Conoco Divests Clyden Oil Sands - Analyst Blog


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Texas-based ConocoPhillips ( COP ) has inked an agreement to farm out 100% of its interest in the Clyden oil sands leasehold to Imperial Oil Ltd ( IMO ) and ExxonMobil Canada, a unit of ExxonMobil Corp. ( XOM ).

The transaction is valued at about $720 million (C$751 million), prior to customary adjustments. Upon closure of the transaction - scheduled for late third quarter 2013 - ConocoPhillips will likely record an after-tax gain of about $450 million. The closure is, however, subject to the consent of Canada's Competition Bureau.

Clyden is located near the southern edge of the Athabasca oil sands and south of Fort McMurray, Alberta. The leasehold comprises 226,000 net acres of undeveloped land. Currently, ConocoPhillips holds about 1.1 million net acres of land in the Athabasca Region of northeastern Alberta.

The large bitumen deposits on these lands are projected to contain about 16 billion net barrels of resources, making ConocoPhillips the holder of one of the largest land and resource positions in the region.

With such a massive holding, ConocoPhillips is considered a holder of one of the largest land and resource positions in the region. The large deposits of bitumen on these areas are projected to hold about 16 billion net barrels of resources.

According to a press release, Imperial Oil will acquire a 27.5% stake, while ExxonMobil will purchase the remaining 72.5%. ExxonMobil's unit will decrease its stake to become an equal partner with Imperial Oil after ExxonMobil gets a third partner.

This transaction forms part of its 2012-13 asset disposition program and is an effort by ConocoPhillips to rebalance its oil sands portfolio. The company has so far raised proceeds of about $13.5 billion from the sale of nonstrategic assets, inclusive of this latest sale deal.

ConocoPhillips carries a Zacks Rank #3 (Hold). However, Zacks Ranked #1 (Strong Buy) Cabot Oil & Gas Corp. ( COG ) is expected to perform better.

CABOT OIL & GAS (COG): Free Stock Analysis Report

CONOCOPHILLIPS (COP): Free Stock Analysis Report

IMPERIAL OIL LT (IMO): Free Stock Analysis Report

EXXON MOBIL CRP (XOM): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: COG , COP , IMO , XOM

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