The U.S. oil major has retained Scotiabank to help sell assets in Western Canada
ConocoPhillips (ticker: COP) hired the Bank of Nova Scotia (Scotiabank) to advise on the sale of about 20% of its production in Western Canada outside of the oil sands, reports BNN. Details on the sale from Houston-based COP will be provided in the second quarter, according to Scotiabank.
The assets being considered for divestment have cumulative production of approximately 35,200 BOEPD, based on Q3’14 production volumes, working interest, before deduction of royalties, reports Houston Business Journal. The assets are:
- Cessford — Mantario: 7,200 BOEPD
- Southern Alberta: 6,700 BOEPD
- East Central Alberta: 6,600 BOEPD
- Ghost Pine: 5,600 BOEPD
- Northeast British Columbia: 5,600 BOEPD
- Narraway: 1,900 BOEPD
- Sturgeon Lake — Mooney: 1,600 BOEPD
ConocoPhillips joins other oil companies looking to divest Canadian assets like EOG Resources (ticker: EOG), who sold $410 million in Manitoba and Alberta last December. The sale was made in two separate transactions to unidentified buyers. EOG announced that in addition to the $410 million in proceeds it garnered from the deal, the sale also released $ 150 million of restricted cash related to future abandonment liabilities on the acreage.
During a company earnings call, Matthew J. Fox, Executive Vice President of Exploration and Production for COP, said the company would be slowing its drilling activity. “In Canada we’re reducing our conventional and unconventional development drilling activity.” Fox went on to say that oilsands and offshore projects would continue ahead.
“Surmont 2 is on track for first steam in mid-2015 and we’ll commence exploration drilling offshore Nova Scotia later this year,” he said. Surmont 2 will have a nameplate capacity of 83 MBOPD. It will join the Surmont 1, which began production in 2007. Surmont Phase 2 is a 50/50 joint venture between ConocoPhillips and Total E&P Canada (ticker: TOT).
Total selling in other parts of the world
While COP works to sell off 20% of its Canadian assets, Total sold its stake in Nigerian Oil Mining Lease (OML) 29 to Aiteo Eastern E&P for $569 million as part of its plan to speed up asset sales, reports Bloomberg.
The sale of OML 29 brings proceeds from Total’s Nigerian divestitures to $1 billion when the profits from the OML 24 and OML 18 stake sales are also considered. Since 2010, Total has divested interests in 11 onshore Nigerian blocks to local companies.
Total said it will curb spending and quicken the pace of asset sales in response to the fall in oil prices. The company hopes to raise $5 billion through disposals this year, and is targeting a total of $10 billion through 2017. Total’s CEO said that the company was using the price slump as an opportunity to cut costs. ”Our anticipation is that the increase of supply will remain above the increase of demand in 2015,” he said. “For me, I see this period as an opportunity to clean up the cost base of our company.”
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