Reductions in reserves replacement rates, whether

as a result of the significant declines in commodity

prices or otherwise.

●

Unsuccessful exploratory drilling activities

or the inability to obtain access to exploratory acreage.

●

Unexpected changes in costs or technical requirements

for constructing, modifying or operating E&P

facilities.

●

Legislative and regulatory initiatives

addressing environmental concerns, including initiatives

addressing the impact of global climate change or further

regulating hydraulic fracturing, methane

emissions, flaring or water disposal.

●

Lack of, or disruptions in, adequate and reliable

transportation for our crude oil, bitumen, natural

gas,

LNG and NGLs.

●

Inability to timely obtain or maintain permits,

including those necessary for construction, drilling

and/or development, or inability to make capital

expenditures required to maintain compliance

with

any necessary permits or applicable laws or regulations.

●

Failure to complete definitive agreements and feasibility

studies for, and to complete construction of,

announced and future E&P and LNG development

in a timely manner (if at all) or on

budget.

●

Potential disruption or interruption of our operations

due to accidents, extraordinary weather events,

civil unrest, political events, war, terrorism, cyber attacks,

and information technology failures,

constraints or disruptions.

●

Changes in international monetary conditions and

foreign currency exchange rate fluctuations.

●

Changes in international trade relationships,

including the imposition of trade restrictions

or tariffs

relating to crude oil, bitumen, natural gas,

LNG, NGLs and any materials or products (such

aluminum and steel) used in the operation of our

business.

●

Substantial investment in and development use

of, competing or alternative energy sources, including

as a result of existing or future environmental

rules and regulations.

●

Liability for remedial actions, including removal

and reclamation obligations, under existing

and

future environmental regulations and litigation.

●

Significant operational or investment changes imposed

by existing or future environmental

statutes

and regulations, including international agreements

and national or regional legislation and regulatory

measures to limit or reduce GHG emissions.

●

Liability resulting from litigation, including the

potential for litigation related to the

transaction with

Concho, or our failure to comply with applicable

laws and regulations.

●

General domestic and international economic and

political developments, including armed

hostilities;

expropriation of assets; changes in governmental

policies relating to crude oil, bitumen, natural

gas,

LNG and NGLs pricing; regulation or taxation;

and other political, economic or diplomatic

developments.

●

Volatility

in the commodity futures markets.

●

Changes in tax and other laws, regulations (including

alternative energy mandates), or royalty rules

applicable to our business.

●

Competition and consolidation in the oil and gas

E&P industry.

●

Any limitations on our access to capital or increase

in our cost of capital, including as a result

illiquidity or uncertainty in domestic or international

financial markets or investment sentiment.

●

Our inability to execute, or delays in the completion,

of any asset dispositions or acquisitions

we elect

to pursue.

●

Potential failure to obtain, or delays in obtaining,

any necessary regulatory approvals for pending

future asset dispositions or acquisitions,

or that such approvals may require modification

to the terms

of the transactions or the operation of our remaining

business.

●

Potential disruption of our operations as a result

of pending or future asset dispositions or acquisitions,

including the diversion of management time and

attention.

●

Our inability to deploy the net proceeds from any

asset dispositions that are pending or

that we elect to

undertake in the future in the manner and timeframe

we currently anticipate, if at all.

●

Our inability to liquidate the common stock issued

to us by Cenovus Energy as part of our sale of

certain assets in western Canada at prices we deem

acceptable, or at all.

●

The operation and financing of our joint ventures.

●

The ability of our customers and other contractual

counterparties to satisfy their obligations to

us,

including our ability to collect payments

when due from the government of Venezuela or PDVSA.

●

Our inability to realize anticipated cost savings

and capital expenditure reductions.

●

The inadequacy of storage capacity for our products,

and ensuing curtailments, whether voluntary

involuntary, required to mitigate this physical constraint.

●

Our ability to successfully integrate Concho’s business and fully achieve

the expected benefits and

cost reductions associated with the transaction

with Concho in a timely manner or at all.

●

The risk that we will be unable to retain and hire

key personnel.

●

Unanticipated difficulties or expenditures relating to integration

with Concho.

●

Uncertainty as to the long-term value of our common

stock.

●

The diversion of management time on integration-related

matters.

●

The factors generally described in Part I—Item 1A

in our 2020 Annual Report on Form

10-K and any

additional risks described in our other filings

with the SEC.

Item 3.

QUANTITATIVE

AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

Information about market risks for the six months

ended June 30, 2021, does not differ materially

from that

discussed under Item 7A in our 2020 Annual Report

on Form 10-K.

