Item 3. Legal Proceedings

Legal Proceedings

We are a defendant

in a number of legal and administrative

proceedings arising in the ordinary course

of business,

including those involving governmental

authorities under federal, state

and local laws regulating the discharge

of

materials into the environment.

While it is not possible to accurately predict

the final outcome of these pending

proceedings, if any one or more of such proceedings

were to be decided adversely to

ConocoPhillips, we expect

there would be no material effect

on our consolidated financial position.

See

Note 11

for a description of such

legal and administrative

proceedings.