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    ConocoPhillips, Hess Report Large Losses

    Oil company declines continue.

    HOUSTON -- ConocoPhillips and Hess reported large fourth-quarter net losses as the nation's oil industry works to overcome roller-coaster revenue and margins.

    ConocoPhillips Co. saw a net loss of $31.76 billion, compared with net income of $4.37 billion for the same quarter in 2007. Revenues were $44.5 billion vs. $52.7 billion a year ago.

    The company’s fourth-quarter 2008 results were affected by the substantial decline in global equity markets, commodity prices and margins and the company’s asset rationalization efforts and revised capital plans. These after-tax items included a $25.44 billion impairment of all exploration and production segment's goodwill, or intangible assets; a $7.41 billion impairment of the book value of the company’s investment in OAO LUKOIL (LUKOIL), reducing the book value to market value; and other asset impairments totaling $1.25 billion.

    Fourth-quarter 2008 adjusted earnings were $1.91 billion. This compares with fourth-quarter 2007 adjusted earnings of $4.10 billion.

    "Our financial performance for the quarter reflects the depressed economic conditions and business environment impacting not only our in" said Jim Mulva, chairman and CEO. "However, we ran well during the quarter, as our upstream business produced 2.32 million barrels of oil equivalent (BOE) per day, including our share of LUKOIL’s production, resulting in full-year production of 2.23 million BOE per day."

    For fiscal 2008, the company recorded a net loss of $16.99 billion, compared with 2007 net income of $11.89 billion. Full-year 2008 adjusted earnings were $16.43 billion. This compares with full-year 2007 adjusted earnings of $15.15 billion. Revenues were $240.8 billion vs. $187.4 billion a year ago.

    Among the factors affecting fourth-quarter adjusted earnings were lower U.S. realized refining margins, reflecting the significant decline in market crack spreads, which more than offset higher margins from secondary products and improved sour crude differentials, the company said. The fourth-quarter 2008 adjusted earnings were lower than fourth-quarter 2007 adjusted earnings primarily due to significantly lower U.S. refining margins, partially offset by higher international marketing margins.

    In other earnings news, Hess Corp. reported a net loss of $74 million for the fourth quarter, compared to net income of $510 million for the comparable 2007 period.

    In the fourth quarter of 2008, the corporation’s average worldwide crude oil selling price, including the effect of hedging, was $45 per barrel compared with $76.11 per barrel in the fourth quarter of 2007. Marketing and refining earnings were $152 million, compared to $31 million in the fourth quarter of 2007.

    Net cash provided by operating activities was $4.56 billion for the year 2008 compared with $3.50 billion for 2007. Capital and exploratory expenditures for 2008 amounted to $4.82 billion.

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