Conoco Algerian Arm to Raise $1.75B - Analyst Blog
19 Dicembre 2012 - 5:00PM
Zacks
U.S. energy giant
ConocoPhillips (COP) has agreed to divest its
Algerian business unit for about $1.75 billion to Indonesia’s state
owned oil company – PT Pertamina. The intended sale forms part of
ConocoPhillips’ 2012-2013 asset distribution program.
ConocoPhillips’ wholly owned subsidiary – ConocoPhillips Algeria
Ltd. – has stakes in the Berkhine basin trio – Menzel Lejmat North
(65% operatorship stake), Ourhoud (3.7%) and EMK (16.9%), which lie
either fully or partially in Block 405a.
Other partners of ConocoPhillips in the fields comprise
Talisman Energy Inc. (TLM), Anadarko
Petroleum Corp. (APC), Eni SpA (E) and
Sonatrach Petroleum Corp., Algeria’s state-owned oil company.
The average yield from the fields for the year through October was
11,000 barrels of oil equivalent per day. Prior to the proposed
sale, ConocoPhillips had placed a book value of about $850 million
on its Algerian assets. The company anticipates the transaction to
close by mid-2013.
The Houston-based explorer is shedding those assets it considers as
least productive and has raised over $2 billion through the sale of
refineries, pipelines and other assets since 2010. ConocoPhillips
has announced further asset sales, together with the latest
transaction, which are expected to raise funds of about $7 billion
upon completion. These funds are expected to be used for general
corporate purposes.
ConocoPhillips’ divestment of its Algerian unit will be value
accretive for its shareholders as well as raise funds for
concentrating on higher return assets. It will facilitate the
company to focus on capital investments that will benefit
production and cash margins and enhance returns on capital.
The proposed sale is subject to co-venturer pre-emption rights and
Algerian government approval, over and above the customary
adjustments and closing conditions.
ConocoPhillips holds a Zacks #3 Rank that is equivalent to a Hold
rating for a period of one to three months. Longer term, we
maintain our Neutral recommendation.
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