Item 1A. RISK FACTORS

You

should carefully consider the following risk

factors in addition to the other information

included in this

Annual Report on Form 10-K.

These risk factors are not the only risks

we face.

Our business could also be

affected by additional risks and uncertainties not currently

known to us or that we currently consider to be

immaterial.

If any of these risks or other risks that are yet unknown

were to occur, our business, operating

results and financial condition, as well as the

value of an investment in our common stock

could be adversely

affected.

Risks Related to Our Industry

We have been negatively affected and may continue to be negatively affected by the prolonged drop in

commodity prices that began in early 2020.

The oil and gas business is fundamentally a commodity

business and our revenues, operating results

and future

rate of growth are highly dependent on the prices

we receive for crude oil, bitumen, natural gas,

NGLs and

LNG.

Such prices can fluctuate widely depending upon

global events or conditions that affect supply and

demand, most of which are out of our control.

Since early 2020, there has been a precipitous

decrease in

demand for oil globally, largely caused by the dramatic decrease in travel and commerce

resulting from the

COVID-19 pandemic.

See Item 7. Management’s Discussion and Analysis of Financial

Condition and Results

of Operations, for additional information

on commodity prices and how we have been

impacted.

There is no

assurance of when or if commodity prices will

return to pre-COVID-19 levels,

and if they do return to pre-

COVID levels, how long they will remain at those

levels.

The speed and extent of any recovery remains

uncertain and is subject to various risk factors,

including the duration, impact and actions taken

to stem the

proliferation of the COVID-19 pandemic, the extent

to which those nations party to the OPEC

plus production

agreement decide to increase production of crude

oil, bitumen, natural gas and NGLs and other factors

described herein.

Even after a recovery, our industry will continue to be exposed to the

effects of changing

commodity prices given the volatility

in commodity price drivers and the worldwide political

and economic

environment generally, as well as continued uncertainty caused by armed hostilities

in various oil-producing

regions around the globe.

Lower crude oil, bitumen, natural gas, NGL and

LNG prices may have a material adverse effect on our

revenues, earnings, cash flows and liquidity, and may also affect the amount of dividends

we elect to declare

and pay on our common stock.

As a result of the oil market downturn that

began in early 2020, we suspended

our share repurchase program.

Lower prices may also limit the amount of reserves

we can produce

economically, thus adversely affecting our proved reserves and reserve replacement ratio

and accelerating the

reduction in our existing reserve levels as we continue

production from upstream fields.

Prolonged depressed

crude oil prices may affect certain decisions related to

our operations, including decisions to reduce

capital

investments or curtail operated production.

Significant reductions in crude oil, bitumen, natural

gas, NGLs and LNG prices could also

require us to reduce

our capital expenditures, impair the carrying value

of our assets or discontinue the classification

of certain

assets as proved reserves.

In 2020, we recognized several impairments,

which are described in Note 7—

Suspended Wells and Exploration Expenses and Note 8—Impairments, in the Notes

to Consolidated Financial

Statements,

due to changes in assumptions for commodity

prices and development plans.

If the outlook for

commodity prices remains low relative to historic

levels, and as we continue to optimize our investments

and

exercise capital flexibility, it is reasonably likely we will incur future impairments

to long-lived assets used in

operations, investments in nonconsolidated entities

accounted for under the equity method and unproved

properties.

If oil and gas prices persist at depressed levels,

our reserve estimates may decrease further, which

could incrementally increase the rate used to determine

DD&A expense on our unit-of-production method

properties.

See Item 7. Management’s Discussion and Analysis for further examination

of DD&A rate impacts

versus comparative periods.

Although it is not reasonably practicable to quantify

the impact of any future

impairments or estimated change to our unit-of-production

rates at this time, our results of operations could

be

adversely affected as a result.

Our business has been, and will continue to

be, adversely affected by the coronavirus (COVID-19)

pandemic.

The COVID-19 pandemic and the measures put

in place to address it have negatively impacted

the global

economy, disrupted global supply chains, reduced global demand for oil

and gas, and created significant

volatility and disruption of financial and commodity

markets.

According to the National Bureau of Economic

Research, as a result of the pandemic and its broad

reach across the entire economy, the U.S. entered a

recession in early 2020 and the timing, pace and extent

of the recovery is still unknown.

