ConocoPhillips (COP) unveiled Wednesday plans to sell an additional $5
billion to $10 billion in non-core assets over the next two years as the oil
producer and refiner continues efforts to improve its balance sheet.
The move, announced at the company's analyst meeting in
New
York
, had been expected by some analysts. The
Houston-based company said it expects to sell a total of $12 billion to $17
billion in assets from 2010 to 2013, including at least $1 billion in refining
and marketing properties this year.
Conoco said potential new dispositions include a 15% stake in the
Australia-Pacific liquefied natural gas project, a joint venture with Origin
Energy Ltd. (ORG.AU), non-strategic assets in the
North
Sea
and additional mature assets in the
U.S.
and
Canada
.
"We are executing the plan set out last year to improve returns and create
value through disciplined capital spending, non-core asset sales and growing
production per share," said Chief Executive Jim Mulva.
ConocoPhillips said it expects to use proceeds from the asset sales announced
Wednesday to fund a $10 billion share buyback program it had previously
unveiled, and for capital investment. In a slide presentation, the company said
it expects share buybacks to total $11 billion this year and in 2012.
The asset sales mark a shift from Conoco's debt-fueled acquisition spree when
commodity prices were soaring.
ConocoPhillips, the third-largest
U.S.
oil
company by market value after Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX),
said it expects its oil-and-gas production to be between 1.6 million and 1.7
million barrels of oil equivalent in 2013, down from 1.75 million barrels of
oil equivalent produced last year due to the impact of the asset sale program. The
oil giant, however, said it expects output to grow 2% to 3% per year in the
long term, driven mainly by the startup of projects in
Asia
, the
North
Sea
and the
U.S.
The company plans $13.5 billion of capital spending this year, with the vast
majority targeted for exploration and development. It said it plans to invest
$14 billion to $15 billion per year from 2012 to 2015. Conoco plans to invest
50% more this year in projects in
North America
.
The company said it sees oil prices remaining strong in the long term, driven
by increased global demand, but added that natural gas prices in the
U.S.
are
likely to remain depressed due the shale gas production boom.
The company said it plans to invest $1.4 billion in the APLNG project, and that
it will be sanctioned by mid-year and have its first liquid natural gas
delivery in 2015.
Conoco in January reported that its fourth-quarter profit rose 60% on high oil
prices and improved refining margins.
Conoco's
shares were trading at $77.30, up a fraction.