) plans to withdraw its operations from twin exploration blocks -
123 and 129 - in Peru's Maranon Basin. The company is set to give
the next exploration period for the blocks a miss.
CONOCOPHILLIPS (COP): Free Stock Analysis
TALISMAN ENERGY (TLM): Free Stock Analysis
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The two large-scale blocks are located in the Tigre district,
Loreto Region and span across 1.9 million net acres. The Maranon
Basin holds two conservation areas - the Pucacuro National Reserve
and the Alto Nanay-Pintuyacu-Chambira Regional Conservation Area -
which were both developed after the licenses were awarded in 2006.
ConocoPhillips will transfer its 45% stake to junior partner Gran
Tierra Energy in a no financial deal. Gran Tierra Energy bought 20%
stake in the blocks two years ago. ConocoPhillips' operatorship of
the blocks will also be transferred, subject to government
approvals. ConocoPhillips will work with Perupetro - the Peruvian
petroleum licensing agency, and Gran Tierra SRL to aid a competent
The decision taken by the company regarding the two blocks forms a
part of ConocoPhillips' broader strategic effort to realign their
investments as well as asset portfolio after separating its
downstream and refining business. The decision was very tough on
the part of the company's management, as they had developed a close
relation with the communities in the area. Multiple rounds of
seismic acquisition have already been performed at the blocks.
ConocoPhillips' ongoing three-year repositioning program aims at
improving its balance sheet through asset sales of around $15
billion to $20 billion. It also comprises large-scale share
buybacks and the spin off of its refining arm earlier this year.
ConocoPhillips announcement of stalling its operations in Peru
Talisman Energy Inc.
) news of pulling out of the same blocks and two others in a move
to exit Peru altogether. However, Talisman maintained that its
decision was not supported by environmental and community concerns.
ConocoPhillips has a Zacks #3 Rank, which is equivalent to a Hold
rating for a period of one to three months. Longer term, we
maintain our Underperform recommendation.