Conoco Sheds Some Oil Sands Leases

Drilling rig
Drilling rig

ConocoPhillips (NYSE: COP) plans to shed about $13.5 billion in what the company calls non-strategic assets during 2013. It got $750 million closer today.

Conoco has sold all of its lease interests in 226,000 net acres in the oil sands of Alberta to Canadian subsidiaries of Exxon Mobil Corp. (NYSE: XOM). Conoco expects to net $450 million from the sale. In the first half of 2013, the company completed asset sales totalling $3.8 billion, so we should expect some larger deals in the second half of the year.

Conoco holds rights to 1.1 million net acres in the Athabasca region in northeastern Alberta, and the company estimates 16 billion net barrels of resources on its land. It is one of the larger leaseholdings in the oil sands.

As recently as May, Conoco had placed a hold on its plans for the sale of as much as half its oil sands assets, citing lack of interest among potential buyers. The political issues swirling around oil sands development and the Canadian government's new prohibition against selling oil sands projects to state-controlled energy firms have lowered the value of oil sands projects.

Conoco's shares are inactive in premarket trading this morning, having closed at $66.52 last night in a 52-week range of $53.95 to $67.47.

Filed under: Commodities & Metals Tagged: COP, XOM