8-KOther EventsExhibits & Filings

CONOCOPHILLIPS 8-K Report, Corporate Update (Jul 28, 2010)

Filed July 28, 2010For Securities:COP

Summary

ConocoPhillips announced a significant divestment of its stake in Lukoil, a Russian oil company. Through its subsidiary Springtime Holdings Limited, ConocoPhillips has entered into an agreement to sell 64,638,729 Lukoil ordinary shares to Lukoil Finance Limited for $53.25 per share. This transaction represents a substantial reduction in ConocoPhillips' exposure to Lukoil and is intended to generate capital for the company. Furthermore, Lukoil Finance holds a 60-day option to purchase any remaining Lukoil securities held by ConocoPhillips at a slightly higher price of $56 per share. Alongside this sale, ConocoPhillips has amended its shareholder agreement with Lukoil, allowing for immediate market sales of any residual Lukoil securities. The company explicitly stated its intention to use the proceeds from these sales primarily for share repurchases, signaling a strategic move to enhance shareholder value.

Key Highlights

  • 1ConocoPhillips to sell 64,638,729 Lukoil ordinary shares to Lukoil Finance at $53.25 per share.
  • 2Lukoil Finance has a 60-day option to purchase remaining ConocoPhillips interest in Lukoil at $56 per share.
  • 3Proceeds from the sale of Lukoil securities are primarily intended for ConocoPhillips' share repurchase program.
  • 4ConocoPhillips has amended its shareholder agreement with Lukoil, allowing immediate market sales of remaining Lukoil securities.
  • 5The transaction allows ConocoPhillips to reduce its investment and capital exposure in Lukoil.
  • 6The filing includes the Stock Purchase and Option Agreement and the amendment to the Shareholder Agreement as exhibits.

Frequently Asked Questions

ConocoPhillips, through its subsidiary Springtime Holdings Limited, is selling 64,638,729 ordinary shares of Lukoil to Lukoil Finance Limited, a subsidiary of OAO LUKOIL. They also retain an option for Lukoil Finance to purchase any remaining interest.

The primary stated purpose for the proceeds from the sale of Lukoil securities is to repurchase ConocoPhillips' own shares, indicating a strategy to enhance shareholder value.

Yes, ConocoPhillips still holds depositary receipts representing 98,728,900 shares in addition to the ordinary shares being sold. Lukoil Finance also has a 60-day option to purchase any remaining interest.

The Shareholder Agreement has been amended to allow ConocoPhillips to make market sales of Lukoil securities immediately. The company intends to sell any remaining securities it holds from time to time.