The company’s recent Marathon Oil acquisition has increased production and synergies beyond initial forecasts.
The leaders of ConocoPhillips, Houston, have agreed to sell the company’s assets in the Anadarko basin to investment firm Stone Ridge Energy for $1.3 billion.
The planned divestiture — which comprises operations that produce roughly 40,000 boe/d — grows to nearly $2.6 billion the value of assets ConocoPhillips is divesting as chairman and chief executive officer Ryan Lance and his team look to capitalize on the acquisition of Marathon Oil Corp. (OGJ Online, May 29, 2024) they completed last November.
When they announced that deal, the executives said they intended to sell $2 billion of assets. With that target now comfortably surpassed, they have added another roughly $2.5 billion to the disposition target and Lance thinks his team will face “a reasonable market to be selling into.”
“We were pleasantly surprised with the Anadarko basin,” Lance told analysts and investors on an. Aug 7 conference call. “We’re getting plenty of North American natural gas production from our assets in North America and it just wasn’t going to compete for capital as we integrated that asset into the company. We were pretty pleased with the price that we got.”
New York-based Stone Ridge Energy was launched in 2021 under the umbrella of Stone Ridge Holdings Group. The parent firm also is investing in several other strategies, including in Bitcoin-focused NYDIG, which executives say has “pioneered technology to facilitate profitable consumption of otherwise stranded energy throughout the life cycle of a natural gas well.”
ConocoPhillips’ deal for the Anadarko operations comes after a second quarter in which the company averaged total production of 2,391,000 boe/d, which was above leaders’ forecasted range and an increase of 23% from the same period of 2024. The company’s assets in the Lower 48 produced 761,000 b/d of oil (and 1,508,000 boe/d total) during the quarter, up from 575,000 b/d in 2024’s Q2 thanks in part to the Marathon acquisitions.
Lance and his lieutenants told analysts and investors that ConocoPhillips’ synergies from buying Marathon have more than doubled their initial forecast of $500 million. They noted that, among other things, the company’s teams have been able to grow production even after dropping 10 rigs in recent quarters.
Looking ahead to the third quarter, executives expect ConocoPhillips’ total production to be around 2,350,000 boe/d and full-year output to be a tick higher than that.
Shares of ConocoPhillips (Ticker: COP) were changing hands around $93.50 on the afternoon of Aug. 8 and were on pace to be up slightly for the week. Over the past 6 months, they are down slightly, leaving the company’s market capitalization at about $117 billion.
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