Conoco in $720M Oil Sands Deal With Exxon, Imperial
Aug 8 (Reuters) – ConocoPhillips is selling its stake in a Canadian oil sands project to Exxon Mobil Corp and Imperial Oil Ltd for about $720 million as it focuses on its U.S. shale oil and natural gas operations.
The all-cash deal involves the sale of 226,000 acres of undeveloped land, roughly 93 miles (150 kilometers) south of Fort McMurray, Alberta, to Exxon Mobil's Canadian unit and Imperial, which is 70 percent controlled by Exxon.
After the deal closes, Exxon Canada will own a 72.5 percent interest in the land, known as the Clyden oil sands leasehold, with Imperial controlling the rest.
The deal is a natural fit for Exxon, which has invested $11 billion in its Kearl oil sands project in northwest Alberta, and gives it access to even more oil to boost its global daily production, which has slid in recent quarters.
Calgary-based Imperial already operates four oil sands projects in Canada and said the stake it is buying from Conoco is a "high-quality addition" to its portfolio.
Conoco, which has been trying to sell the Clyden stake for months, expects to record a after-tax gain of about $450 million from the sale.
The deal, worth about $3,186 per acre, is a "fair price" for Conoco, said Simmons & Co analyst Jeff Dietert, considering the Clyden land is largely undeveloped and similar deals since 2005 have sold for an average price of $2,550 per acre,
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Operates 13 Offshore Rigs
- Oil, Gas Leaders Warn Trump He Risks Harming Their Industry (Mar 16)
- Exxon Mobil Partnering With Pakistan for Third LNG Terminal (Mar 16)
- Tillerson Has 180 Million Reasons Not to Return to Oil Industry (Mar 13)
Company: ConocoPhillips more info
Operates 12 Offshore Rigs
- Shale Producers Urge FERC To Deny White Cliffs Oil Pipeline's Fee Request (Feb 23)
- Why Canada Is The Next Frontier For Shale Oil (Jan 29)
- Exxon, BP Targeted in NYC Suit That Relies on 'Nuisance' Theory (Jan 10)
Company: Imperial Oil more info
- Canada's Imperial Oil Misses Profit Estimate As Expenses Weigh (Feb 02)
- Canada's Imperial Oil Posts Unexpected 2Q Loss (Jul 28)
- Imperial Oil Profit Boosted By Asset-Sale Gain (Jan 31)