ConocoPhillips (COP) is preparing the sale of noncore oil and gas producing acreage in the United States, in the latest sign that oil majors are becoming more accepting of lower oil prices, according to people familiar with the matter.
Continue Reading Below
While the world's oil and gas companies have been looking to buy assets on the cheap since oil prices plummeted, epitomized by Royal Dutch Shell Plc's <RDSa.L> agreement earlier this month to buy BG Group Plc <BG.L> for $70 billion, they have been reluctant to sell assets in case oil prices recover and they can fetch more.
ConocoPhillips has hired Wells Fargo <WFC.N> to sell some of its noncore U.S. assets, the people said on Monday. These assets include oil and gas properties in the Rockies, East Texas, South Texas and Northern Louisiana, according to one of the people.
While the value of the assets up for sale could not be learned, industry sources said they expected ConocoPhillips to sell between $1 billion and $2.5 billion worth of noncore assets in the United States.
The sources asked not to be named because the sale process is confidential. A representative of ConocoPhillips declined to comment on this specific asset sale but said: "It is common in the energy business for companies to review, readjust and optimize their portfolio from time to time." A Wells Fargo representative declined to comment.
ConocoPhillips' asset sale would be the largest U.S. acreage sale by a major U.S. oil and gas company so far this year. It follows a 50 percent drop in the price of oil since last June, which halted dozens of similar asset sales.
Continue Reading Below
This would be the second asset sale by ConocoPhillips launched this year. Earlier, it retained boutique investment bank Scotia Waterous <BNS.TO> for an asset sale in Canada, according to Scotia Waterous' website.
A couple of other big companies have also started to explore a sale. Anadarko Petroleum Corp <APC.N> has put a few hundred million dollars worth of East Texas acreage up for sale with Citigroup Inc <C.N>, according to people familiar with the matter. Anandarko and Citigroup representatives did not respond to requests for comment.
(Reporting by Mike Stone in New York; editing by Matthew Lewis)