Public health officials

have recommended or mandated certain precautions

to mitigate the spread of COVID-19, including limiting

non-essential gatherings of people, ceasing all

non-essential travel and issuing “social or

physical distancing”

guidelines, “shelter-in-place” orders and mandatory

closures or reductions in capacity for non-essential

businesses.

Although some of these limitations and mandates

have been relaxed in certain jurisdictions,

others

have been reinstated in areas that have experienced

a resurgence of COVID-19 cases.

In addition, despite

approval of vaccines to immunize against

COVID-19, the speed at which such vaccinations

will be available to

the public,

the public’s willingness to be inoculated and the effectiveness of the vaccine

(including to variants)

still remain unknown.

As a result, the full impact of the COVID-19

pandemic remains uncertain and will

depend on the severity, location and duration of the effects and spread of the disease,

the effectiveness and

duration of actions taken by authorities to contain

the virus or treat its effect, the availability and effectiveness

of vaccines or other treatments, and how quickly

and to what extent economic conditions improve.

We have already been impacted by the COVID-19 pandemic.

See Item 7. Management’s Discussion and

Analysis of Financial Condition and Results of

Operations, for additional information on how we have

been

impacted and the steps we have taken in response.

Our business is likely to continue to be further

negatively impacted by the COVID-19

pandemic.

These

impacts could include but are not limited

to:

●

Continued reduced demand

for our products as a result of prolonged reductions

in travel and

commerce,

even if restrictions are lifted;

●

Disruptions in our supply chain due in part to scrutiny

or embargoing of shipments from infected areas

or invocation of force majeure clauses in commercial

contracts due to restrictions imposed as a result

of the global response to the pandemic;

●

Failure of third parties on which we rely, including our suppliers, contract

manufacturers, contractors,

joint venture partners and external business partners,

to meet their obligations to the company, or

significant disruptions in their ability to

do so, which may be caused by their own financial

or

operational difficulties or restrictions imposed in

response to the disease outbreak;

●

Reduced workforce productivity caused by, but not limited to, illness, travel

restrictions, quarantine,

or government mandates;

●

Business interruptions resulting from a portion

of our workforce continuing to telecommute,

as well as

the implementation and maintenance of protections

for employees commuting for work, such as

personnel screenings and self-quarantines before or

after travel; and

●

Voluntary

or involuntary curtailments to support oil prices

or alleviate storage shortages for our

products.

Any of these factors, or other cascading effects of the

COVID-19 pandemic that are not currently foreseeable,

could materially increase our costs, negatively impact

our revenues and damage our financial condition,

results

of operations, cash flows and liquidity position.

Despite the rollout of vaccines, the pandemic

continues to

progress and evolve, and the full extent and duration

of any such impacts cannot be predicted

at this time

because of the sweeping impact of the COVID-19 pandemic

on daily life around the world and a lack of

certainty as to if or when conditions will return

to pre-COVID levels.

Unless we successfully add to our existing proved

reserves, our future crude oil, bitumen,

natural gas and

NGL production will decline, resulting in an

adverse impact to our business.

The rate of production from upstream fields

generally declines as reserves are depleted.

If we do not conduct

successful exploration and development activities,

or, through engineering studies, optimize production

performance or identify additional or secondary

recovery reserves, our proved reserves

will decline materially

as we produce crude oil, bitumen, natural gas and

NGLs, and our business will experience reduced cash

flows

and results of operations.

Any cash conservation efforts we may undertake as a result

of commodity price

declines may further limit our ability to replace

depleted reserves.

The exploration and production of oil and gas

is a highly competitive industry.

The exploration and production of crude oil,

bitumen, natural gas and NGLs is a highly

competitive business.

We compete with private, public and state-owned companies in all facets of the

exploration and production

business, including to locate and obtain new

sources of supply and to produce crude oil,

bitumen, natural gas

and NGLs in an efficient, cost-effective manner.

Some of our competitors are larger and have greater

resources than we do or may be willing to incur a

higher level of risk than we are willing to

incur to obtain

potential sources of supply.

In addition, we may be at a competitive disadvantage

when competing with state-

owned companies if they are motivated by political

or other factors in making their business decisions,

with

less emphasis on financial returns.

If we are not successful in our competition for

new reserves, our financial

condition and results of operations may be adversely

affected.

Any material change in the factors and assumptions

underlying our estimates of crude oil, bitumen,

natural

gas and NGL reserves could impair the quantity

and value of those reserves.

