One of the top U.S oil and gas producers, ConocoPhillips, is in an advanced stage of discussions to sell assets in Oklahoma to privately-held Stone Ridge Energy in a deal that could be worth about $1.3 billion, Reuters reports, citing sources with knowledge of the talks.
ConocoPhillips last year acquired Marathon Oil in an all-stock deal with an enterprise value of $22.5 billion, inclusive of $5.4 billion of net debt. The deal expanded ConocoPhillips’ presence in the Permian, Eagle Ford, Anadarko, and Bakken shale basins.
Now the company is reportedly in advanced talks to sell about 300,000 net acres in the Anadarko shale formation to Stone Ridge Energy, the energy-focused arm of U.S. Stone Ridge Asset Management. These assets currently produce some 39,000 barrels of oil equivalent per day (boepd), about half of which is natural gas.
If talks lead to a deal, which is not certain per Reuters’ sources, the assets would be managed by Flywheel Energy, an Oklahoma-based private firm backed by Stone Ridge Energy, according to one of the sources.
Reports of talks for a sale in Oklahoma come as no surprise, as ConocoPhillips was said in April to have hired investment bank Moelis & Co. to manage a potential deal.
This move would be part of ConocoPhillips’ broader strategy to streamline its portfolio after acquiring Marathon Oil and assuming approximately $5.4 billion in debt.
ConocoPhillips is seeking to divest $2 billion worth of non-core assets, with a particular focus on holdings in Oklahoma. The decision to sell these assets may appeal to buyers looking to capitalize on the increasing demand for natural gas, particularly in industries like energy-hungry data centers.
Since acquiring Marathon Oil, ConocoPhillips has already sold over $1 billion in assets, with plans to refocus on core areas, such as the Permian Basin and Bakken.
By Tsvetana Paraskova for Oilprice.com
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