Fitch Rates ConocoPhillips' Sr Unsecured Notes 'A'

CHICAGO--(Business Wire)--
Fitch Ratings has assigned an 'A' Rating to ConocoPhillips' issuance of $3
billion in senior unsecured notes. The notes will be used primarily to refinance
existing commercial paper (CP) balances, as well as for general corporate
purposes and are expected to result in no increase in ConocoPhillips' current
debt levels.

Total debt at the company at the end of the 2009 first quarter stood at
approximately $29.4 billion, versus just $22.1 billion seen in the third quarter
of 2008. A substantial portion of the increase was driven by funding
requirements for the $5 billion Origin Energy coal bed methane joint venture
(JV) in Australia, which the company closed in October 2008, as well as higher
working capital requirements linked to the contango structure of the market and
related storage opportunities. Fitch also believes debt has also been used to
fill in gaps in current funding requirements brought about by low commodity
prices and service costs which have still not fully adjusted to a lower price
environment. Recent debt increases and share buybacks have weakened the
company's credit profile within the current 'A' rating.

Fitch's currently rates ConocoPhillips and its subsidiaries as follows:

ConocoPhillips

--Long-term Issuer Default Rating (IDR) 'A';

--Senior unsecured notes 'A';

--Bank revolver 'A';

--Term loan 'A';

--CP program 'F1';

--CPP Funding 'F1';

--Short-term IDR 'F1'.

ConocoPhillips Qatar Funding

--CP 'F1';

--Short-term IDR 'F1'.

Burlington Resources

--Senior unsecured 'A'.

Polar Tankers, Inc.

--Long-term IDR 'A';

--Senior Unsecured Notes 'A'.

ConocoPhillips Co.

--Long-term IDR 'A';

--Senior notes 'A'.

The Rating Outlook is Stable

ConocoPhillips' issuance is expected to enhance the company's net liquidity by
freeing up capacity on its revolver. Like other companies in the oil sector,
ConocoPhillips has responded to low commodity prices and margins by lowering
planned 2009 capital expenditures from previous levels and scaling back its
share buyback program. The company's current 2009 capital expenditure (capex)
estimate is $12.5 billion.

Concerns for the rating center primarily on the potential balance sheet
pressures created by trough commodity pricing and margins, significant exposure
to North American gas, and limited capex flexibility. As calculated by Fitch,
for the quarter ending March 31, 2009, ConocoPhillips generated negative free
cash flow of $1.72 billion, comprised of cash flow from operations of $1.89
billion, capex of $2.91 billion, and dividends of $696 million. WTI crude
averaged just $43.18/barrel in the first quarter. So far in the second quarter,
WTI oil prices have averaged notably higher at $52.20/barrel, although natural
gas remains down from first quarter averages. Looking forward, Fitch is
expecting free cash flow to remain negative over remaining quarters in 2009 but
ease somewhat given the improvement in oil prices and the possibility of
additional adjustments in the company's cost structure.

ConocoPhillips' liquidity remains reasonable. Near-term debt maturities in 2010
include $1.41 billion due in 2010, $3.16 billion due 2011, and $1.24 billion due
2012. The company's main $7.35 billion credit facility expires in September 2012
and has no financial covenants. The revolver can be used to support
ConocoPhillips' $7.35 billion CP program and includes $5.6 billion in COP CP,
$1.5 billion Qatar Funding CP program, and its $250 million Keystone Pipeline
joint venture. The main revolver can also be used for issuance of letters of
credit (LOCs) of up to $750 million. As of March 31, 2009, there were no
borrowings but $40 million in LOCs posted and $3.22 billion in CP outstanding,
leaving net availability of approximately $4.09 billion. While asset sales are
also possible, to date management has not indicated a strong desire to use this
as a source of funding.

ConocoPhillips is a large integrated oil company with a presence in just under
40 countries. Worldwide, it has the sixth largest proven reserves and fifth
largest portfolio of refining assets, excluding national oil companies. In 2008
consolidated E&P production was 1.767 million barrels per day, and total
reserves (including equity affiliates and LUKOIL) were 9.975 billion boe.
ConocoPhillips also owns and operates approximately 2.01 million barrels per day
of refining capacity, excluding the contributions of its Borger and Wood River
refineries to the heavy oil JV with Encana (WRB Refining LLC). COP's businesses
are broken out into six segments including: E&P, Midstream (including DCP
Pipeline), Refining & Marketing, LUKOIL Investment, Chemicals, and Emerging
Businesses. In 2008 ConocoPhillips took a $34 billion non-cash write down linked
to impairment of its E&P segment goodwill ($25.4 billion), the company's 20%
investment in LUKOIL ($7.3 billion) and other selective portfolio impairments
($1.3 billion).

Fitch's rating definitions and the terms of use of such ratings are available on
the agency's public site, www.fitchratings.com. Published ratings, criteria and
methodologies are available from this site, at all times. Fitch's code of
conduct, confidentiality, conflicts of interest, affiliate firewall, compliance
and other relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings, Chicago
Mark C. Sadeghian, CFA, 312-368-2090
Sean T. Sexton, CFA, 312-368-3130
or
Media Relations:
Cindy Stoller, 212-908-0526, New York
Email: cindy.stoller@fitchratings.com

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