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ConocoPhillips (NYSE: COP) has successfully completed the sale of its subsidiary, which owns a 54% stake in the Indonesia Corridor Block PSC and a 35% interest in Transasia Pipeline Company, to MedcoEnergi for $1.355 billion. The effective date is January 1, 2021, with estimated net cash from the sale around $0.8 billion. The sold assets produced 51 MBOED in 2021 and had proved reserves of approximately 70 million BOE. This divestment aligns with ConocoPhillips' strategy to focus investments on low-cost production opportunities.
Positive
Generated approximately $0.8 billion in net cash from the sale.
Effective sale date aligns with strategic business planning.
Maintains focus on low-cost supply opportunities.
Negative
None.
HOUSTON--(BUSINESS WIRE)--
ConocoPhillips (NYSE: COP) announced today that it has completed the sale of the subsidiary that indirectly owns its 54% interest in the Indonesia Corridor Block Production Sharing Contract (PSC) and a 35% shareholding interest in the Transasia Pipeline Company to MedcoEnergi for $1.355 billion, with an effective date of Jan. 1, 2021. After customary closing adjustments, net cash from the sale is approximately $0.8 billion, which accounts for $0.1 billion restricted cash transferred to MedcoEnergi at closing.
“We are proud of our half-century history in Indonesia and pleased that MedcoEnergi recognizes the value of this business,” said Ryan Lance, ConocoPhillips chairman and chief executive officer. “This disposition is part of our ongoing effort to focus our investments across low cost of supply opportunities.”
The assets sold produced 51 thousand barrels of oil equivalent per day (MBOED) during 2021 and had year-end 2021 proved reserves of approximately 70 million barrels of oil equivalent.
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About ConocoPhillips
ConocoPhillips is one of the world’s leading exploration and production companies based on both production and reserves, with a globally diversified asset portfolio. Headquartered in Houston, Texas, ConocoPhillips had operations and activities in 14 countries, $91 billion of total assets and approximately 9,900 employees at Dec. 31, 2021. Production including Libya averaged 1,567 MBOED for the 12 months ended Dec. 31, 2021, and proved reserves were 6.1 BBOE as of Dec. 31, 2021. For more information, go to www.conocophillips.com.
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This news release contains forward-looking statements as defined under the federal securities laws. Forward-looking statements relate to future events, plans and anticipated results of operations, business strategies, and other aspects of our operations or operating results. Words and phrases such as “anticipate," “estimate,” “believe,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict," “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and other similar words can be used to identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. Where, in any forward-looking statement, the company expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to be reasonable at the time such forward-looking statement is made. However, these statements are not guarantees of future performance and involve certain risks, uncertainties and other factors beyond our control. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in the forward-looking statements. Factors that could cause actual results or events to differ materially from what is presented include the impact of public health crises, including pandemics (such as COVID-19) and epidemics and any related company or government policies or actions; global and regional changes in the demand, supply, prices, differentials or other market conditions affecting oil and gas, including changes resulting from a public health crisis or from the imposition or lifting of crude oil production quotas or other actions that might be imposed by OPEC and other producing countries and the resulting company or third-party actions in response to such changes; changes in commodity prices, including a prolonged decline in these prices relative to historical or future expected levels; insufficient liquidity or other factors, such as those listed herein, that could impact our ability to repurchase shares and declare and pay dividends such that we suspend our share repurchase program and reduce, suspend, or totally eliminate dividend payments in the future, whether variable or fixed; changes in expected levels of oil and gas reserves or production; potential failures or delays in achieving expected reserve or production levels from existing and future oil and gas developments, including due to operating hazards, drilling risks or unsuccessful exploratory activities; unexpected cost increases or technical difficulties in constructing, maintaining or modifying company facilities; legislative and regulatory initiatives addressing global climate change or other environmental concerns; investment in and development of competing or alternative energy sources; disruptions or interruptions impacting the transportation for our oil and gas production; international monetary conditions and exchange rate fluctuations; changes in international trade relationships, including the imposition of trade restrictions or tariffs on any materials or products (such as aluminum and steel) used in the operation of our business; our ability to collect payments when due under our settlement agreement with PDVSA; our ability to collect payments from the government of Venezuela as ordered by the ICSID; our ability to liquidate the common stock issued to us by Cenovus Energy Inc. at prices we deem acceptable, or at all; our ability to complete any announced or any future dispositions or acquisitions on time, if at all; the possibility that regulatory approvals for any announced or any future dispositions or acquisitions will not be received on a timely basis, if at all, or that such approvals may require modification to the terms of the transactions or our remaining business; business disruptions following the acquisition of assets from Shell (the “Shell Acquisition”) or any other announced or any future dispositions or acquisitions, including the diversion of management time and attention; the ability to deploy net proceeds from our announced or any future dispositions in the manner and timeframe we anticipate, if at all; potential liability for remedial actions under existing or future environmental regulations; potential liability resulting from pending or future litigation, including litigation related directly or indirectly to our transaction with Concho Resources Inc.; the impact of competition and consolidation in the oil and gas industry; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets; general domestic and international economic and political conditions; the ability to successfully integrate the assets from the Shell Acquisition or achieve the anticipated benefits from the transaction; unanticipated difficulties or expenditures relating to the Shell Acquisition; changes in fiscal regime or tax, environmental and other laws applicable to our business; and disruptions resulting from accidents, extraordinary weather events, civil unrest, political events, war, terrorism, cyber attacks or information technology failures, constraints or disruptions; and other economic, business, competitive and/or regulatory factors affecting our business generally as set forth in our filings with the Securities and Exchange Commission. Unless legally required, ConocoPhillips expressly disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
What did ConocoPhillips announce regarding its assets on March 2, 2022?
ConocoPhillips announced the completion of the sale of a subsidiary holding its 54% interest in the Indonesia Corridor Block PSC and a 35% interest in Transasia Pipeline to MedcoEnergi for $1.355 billion.
How much net cash did ConocoPhillips receive from the asset sale?
ConocoPhillips received approximately $0.8 billion in net cash from the sale after customary adjustments.
What were the production rates of the sold assets?
The sold assets produced 51 thousand barrels of oil equivalent per day (MBOED) during 2021.
What is the significance of the asset sale for ConocoPhillips?
The sale reflects ConocoPhillips' strategy to concentrate on low-cost investment opportunities.
What are the proved reserves associated with the sold assets?
The sold assets had approximately 70 million barrels of oil equivalent in proved reserves as of year-end 2021.