Our proved reserve information included in this annual

report represents management’s best estimates based

on assumptions, as of a specified date, of the volumes

to be recovered from underground accumulations of

crude oil, bitumen, natural gas and NGLs.

Such volumes cannot be directly measured

and the estimates and

underlying assumptions used by management are

subject to substantial risk and uncertainty.

Any material

changes in the factors and assumptions underlying

our estimates of these items could result

in a material

negative impact to the volume of reserves reported

or could cause us to incur impairment expenses

on property

associated with the production of those reserves.

Future reserve revisions could also result

from changes in,

among other things, governmental regulation.

Our business may be adversely affected by price controls,

government-imposed limitations on production

of

crude oil, bitumen, natural gas and NGLs, or the

unavailability of adequate gathering, processing,

compression, transportation, and pipeline

facilities and equipment for our production

of crude oil, bitumen,

natural gas and NGLs.

As discussed herein, our operations are subject

to extensive governmental regulations.

From time to time,

regulatory agencies have imposed price controls

and limitations on production by restricting

the rate of flow of

crude oil, bitumen, natural gas and NGL wells

below actual production capacity.

Because legal requirements

are frequently changed and subject to interpretation,

we cannot predict whether future restrictions

on our

business may be enacted or become applicable to

us.

Our ability to sell and deliver the crude oil, bitumen,

natural gas, NGLs and LNG that we produce

also

depends on the availability, proximity, and capacity of gathering, processing, compression, transportation

and

pipeline facilities and equipment, as well as any necessary

diluents to prepare our crude oil, bitumen, natural

gas, NGLs and LNG for transport.

The facilities, equipment and diluents we rely

on may be temporarily

unavailable to us due to market conditions, extreme

weather events, regulatory reasons, mechanical

reasons or

other factors or conditions, many of which are

beyond our control.

In addition, in certain newer plays, the

capacity of necessary facilities, equipment and diluents

may not be sufficient to accommodate production

from

existing and new wells, and construction and permitting

delays, permitting costs and regulatory or other

constraints could limit or delay the construction,

manufacture or other acquisition of new facilities

and

equipment.

If any facilities, equipment or diluents, or

any of the transportation methods and channels

that we

rely on become unavailable for any period of time,

we may incur increased costs to transport

our crude oil,

bitumen, natural gas, NGLs and LNG for sale or

we may be forced to curtail our production

of crude oil,

bitumen, natural gas or NGLs.

Our investments in joint ventures decrease

our ability to manage risk.

We conduct many of our operations through joint ventures in which we may share

control with our joint

venture partners.

There is a risk our joint venture participants may

at any time have economic, business or

legal interests or goals that are inconsistent with

those of the joint venture or us, or our joint

venture partners

may be unable to meet their economic or other

obligations and we may be required to

fulfill those obligations

alone.

Failure by us, or an entity in which we have

a joint venture interest, to adequately manage

the risks

associated with any operations, acquisitions or

dispositions could have a material adverse effect on the

financial condition or results of operations of our

joint ventures and, in turn, our business and

operations.

Our operations present hazards and risks that

require significant and continuous oversight.

The scope and nature of our operations present

a variety of significant hazards and risks, including

operational

hazards and risks such as explosions, fires,

crude oil spills, severe weather, geological events, labor disputes,

armed hostilities, terrorist attacks, sabotage, civil

unrest or cyber attacks.

Our operations may also be

adversely affected by unavailability, interruptions or accidents involving services

or infrastructure required to

develop, produce, process or transport our production,

such as contract labor, drilling rigs, pipelines, railcars,

tankers, barges or other infrastructure.

Our operations are subject to the additional hazards

of pollution,

releases of toxic gas and other environmental hazards

and risks.

Offshore activities may pose incrementally

greater risks because of complex subsurface

conditions such as higher reservoir pressures,

water depths and

metocean conditions.

All such hazards could result in loss of human

life, significant property and equipment

damage, environmental pollution, impairment

of operations, substantial losses to us and damage to

our

reputation.

Further, our business and operations may be disrupted if

we do not respond, or are perceived not to

respond, in an appropriate manner to any of these hazards

and risks or any other major crisis or if

we are

unable to efficiently restore or replace affected operational

components and capacity.

Legal and Regulatory Risks

We expect to continue to incur substantial capital expenditures and operating

costs as a result of our

compliance with existing and future environmental

laws and regulations.

