) has inked an agreement to farm out 100% of its interest in the
Clyden oil sands leasehold to
Imperial Oil Ltd
) and ExxonMobil Canada, a unit of
CABOT OIL & GAS (COG): Free Stock Analysis
CONOCOPHILLIPS (COP): Free Stock Analysis
IMPERIAL OIL LT (IMO): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
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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
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.
) is expected to perform better.