ConocoPhillips, Houston, (NYSE: COP) plans to acquire Houston-based Burlington Resources Inc. (NYSE: BR) in a transaction valued at $35.6 billion. The transaction will provide ConocoPhillips with natural gas exploration and production assets primarily in North America. Burlington shareholders will receive $46.50 in cash and 0.72 shares of ConocoPhillips common stock for each Burlington Resources share owned, representing a transaction value of $92 per share, based on the closing price of ConocoPhillips shares on Dec. 9, 2005. At year-end 2004, Burlington had total reserves of 2 billion barrels of oil equivalent. The company also has estimated 2005 production of approximately 475,000 barrels of oil equivalent per day. Pro-forma reserves for ConocoPhillips will be 10.5 billion barrels of oil equivalent as of year-end as 2004 and pro-forma 2005 production will be 2.3 million barrels of oil equivalent per day. Jim Mulva, chairman and chief executive of ConocoPhillips, says, "We are very pleased to have reached this agreement with Burlington Resources, and are excited about the opportunities it provides our respective companies and shareholders. With this transaction, ConocoPhillips will expand our portfolio of high quality, low-risk, long-lived gas reserves, and become a leading producer of natural gas in North America. The transaction also enhances ConocoPhillips production growth and North American gas supply position both in the near-term, through projects involving conventional and unconventional resources, and in the long-term through LNG (liquefied natural gas) and Arctic gas projects." Bobby S. Shackouls, chairman, president and CEOof Burlington Resources, says, "The combination of ConocoPhillips and Burlington Resources recognizes the substantial value we have created and acknowledges the success of our employees in building a great company with a strong asset base. Of equal importance, this transaction allows our shareholders, customers and employees to participate in the future growth of ConocoPhillips, a company that has the scale and scope to supply consumers from every facet of the oil and gas industry more efficiently." The combination of two companies is estimated to have an enterprise value of $135 billion ($106 billion of equity; $29 billion of net debt and preferred securities). Existing ConocoPhillips shareholders will own about 83% of ConocoPhillips following the transaction, while Burlington shareholders will own approximately 17%. ConocoPhillips will fund the acquisition through existing cash on hand, existing credit facilities, and new additional bank and bond debt. The company plans to use cash from operations in the years ahead to reduce its outstanding debt. Upon completion of the merger, Shackouls and Steven J. Shapiro, executive vice resident, finance and corporate development, will retire, and Randy L. Limbacher, currently executive vice president and chief operating officer of Burlington, will become executive vice president responsible for North and South America for ConocoPhillips. William B. Berry, currently executive vice president, exploration and production for ConocoPhillips, will become executive vice president responsible for Europe, Asia, Africa and the Middle East. Shackouls and William E. Wade, currently a director of Burlington Resources, will join ConocoPhillips' board. Goldman, Sachs & Co. and Citigroup Global Markets Inc. were financial advisors, and Wachtell, Lipton, Rosen & Katz was legal counsel to ConocoPhillips, while Morgan Stanley and J.P. Morgan Securities Inc. were financial advisors and Fried, Frank, Harris, Shriver & Jacobson LLP was legal counsel to Burlington.