ConocoPhillips Sells Interest in Joint Venture to Lukoil
ConocoPhillips sold its indirect 30% interest in a Russian joint venture to co-owner Lukoil Holdings, part of the exploration and production company's effort to boost returns by divesting itself of billions of dollars in assets.
Financial terms weren't disclosed, but ConocoPhillips anticipates an after-tax gain of roughly $400 million from the sale of its stake in NaryanMarNefteGaz.
Speaking at the North America Prospect Expo in Houston Wednesday, Matt Fox, Conoco's executive vice president for exploration and production, said the company is winnowing its asset base to just those that will allow it to increase production and margins.
"If we have assets that can't contribute to that, they're gone," Mr. Fox said. "We're being pretty ruthless in the way we're trying to build the portfolio we want to get."
He said the company expects to sell $8 billion to $10 billion worth of assets in the next year or so. The sales are part of a three-year repositioning process aimed at making the company more attractive to investors. In total, that plan includes the sale of $15 billion to $20 billion in assets, large-scale share buybacks and the spinoff of its refining arm earlier this year.
Mr. Fox said the company is focused on growing organically and not through acquisitions.
"For the most part, that part of our growth cycle is behind us," he said.
The company last month reported that its second-quarter earnings fell 33% during its first reporting period as a stand-alone producer of oil and gas, beating Wall Street forecasts even as low oil prices cut into on-target production results.
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