Shares of were trading near record highs when ConocoPhillips (NYSE: COP) started off the new year by announcing that it expected fourth quarter production results to exceed those of the third quarter. But it was good news/bad news for the company this past week.

The good news: The Wall Steet Journal reported that Conoco was now the front-runner to participate in a multiyear, $10 billion project to develop the Shah natural-gas field in Abu Dhabi, beating out such rivals as Occidental Petroleum (NYSE: OXY) and Royal Dutch Shell (NYSE: RDS.A). Abu Dhabi National Oil Co. had been expected to name a partner for the project last year, and oil companies have become frustrated by the delays. Abu Dhabi is trying to meet rising demand for natural gas, which has surged with the building of gas-fired power stations and desalination plants.

The bad news: The company's donation of $5 million to a local cancer center apparently did not impress Alaska state officials sufficiently to allow Conoco to go forward with its nonconforming proposal for a natural gas pipeline project in that state's North Slope. Conoco's proposal had requested that state taxes be fixed on the project for decades, which prompted Governor Sarah Palin to send Conoco a rejection letter. The rejection left TransCanada Corp. (NYSE: TRP) as the sole finalist for the project.

Conoco shares have fallen 5.96% since the beginning of the year, and closed Friday at $83.04.