ConocoPhillips: Strong Cash and Value (COP)

| About: ConocoPhillips (COP)

Buy-recommended ConocoPhillips (NYSE:COP) offers 41% appreciation potential to estimated net present value of $95 a share. That estimate appears low relative to present value with adjusted reserve life and next twelve months cash flow, taking into account first quarter 2006 results reported on April 26. The estimate also presumes a long-term oil price of $50 a barrel. Since COP is priced less than our estimate, at a McDep Ratio of 0.78, the stock appears priced for a long-term oil price of about $39 a barrel.

Meanwhile, the futures price for oil delivered over the next six years continues in a multi-year uptrend with the current quote at $72. As a result of the widening price gap, we may soon be raising our estimates. Present value is concentrated about half on oil, and a quarter each on natural gas and downstream.

Written April 27 2006
Kurt Wulff's McDep Associates offers realtime, independent research services for investors in the energy and utilities sectors. For more information, go to www.mcdep.com or email Mr. Wulff at kurt@mcdep.com.

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