Item 4.

CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures designed to ensure information required

to be disclosed in

reports we file or submit under the Securities

Exchange Act of 1934, as amended (the Act),

is recorded,

processed, summarized and reported within the

time periods specified in SEC rules and forms,

and that such

information is accumulated and communicated

to management, including our principal executive

and principal

financial officers, as appropriate, to allow timely decisions

regarding required disclosure.

At June 30, 2021,

with the participation of our management, our Chairman

and Chief Executive Officer (principal executive

officer) and our Executive Vice President and Chief Financial Officer (principal financial

officer) carried out

an evaluation, pursuant to Rule 13a-15(b) of

the Act, of ConocoPhillips’ disclosure controls

and procedures (as

defined in Rule 13a-15(e) of the Act).

Based upon that evaluation, our Chairman and

Chief Executive Officer

and our Executive Vice President and Chief Financial Officer concluded our disclosure

controls and

procedures were operating effectively at June 30, 2021.

There have been no changes in our internal

control over financial reporting, as defined

in Rule 13a-15(f) of the

Act, in the period covered by this report that

have materially affected, or are reasonably likely to materially

affect, our internal control over financial reporting.

PART

II.

OTHER INFORMATION

Item 1.

LEGAL PROCEEDINGS

There are no new material legal proceedings

or material developments with respect to

matters previously

disclosed in Item 3 of our 2020 Annual Report on

Form 10-K.

Item 1A.

RISK FACTORS

There have been no material changes from the

risk factors disclosed in Item 1A of our 2020

Annual Report on

Form 10-K.

Item 2.

UNREGISTERED SALES OF EQUITY

SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

Millions of Dollars

Period

Total Number of

Purchased

Average Price

Paid per Share

Total Number of

Shares Purchased as

Part of Publicly

Announced Plans or

Programs

Approximate Dollar

Value

of Shares That

May Yet Be

Purchased Under the

Plans or Programs

April 1-30, 2021

2,425,224

51.54

2,425,224

13,983

May 1-31, 2021

2,933,604

55.35

2,933,604

13,821

June 1-30, 2021

5,313,280

59.86

5,313,280

13,503

10,672,108

*There were no repurchases of common stock from company employees in connection with the company's broad-based employee incentive plans.

In late 2016, we initiated our current share repurchase

program, which has a total program authorization

of $25

billion of our common stock.

In February 2021, we resumed our share repurchase

program to an annualized

level of $1.5 billion which was increased in June

to an annualized level of $2.5 billion.

In May 2021, we

announced a plan to dispose of our 208 million

CVE shares by year-end 2022.

The sales pace will be guided

by market conditions, with ConocoPhillips

retaining discretion to adjust accordingly.

The proceeds from this

disposition will be deployed towards incremental

share repurchases.

At June 30, 2021, we had repurchased $11.5

billion of shares, with $13.5 billion remaining

under our current

authorization.

Repurchases are made at management’s discretion, at prevailing

prices, subject to market

conditions and other factors.

Except as limited by applicable legal requirements,

repurchases may be

increased, decreased or discontinued at any time

without prior notice.

Shares of stock repurchased

under the

plan are held as treasury shares.

See the “Our ability to declare and pay dividends

and repurchase shares is

subject to certain considerations” section in Risk

Factors on page 31 of our 2020 Annual Report

Form 10-K.

Item 6.

EXHIBITS

10.1*

Compensation Resolutions regarding Matthew J. Fox, dated April 8, 2021.

10.2*

Form of Aircraft Time Sharing Agreement by and between certain executives and

ConocoPhillips, dated June 21, 2021.

31.1*

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities

Exchange Act of 1934.

31.2*

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities

Exchange Act of 1934.

32*

Certifications pursuant to 18 U.S.C. Section 1350.

101.INS*

Inline XBRL Instance Document.

101.SCH*

Inline XBRL Schema Document.

101.CAL*

Inline XBRL Calculation Linkbase Document.

101.LAB*

Inline XBRL Labels Linkbase Document.

101.PRE*

Inline XBRL Presentation Linkbase Document.

101.DEF*

Inline XBRL Definition Linkbase Document.

104*

Cover Page Interactive Data File (formatted

as Inline XBRL and contained in Exhibit 101).

* Filed herewith.

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 thereunto

duly authorized.

CONOCOPHILLIPS

/s/ Kontessa S. Haynes-Welsh

Kontessa S. Haynes-Welsh

Chief Accounting Officer

August 5, 2021