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Hi Art,

Can you tell me what happened to the dividend with the Marathon Oil deal? More specifically what happened to the spin-off as well as to the original company - did it affect the dividend in any way?

Marathon was split into MRO (the E&P) and MPC (the downstream) where 100 original shares stayed 100 shares of MRO plus 50 shares of MPC. Before the split MRO (the combined company) paid a divi of 25 cents quarterly. Post split, MRO paid 15 cents on Aug. 15. MPC paid a divi on Aug. 15 of 20 cents.

So, if you would have owned 100 shares of MRO before the split, you would have received a quarterly dividend of $25 bucks before the split.

Post split, you would have received $15 bucks from MRO and $10 from the 50 shares of MPC on Aug. 15 and that adds up to the same $25 you would have received if the split never happened.

Bottom line, there was no change in the total dollars received for shareholders.

What is more important to us though is what COP plans to do and Mulva addressed this on the CC that happened when the split was announced:

Blake Fernandez - Howard Weil - Analyst
Right, okay, thanks Jim. And then the second question, presumably some of the free cash flow generation over the next couple of years comes from the downstream. I am just wondering -- does this have no impact on the share repurchase program for the E&P division on a standalone basis?

Jim Mulva - ConocoPhillips - Chairman, CEO

. . . . . . . I will come back to the upstream, ConocoPhillips. What we have in mind is that there be no change in the dividend for ConocoPhillips. We're not reducing the dividend in ConocoPhillips. And as it goes forward, the dividend will, with time, subject to Board certainly approval, of raising the dividend.

If you look at the downstream company, it is going to have a dividend that is competitive and comparable to others and the pure plays in the downstream part of the business. So the shareholder gets the current dividend from ConocoPhillips, plus when done, is going to get cash in a form of a new dividend from the downstream company.

Blake Fernandez - Howard Weil - Analyst
Okay. And I'm sorry, just to clarify on that, Jim, are you saying that the yield itself will remain the same, or the absolute dividend will stay the same, plus you will get something from the downstream as well? So it will be incremental?

Jim Mulva - ConocoPhillips - Chairman, CEO
Absolute dividend of ConocoPhillips upstream as you know it today continues, and there will be a new dividend coming from the downstream company.

So, if Mulva is correct (and there is a bit of uncertainty because the makeup of the two companies isn't known for sure even by Mulva) then we can expect to keep our current dividend from COP at 66 cents per share. Plus, receive a dividend from the downstream stock comparable with other downstream businesses. What exactly that might be is hard to say. MPC's current yield is about 2.3%. VLO's yield is 1.0%. So, maybe it will fall in the 1.0% to 3.0% range. Whatever it is, it will all be gravy and on top of what we currently receive. Nice.

Also, has a long holder of COP, as is my intent, does this move concern or rattle you, or is it just the evolution of such things.

I have no concerns and am in no way rattled. I have no plans to sell any shares until well after the split is finalized and the share transfer is complete. As details of the split are released, I do reserve the right to change my mind, however.

I seem to remember some years back when it was the mantra of this company that it was better to be one giant lockstep machine after the Phillips/Conoco merger. I guess such things are cyclical in that depending on worldwide circumstances, as well as what's happening at home like tax and environmental issues a company has to do what they have to do to continue to prosper.

Mulva talked about this during the CC too. His answer was weak imho. I did speculate as to some possible underlying reasons why the split makes sense now, here:

And, I have nothing more to add at this time because there's been no new news.

I hope that helps,

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