ConocoPhillips Selling Northern Australia Assets for $1.39 Billion -- Update
14 Ottobre 2019 - 12:49AM
Dow Jones News
By Robb M. Stewart
MELBOURNE, Australia--ConocoPhillips (COP) has struck a deal to
sell its operations in northern Australia for at least US$1.39
billion as the oil giant seeks to shift capital to other projects
it believes will generate the highest longer-term value.
The assets being sold to Australia's Santos Ltd. (STO.AU)
include ConocoPhillips's controlling stake in the Darwin LNG
gas-export project and cover production of about 50,000 barrels of
oil equivalent a day and proved reserves of about 39 million
barrels as of the end of 2018.
The deal adds to other asset-exits agreed by ConocoPhillips in
recent months, including an agreement in April to sell two
subsidiaries focused on production in the U.K.'s North Sea for
about US$2.68 billion in cash. Also in April, the company closed
the sale of its 30% interest in the Greater Sunrise gas-fields to
the government of East Timor for US$350 million.
ConocoPhillips has been divesting some of resources and focusing
in part on projects in Alaska and Louisiana, as well as in Canada
and Asia. Asia Pacific and the Middle East together are the
second-largest segment in ConocoPhillips portfolio by production,
and include the assets in Australia as well as producing fields in
China, Indonesia, Malaysia and Qatar.
The deal with Santos covers the company's 56.9% interest in the
Darwin liquefied natural gas facility and the Bayu-Undan field that
feeds it, a 37.5% stake in the Barossa gas project, its 40% in the
Poseidon field and 50% in the Athena field.
ConocoPhillips said it will hold on to its 37.5% stake in the
Australia Pacific LNG project on Australia's east coast, and will
remain the operator of the project's LNG facility.
Proceeds from the sale to Santos, which may include an
additional US$75 million contingent on a final investment decision
being taken on the Barossa project, will be used for general
corporate purposes, it said.
For Santos, one of Australia's largest independent oil and gas
producers, the assets it is picking up will lift its earnings per
share by about 16% in 2020 and increase pro-forma production by
about 25%, it said. Santos already is a partner of ConocoPhillips
in the north, and has an 11.5% stake in the Darwin LNG project's
infrastructure and a 25% interest in the Barossa development that
is set to supply the LNG operation in the future.
Santos said it expects a final investment decision on the
roughly US$4.7 billion Barossa project early next year, with first
LNG anticipated in 2024. The gas from the Barossa field is expected
to extend the life of the Darwin LNG operation by more than 20
years.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
October 13, 2019 18:34 ET (22:34 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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