Our business is subject to numerous laws and regulations

relating to the protection of the environment, which

are expected to continue to have an increasing

impact on our operations.

For a description of the most

significant of these environmental laws and regulations,

see the “Contingencies—Environmental” and

“Contingencies—Climate Change” sections

of Management’s Discussion and Analysis of Financial Condition

and Results of Operations.

These laws and regulations continue to increase in

both number and complexity

and affect our operations with respect to, among other things:

●

Permits required in connection with exploration,

drilling, production and other activities, including

those issued by national, subnational, and local authorities;

●

The discharge of pollutants into the environment;

●

Emissions into the atmosphere, such as nitrogen

oxides, sulfur dioxide, mercury and GHG emissions;

●

Carbon taxes;

●

The handling, use, storage, transportation, disposal

and cleanup of hazardous materials and hazardous

and nonhazardous wastes;

●

The dismantlement, abandonment and restoration

of our properties and facilities at the end of

their

useful lives;

and

●

Exploration and production activities

in certain areas, such as offshore environments, arctic fields,

oil

sands reservoirs and unconventional plays.

We have incurred and will continue to incur substantial capital, operating and maintenance,

and remediation

expenditures as a result of these laws and regulations.

Any failure by us to comply with existing

or future

laws, regulations and other requirements could result

in administrative or civil penalties, criminal

fines, other

enforcement actions or third-party litigation

against us.

To the extent these expenditures, as with all costs, are

not ultimately reflected in the prices of our products

and services, our business, financial

condition, results of

operations and cash flows in future periods could

be materially adversely affected.

Existing and future laws, regulations and internal

initiatives relating to global climate change,

such as

limitations on GHG emissions, may impact or limit

our business plans, result in significant expenditures,

promote alternative uses of energy or reduce demand

for our products.

Continuing political and social attention to the

issue of global climate change has resulted in

both existing and

pending international agreements and national,

regional or local legislation and regulatory

measures to limit

GHG emissions, such as cap and trade regimes, carbon

taxes, restrictive permitting, increased fuel efficiency

standards and incentives or mandates for renewable

energy.

For example, in December 2015, the U.S. joined

the international community at the 21st Conference

of the Parties of the United Nations Framework

Convention on Climate Change in Paris that

prepared an agreement requiring member countries

to review and

represent a progression in their intended GHG

emission reduction goals every five years

beginning in 2020.

While the U.S. previously withdrew from the

Paris Agreement, the new administration

has recommitted the

United States to the Paris Agreement, and a significant

number of U.S. state and local governments

and major

corporations headquartered in the U.S. have also announced

their intention to satisfy these commitments.

In

addition, our operations continue in countries around

the world which are party to, and have not announced

an

intent to withdraw from, the Paris Agreement.

The implementation of current agreements

and regulatory

measures, as well as any future agreements or measures

addressing climate change and GHG emissions,

may

adversely impact the demand for our products,

impose taxes on our products or operations or

require us to

purchase emission credits or reduce emission of

GHGs from our operations.

As a result, we may experience

declines in commodity prices or incur substantial

capital expenditures and compliance, operating, maintenance

and remediation costs, any of which may have

an adverse effect on our business and results of operations.

In October 2020, we announced the adoption of a

Paris-aligned climate risk framework, whereby

we

committed to a reduction of our gross operated

(scope 1 and 2) emissions intensity, with an ambition to

achieve net zero by 2050 from operated emissions.

We also endorsed the World Bank Zero Routine Flaring by

2030 initiative, with an ambition to meet that

goal by 2025 and reaffirmed our commitment to advocate

for

reduction of scope 3 emissions intensity through

our support for a U.S. carbon price.

Compliance with, and

achievement of, climate change related internal initiatives

such as the foregoing may increase costs, require

us

to purchase emission credits, or limit or

impact our business plans, potentially resulting in the

reduction to the

economic end-of-field life of certain assets

and an impairment of the associated net book

value.

Increasing attention to global climate change has

also resulted in pressure upon stockholders,

financial

institutions and/or financial markets to modify

their relationships with oil and gas companies

and to limit

investments and/or funding to such companies.

For example, in 2019 Norway’s Government Pension Fund

announced it would reduce its investment exposure

to companies that explore for oil and gas,

and in 2020 a

number of major financial institutions

announced that they would no longer finance oil and

gas exploration

projects in the Arctic.

