By Gerson Freitas Jr/Bloomberg News
HOUSTON
EnergiesNet.com 02 14 2022
ConocoPhillips, one of North America’s largest energy explorers, is considering a sale of operations worth more than $1 billion in the Permian Basin, according to people with knowledge of the matter.
The company is working with an adviser to run an auction process for the assets, said the people, who asked not to be identified because they weren’t authorized to speak publicly. Potential suitors are being invited to the company’s data room to examine information, the people said.
A representative for Houston-based ConocoPhillips declined to comment.
A sale would trim the company’s position in the Delaware region within the larger Permian Basin located in West Texas and New Mexico. It would come on the heels of ConocoPhillips becoming one of the basin’s biggest producers with its $9.5 billion acquisition of Royal Dutch Shell Plc’s Permian operations, which was announced in September.
Encouraged by surging oil prices, the U.S. shale industry is in rebound mode, with analysts expecting record cash flow this year. Oil companies that survived the coronavirus pandemic have reduced debt and reined in production growth in pursuit of a more shareholder-friendly financial model to win back investors after a decade of poor returns.
With crude headed toward $100 a barrel, production growth and capital spending is climbing again, led by the supermajors and private operators. The increase in oil prices and drilling activity are providing an opportunity for companies like ConocoPhillips to offload non-core assets.
bloomberg.com 02 10 2022
