ConocoPhillips Completes Sale of Foster Creek Christina Lake Partnership Interest & Western Canada Deep Basin Gas Assets to C...
May 17 2017 - 4:05PM
Business Wire
ConocoPhillips (NYSE: COP) today completed its previously
announced transaction with Cenovus (TSX: CVE) (NYSE: CVE) to sell
its 50 percent nonoperated interest in the Foster Creek Christina
Lake (FCCL) oil sands partnership, as well as the majority of its
western Canada Deep Basin gas assets. ConocoPhillips Canada retains
its operated 50 percent interest in the Surmont oil sands joint
venture and its operated 100 percent Blueberry-Montney
unconventional acreage position.
“This transaction will make a significant and immediate impact
by accelerating our value proposition,” said Ryan Lance, chairman
and chief executive officer. “We will achieve a step-function
improvement in our balance sheet strength and the pace of our
planned share repurchase program. Our focus on free cash flow
generation and our clear allocation priorities put us in a strong
position to deliver double-digit returns to shareholders through
price cycles.”
The company has revised its second-quarter production guidance
to 1,365 to 1,405 thousand barrels of oil equivalent per day,
reflecting the partial quarter impact of this disposition.
Acquisition of Cenovus Common
Shares
At closing, Cenovus issued 208 million common shares to
ConocoPhillips as partial consideration for the disposition of the
assets and ConocoPhillips now owns approximately 16.9 percent of
the issued and outstanding Cenovus common shares. Prior to the
transaction, neither ConocoPhillips nor its affiliates owned any
Cenovus common shares.
Depending on market conditions and regulatory requirements,
ConocoPhillips may from time to time decrease its beneficial
ownership, or decrease its control or direction over any of
Cenovus’s securities through market transactions, private
agreements or otherwise. ConocoPhillips has filed Form 62-103F1 –
Required Disclosure Under the Early Warning Requirements – as a
result of the acquisition, a copy of which can be obtained on
Cenovus’s SEDAR profile at www.sedar.com or by contacting Angela
Avery at (281) 293-4005.
--- # # # ---
About ConocoPhillips
ConocoPhillips is the world’s largest independent E&P
company based on production and proved reserves. Headquartered in
Houston, Texas, ConocoPhillips had operations and activities in 17
countries, $88 billion of total assets, and approximately 13,100
employees as of March 31, 2017. Production excluding Libya averaged
1,584 MBOED for the three months ended March 31, 2017, and proved
reserves were 6.4 billion BOE as of Dec. 31, 2016. 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.
Forward-looking statements relate to future events and anticipated
results of operations, business strategies, and other aspects of
our operations or operating results. In many cases you can identify
forward-looking statements by terminology such as "anticipate,"
"estimate," "believe," "continue," "could," "intend," "may,"
"plan," "potential," "predict," "should," "will," "expect,"
"objective," "projection," "forecast," "goal," "guidance,"
"outlook," "effort," "target" and other similar words. 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 have a reasonable basis. However, there can be no assurance that
such expectation or belief will result or be achieved. The actual
results of operations can and will be affected by a variety of
risks and other matters including, but not limited to business
disruptions following the sale including the diversion of
management time and attention; our ability to liquidate the Cenovus
common stock received at prices we deem acceptable, or at all; the
ability to deploy the net proceeds from the sale in the manner and
timeframe we currently anticipate, if at all; changes in commodity
prices; changes in expected levels of oil and gas reserves or
production; operating hazards, drilling risks, unsuccessful
exploratory activities; difficulties in developing new products and
manufacturing processes; unexpected cost increases; international
monetary conditions; potential liability for remedial actions under
existing or future environmental regulations; potential liability
resulting from pending or future litigation; 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; and changes in tax, environmental and other
laws applicable to our business. Other factors that could cause
actual results to differ materially from those described in the
forward-looking statements include 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
undertakes no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Use of Non-GAAP Financial Information – To supplement the
presentation of the Company’s financial results prepared in
accordance with U.S. generally accepted accounting principles
(GAAP), this news release contains certain financial measures that
are not prepared in accordance with GAAP, including free cash flow.
Free cash flow is cash from operations in excess of capital
expenditures and investments required to maintain flat production,
working capital changes associated with investing activities, and
dividends paid. The company believes that the non-GAAP measure free
cash flow is useful to investors as it provides a measure to
compare cash from operations after deduction of capital
expenditures and investments, working capital changes associated
with investing activities, and dividends paid across periods on a
consistent basis. The Company’s Board of Directors and management
also use these non-GAAP measures to analyze the Company’s operating
performance across periods when overseeing and managing the
Company’s business.
The non-GAAP measure included in this news release have
limitations as an analytical tool and should not be considered in
isolation or as a substitute for an analysis of the Company’s
results calculated in accordance with GAAP. In addition, because
not all companies use identical calculations, the Company’s
presentation of non-GAAP measures in this news release may not be
comparable to similarly titled measures disclosed by other
companies, including companies in our industry. The Company may
also change the calculation of any of the non-GAAP measures
included in this news release from time to time in light of its
then existing operations to include other adjustments that may
impact its operations.
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version on businesswire.com: http://www.businesswire.com/news/home/20170517006252/en/
ConocoPhillipsDaren Beaudo, 281-293-2073
(media)daren.beaudo@conocophillips.comorAndy O’Brien, 281-293-5000
(investors)andy.m.obrien@conocophillips.com
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