As public pressure continues to mount, our access to

capital on terms we find favorable

(if it is available at all) may be limited and our costs

may increase or our business and results

of operations

may be otherwise adversely affected.

Furthermore, increasing attention to global climate

change has resulted in an increased likelihood

of

governmental investigations and private litigation,

which could increase our costs or otherwise adversely

affect

our business.

Beginning in 2017, cities, counties, governments

and other entities in several states in the U.S.

have filed lawsuits against oil and gas companies,

including ConocoPhillips, seeking compensatory

damages

and equitable relief to abate alleged climate change

impacts.

Additional lawsuits with similar allegations

are

expected to be filed.

The amounts claimed by plaintiffs are unspecified

and the legal and factual issues

involved in these cases are unprecedented.

ConocoPhillips believes these lawsuits are factually

and legally

meritless and are an inappropriate vehicle to address

the challenges associated with climate

change and will

vigorously defend against such lawsuits.

The ultimate outcome and impact to us cannot

be predicted with

certainty, and we could incur substantial legal costs associated with defending

these and similar lawsuits in the

future.

In addition, although we design and operate our

business operations to accommodate expected

climatic

conditions, to the extent there are significant

changes in the earth’s climate, such as more severe or frequent

weather conditions in the markets where we operate

or the areas where our assets reside, we could

incur

increased expenses, our operations could be adversely

impacted, and demand for our products could fall.

For more information on legislation or precursors

for possible regulation relating to global climate

change that

affect or could affect our operations and a description of the company’s response, see the

“Contingencies—

Climate Change” section of Management’s Discussion and Analysis of

Financial Condition and Results of

Operations.

Domestic and worldwide political and economic

developments could damage our operations and materially

reduce our profitability and cash flows.

Actions of the U.S., state, local and foreign

governments, through sanctions, tax and other

legislation,

executive order and commercial restrictions,

could reduce our operating profitability both

in the U.S. and

abroad.

In certain locations, restrictions

on our operations; special taxes or tax assessments;

and payment

transparency regulations that could require us to

disclose competitively sensitive information

or might cause us

to violate non-disclosure laws

of other countries have been imposed or proposed

by governments or certain

interest groups.

For example, in 2020 a ballot initiative

known as the Fair Share Act was proposed in the

state

of Alaska, which, if enacted would have increased

the state’s share of production revenues and required

producers to publicly disclose additional financial

information.

Although ultimately defeated, similar

initiatives may be proposed and may be successful

in the future.

The change in control of Congress and the

White House because of the 2020 election increases

the possibility of the promulgation of more stringent

regulations of our operations and the enactment

of tax law changes that may adversely affect the fossil

fuel

industry.

In addition, the current administration

may use the Congressional Review Act to repeal

the

regulations finalized in the last five months of the

prior administration.

We also cannot rule out the possibility

of similar regulatory shifts and attendant cost and

market access implications in other international

jurisdictions.

One area subject to significant political

and regulatory activity is the use of hydraulic

fracturing, an essential

completion technique that facilitates production

of oil and natural gas otherwise trapped in lower

permeability

rock formations.

A range of local, state, federal and national laws

and regulations currently govern or, in some

hydraulic fracturing operations, prohibit hydraulic

fracturing in some jurisdictions.

Although hydraulic

fracturing has been conducted safely for many

decades, a number of new laws, regulations

and permitting

requirements are under consideration which could

result in increased costs, operating restrictions,

operational

delays or could limit the ability to develop oil and

natural gas resources.

Certain jurisdictions in which we

operate have adopted or are considering regulations

that could impose new or more stringent

permitting,

disclosure or other regulatory requirements on

hydraulic fracturing or other oil and natural

gas operations,

including subsurface water disposal.

On January 27, 2021, the new administration

signed an executive order

directing the Secretary of the Interior to stop

issuing new oil and gas leases on federal

lands, allowing time to

review and reset the Federal Government’s oil and gas leasing program.

Existing production and permits

already issued on Federal lands were not impacted

by this order.

If this temporary moratorium were to be

extended indefinitely, we believe we can mitigate the impact for a considerable

period of time with our current

permits and adjusting our development plans across

our diverse acreage position.

In addition, certain interest groups have also

proposed ballot initiatives and constitutional

amendments

designed to restrict oil and natural gas development

generally and hydraulic fracturing in particular.

