Conoco to sell Rocky Mountain assets to Denbury for $1.05 billion
By Thyagaraju Adinarayan
(Reuters) - ConocoPhillips (COP.N: Quote) will sell some of its oilfields in Montana and North Dakota to Denbury Resources Inc (DNR.N: Quote) for $1.05 billion to focus instead on its promising shale oil and gas properties in the same region.
Oil and gas production in the Bakken region, spanning North Dakota, Montana and Canada, is expected to double by 2015 as producers use new technologies to unlock vast supplies in shale formations, a less risky means of producing crude.
Conoco will sell its Cedar Creek Anticline properties, the oldest and largest field in the southwestern Williston Basin, as part of an asset sale program that has helped the Houston-based company raise $12 billion since 2012.
"This is an attractive sales price for a relatively small, non-core producing asset and acreage located outside COP's assets in the Bakken formation," Barclays Capital analyst Paul Cheng wrote in a note.
Conoco expects to record after-tax net earnings benefit of about $120 million in the fourth quarter from the sale.
Top oil producers are focusing on relatively cheap and easy-to-access North American oilfields in regions such as Bakken to boost production in a sector where a vast amount of resources is tightly controlled by countries such as Brazil and Russia.
Conoco said Tuesday's sale did not include any of its assets in the Bakken formation, a region where companies are able to save costs by sinking multiple wells from single spots, a technique known as pad drilling. Continued...