Conoco Targets U.S., Canada in Asset Sales
(Dow Jones), Apr. 26, 2010
ConocoPhillips's banking advisers on Monday revealed details of the assets the oil giant is selling in the U.S. and Canada as part of its $10 billion sale program to shore up its finances.
The Houston-based company is divesting properties in the Permian Basin in New Mexico and Texas, the Wind River Basin in Wyoming, the panhandles of Texas and Oklahoma, and Western Canada, according to Web site of Scotia Waterous, the oil and gas merger and acquisitions division of Scotia Capital, which is advising ConocoPhillips in its asset sale.
The Canadian properties, which according to the bank's Web site produce 10,000 barrel-of-oil equivalent per day, could fetch as much as $750 million, or $75,000 per flowing barrel, said Jim Byrne, an analyst with BMO Capital Markets.
There is not yet a firm estimate for the U.S. assets as Conoco hasn't finalized the selection of the properties, but the value of those assets would be significantly larger than the Canadian sale, said Adrian Goodisman, managing director of Scotia Waterous.
ConocoPhillips would be also selling assets in South Louisiana, the Barnett Shale and in the Gulf of Mexico, according to Goodisman, who said the sale of those assets were being managed by other advisory firms.
The third-largest U.S. oil company by market value after Exxon Mobil Corp. and Chevron Corp. said in October that it is planning to sell 10% of its assets in Canada and the lower 48 states as part of its restructuring plan to improve its finances. The list posted on Scotia Waterous' Web Site represents the first details on assets to be sold. According to the bank, the data rooms for the sale are anticipated to open during the summer while the transactions are expected to close before the end of the third-quarter. Data rooms are information provided by companies to prospective buyers.
Conoco's sale program started by beating analysts expectations when the company announced this month it agreed to sell its stake in Syncrude oil-sands project in Canada to China Petroleum & Chemical Corp., or Sinopec, for $4.65 billion, almost double what analysts expected.
As part of the program, Conoco has also said it plans to sell some of its North Sea natural-gas properties, and some pipelines and terminals in the U.S.
The assets listed by Scotia Waterous are just part what ConocoPhillips plans to sell over the next two years to improve its financial position and strengthen its balance sheet, said ConocoPhillips spokesman Charlie Rowton in an email. "The dispositions will occur across the company's exploration and production and refining and marketing portfolios."
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