In the

event that ballot initiatives, local, state,

or national restrictions or prohibitions are adopted

and result in more

stringent limitations on the production and development

of oil and natural gas in areas where we conduct

operations, we may incur significant costs to

comply with such requirements or may experience

delays or

curtailment in the permitting or pursuit of exploration,

development or production activities.

Such compliance

costs and delays, curtailments, limitations or

prohibitions could have a material adverse effect on our

business,

prospects, results of operations, financial condition

and liquidity.

The U.S. government can also prevent or restrict

us from doing business in foreign countries.

These

restrictions and those of foreign governments

have in the past limited our ability to

operate in, or gain access

to, opportunities in various countries.

Actions by host governments, such as the expropriation

of our oil assets

by the Venezuelan government, have affected operations significantly in the past and may continue to

do so in

the future.

Changes in domestic and international policies

and regulations may affect our ability to collect

payments such as those pertaining to the settlement

with PDVSA or the ICSID Award against the Government

of Venezuela; or to obtain or maintain permits, including those necessary for drilling and development

of wells

in various locations.

Similarly, the declaration of a “climate emergency” could result in actions to limit

exports of our products and other restrictions.

Local political and economic factors in international

markets could have a material adverse effect on us.

Approximately 48 percent of our hydrocarbon

production was derived from production outside

the U.S. in

2020, and 42 percent of our proved reserves, as

of December 31, 2020, were located outside

the U.S.

We are

subject to risks associated with operations in international

markets, including changes in foreign governmental

policies relating to crude oil, natural gas, bitumen,

NGLs or LNG pricing and taxation, other

political,

economic or diplomatic developments (including

the macro effects of international trade policies and

disputes), potentially disruptive geopolitical

conditions,

and international monetary and currency rate

fluctuations.

In addition, some countries where we operate

lack a fully independent judiciary system.

This,

coupled with changes in foreign law or policy, results in a lack of legal certainty

that exposes our operations to

increased risks, including increased difficulty in enforcing

our agreements in those jurisdictions and increased

risks of adverse actions by local government authorities,

such as expropriations.

Risks Related to Our Acquisition of Concho

Combining our business with Concho’s may be more difficult, costly or time-consuming

than expected and

we may fail to realize the anticipated benefits

of the Merger, which may adversely affect our business results

and negatively affect the value of our common stock.

Our acquisition of Concho (the Merger)

involved

the combination of two companies which, until

the

completion of the Merger,

operated

as independent public companies.

The success of the Merger will depend

on, among other things, the ability of our

two companies to combine our businesses in

a manner that adds

value to shareholders.

However, there can be no assurances that our respective businesses

can be integrated

successfully, and we will be required to devote significant management attention

and resources to the

integration process.

We must achieve the anticipated improvement in free cash flow generation and returns

and achieve the planned cost savings without adversely

affecting current revenues or compromising the

disciplined investment philosophy to maximize value

for shareholders.

There are a large number of processes, policies, procedures,

operations and technologies and systems that must

be integrated, and although we expect that the

elimination of duplicative costs, strategic

benefits, and

additional income, as well as the realization

of other efficiencies related to the integration of the business,

may

offset incremental transaction and Merger-related costs over time, we may

encounter difficulties in the

integration and any net benefit may not be achieved

in the near term or at all.

It is possible that the integration

process could take longer than originally anticipated

and could result in the loss of key employees;

the loss of

commercial and vendor partners;

the disruption of our ongoing businesses;

inconsistencies in standards,

controls, procedures and policies;

unexpected integration issues;

and higher than expected integration costs.

An inability to realize the full extent of the anticipated

benefits of the Merger and the other transactions

contemplated by the Merger Agreement, as well as any delays

encountered in the integration process, could

have an adverse effect upon the revenues, level of expenses

and operating results of ConocoPhillips, which

may adversely affect the value of our common stock.

The market value of our common stock could

decline if large amounts of our common

stock are sold now

that the Concho acquisition has been consummated.

We issued shares of ConocoPhillips common stock to former Concho stockholders.

Former Concho

stockholders may decide not to hold the shares

of ConocoPhillips common stock that they received

in the

Merger, and ConocoPhillips stockholders may decide to reduce their investment

in ConocoPhillips as a result

of the changes to ConocoPhillips’ investment

profile as a result of the Merger.

Other Concho stockholders,

such as funds with limitations on their permitted

holdings of stock in individual issuers, may

be required to sell

the shares of ConocoPhillips common stock that

they received in the Merger.

