ConocoPhillips, Houston, (NYSE: COP) plans to improve its financial position and strengthen its balance sheet through the sale of some $10 billion of assets during the next two years.

The dispositions will occur across the company’s E&P and refining and marketing portfolio with proceeds used for debt reduction, accelerating the company’s return to its stated target debt-to-capital ratio of 20% to 25%.

Says Jim Mulva, ConocoPhillips chairman and chief executive, “These actions are consistent with our objectives of creating shareholder value and improving financial flexibility while pursuing our long-term strategic initiatives. This plan capitalizes on our large resource base and our strong portfolio of projects, while providing flexibility for potential changes in business conditions. We will replace reserves and grow production from a reduced, but more strategic, asset base.”

Capex in 2010 is expected to be approximately $11 billion, down from $12.5 billion in 2009. At this level of funding, ConocoPhillips will support E&P and reserve replacement while preserving its project portfolio for future development. The company intends to achieve its objective of replacing reserves through organic growth. Upstream production growth will occur from a reduced base, as a result of the asset rationalizations.

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