Such sales of ConocoPhillips

common stock could have the effect of depressing the

market price for ConocoPhillips common stock.

Other Risk Factors Facing our Business or

Operations

We may need additional capital in the future, and it may not be available on acceptable

terms or at all.

We have historically relied primarily upon cash generated by our operations to fund

our operations and

strategy; however, we have also relied from time to time on access to

the debt and equity capital markets for

funding.

There can be no assurance that additional debt

or equity financing will be available in the future

on

acceptable terms, or at all.

In addition, although we anticipate we

will be able to repay our existing

indebtedness when it matures or in accordance

with our stated plans, there can be no assurance

we will be able

to do so.

Our ability to obtain additional financing or refinance

our existing indebtedness when it matures

or in

accordance with our plans, will be subject

to a number of factors, including market conditions,

our operating

performance, investor sentiment and our ability

to incur additional debt in compliance with agreements

governing our then-outstanding debt.

If we are unable to generate sufficient funds from

operations or raise

additional capital for any reason, our business could

be adversely affected.

In addition, we are regularly evaluated by the major

rating agencies based on a number of factors,

including

our financial strength and conditions affecting the oil

and gas industry generally.

We and other industry

companies have had their ratings reduced in the

past due to negative commodity price outlooks.

Any

downgrade in our credit rating or announcement

that our credit rating is under review for possible

downgrade

could increase the cost associated with any additional

indebtedness we incur.

Our business may be adversely affected by deterioration

in the credit quality of, or defaults under our

contracts with, third parties with whom we do

business.

The operation of our business requires us to engage

in transactions with numerous counterparties

operating in a

variety of industries, including other companies

operating in the oil and gas industry.

These counterparties

may default on their obligations to us as a result

of operational failures or a lack of liquidity, or for other

reasons, including bankruptcy.

Market speculation about the credit quality

of these counterparties, or their

ability to continue performing on their existing obligations,

may also exacerbate any operational difficulties

or

liquidity issues they are experiencing, particularly

as it relates to other companies in the oil and gas industry

as

a result of the volatility in commodity prices.

Any default by any of our counterparties may

result in our

inability to perform our obligations under agreements

we have made with third parties or may otherwise

adversely affect our business or results of operations.

In addition, our rights against any of our counterparties

as a result of a default may not be adequate to

compensate us for the resulting harm caused

or may not be

enforceable at all in some circumstances.

We may also be forced to incur additional costs as we attempt to

enforce any rights we have against a defaulting

counterparty, which could further adversely impact our results

of operations.

In particular, in August 2018, we entered into a settlement

agreement with Petróleos de Venezuela, S.A.

(PDVSA) providing for the payment of approximately

$2 billion over a five-year period in connection

with an

arbitration award issued by the International

Chamber of Commerce (ICC) Tribunal in favor of ConocoPhillips

on a contractual dispute arising from Venezuela’s expropriation of our interests in the Petrozuata and Hamaca

heavy oil ventures and other pre-expropriation

fiscal measures.

We have collected approximately $0.8 billion

of the $2.0 billion settlement to date and PDVSA

has defaulted on its remaining payment obligations

under

this agreement.

We are therefore incurring additional costs as we seek to recover any unpaid amounts

under

the agreement.

Additionally, in March 2019, an ICSID arbitration tribunal issued an award

unanimously

ordering the government of Venezuela to pay ConocoPhillips approximately $8.7 billion in compensation

for

the government’s unlawful expropriation of the company’s investments in Venezuela in 2007.

ConocoPhillips

has filed requests for recognition of the award in several

jurisdictions.

On August 29, 2019, the ICSID tribunal

issued a decision rectifying the award and reducing

it by approximately $227 million.

The award now stands

at $8.5 billion plus interest.

The government of Venezuela is seeking annulment of the award before another

panel at ICSID and annulment proceedings

are underway.

No amounts have been collected as a result of this

award yet.

Our ability to declare and pay dividends and repurchase

shares is subject to certain considerations.

Dividends are authorized and determined by

our Board of Directors in its sole discretion

and depend upon a

number of factors, including:

●

Cash available for distribution;

●

Our results of operations and anticipated future

results of operations;

●

Our financial condition, especially in relation

to the anticipated future capital needs of our

properties;

●

The level of distributions paid by comparable companies;

●

Our operating expenses; and

●

Other factors our Board of Directors deems

relevant.

We expect to continue to pay quarterly dividends to our stockholders; however, our Board of Directors may

reduce our dividend or cease declaring dividends

at any time, including if it determines that

our net cash

provided by operating activities,

after deducting capital expenditures and investments,

are not sufficient to pay

our desired levels of dividends to our stockholders

or to pay dividends to our stockholders at all.

Additionally, as of December 31, 2020,

$14.5 billion of repurchase authority remained

of the $25 billion share

repurchase program our Board of Directors had

authorized.

Our share repurchase program does not

obligate us

to acquire a specific number of shares during any

period, and our decision to commence, discontinue

or resume

repurchases in any period will depend on the same

factors that our Board of Directors

may consider when

declaring dividends, among others.

In the past we have suspended our share repurchase

program in response

to market downturns, and we may do so again

in the future.

Any downward revision in the amount of dividends

we pay to stockholders or the number of shares

we

purchase under our share repurchase program could

have an adverse effect on the market price of our common

stock.

There are substantial risks with any acquisitions

or divestitures we may choose to undertake.

We regularly review our portfolio and pursue growth through acquisitions

and seek to divest non-core assets or

businesses.

We may not be able to complete these transactions on favorable terms, on

a timely basis, or at all.

Even if we do complete such

transactions, our cash flow from operations may be

adversely impacted or

otherwise the transactions

may not result in the benefits anticipated

due to various risks, including, but not

limited to (i) the failure of the acquired assets or

businesses to meet or exceed expected returns,

including risk

of impairment; (ii) difficulties in integrating the operations,

technologies, products and personnel of the

acquired assets or businesses; (iii) the inability

to dispose of non-core assets and businesses on satisfactory

terms and conditions; and (iv) the discovery of

unknown and unforeseen liabilities or

other issues related to

any acquisition for which contractual protections

are inadequate or we lack insurance or indemnities,

including

environmental liabilities, or with regard to divested

assets or businesses, claims by purchasers

to whom we

have provided contractual indemnification.

Our technologies, systems and networks may be subject

to cyber attacks.

Our business, like others within the oil and gas

industry, has become increasingly dependent on digital

technologies, some of which are managed by third-party

service providers on whom we rely to

help us collect,

host or process information.

Among other activities, we rely on digital technology

to estimate oil and gas

reserves, process and record financial and operating

data, analyze seismic and drilling information

and

communicate with employees and third-parties.

As a result, we face various cyber security

threats such as

attempts to gain unauthorized access to, or control

of, sensitive information about our operations

and our

employees, attempts to render our data or systems

(or those of third-parties with whom we do

business)

corrupted or unusable, threats to the security

of our facilities and infrastructure as well as

those of third-parties

with whom we do business and attempted cyber

terrorism.

In addition, computers control oil and gas production,

processing equipment and distribution

systems globally

and are necessary to deliver our production to market.

A disruption, failure, or a cyber breach of these

operating systems, or of the networks and infrastructure

on which they rely, many of which are not owned or

operated by us, could damage critical production,

distribution or storage assets, delay or prevent delivery

to

markets or make it difficult or impossible to accurately

account for production and settle transactions.

Although we have experienced occasional breaches

of our cyber security, none of these breaches have had a

material effect on our business, operations or reputation.

As cyber attacks continue to evolve, we must

continually expend additional resources to continue

to modify or enhance our protective measures

or to

investigate and remediate any vulnerabilities

detected.

Our implementation of various procedures

and controls

to monitor and mitigate security threats

and to increase security for our information, facilities

and

infrastructure may result in increased costs.

Despite our ongoing investments in security

resources, talent and

business practices, we are unable to assure that

any security measures will be effective.

If our systems and infrastructure were to be breached,

damaged or disrupted, we could be subject to serious

negative consequences, including disruption of

our operations, damage to our reputation,

a loss of counterparty

trust, reimbursement or other costs, increased compliance

costs, significant litigation exposure and legal

liability or regulatory fines, penalties or intervention.

Any of these could materially and adversely affect our

business, results of operations or financial condition.

Although we have business continuity plans in

place, our

operations may be adversely affected by significant and

widespread disruption to our systems and

infrastructure that support our business.

While we continue to evolve and modify our

business continuity

plans, there can be no assurance that they will

be effective in avoiding disruption and business impacts.

Further, our insurance may not be adequate to compensate us

for all resulting losses, and the cost to obtain

adequate coverage may increase for us in the future.