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Exclusive: ConocoPhillips puts Canadian natgas assets on the block - sources
February 16, 2017 / 4:11 PM / 10 months ago

Exclusive: ConocoPhillips puts Canadian natgas assets on the block - sources

TORONTO/CALGARY (Reuters) - ConocoPhillips (COP.N) has decided to sell several of its Canadian conventional natural gas assets in a deal that could fetch as much as $2 billion as the biggest U.S. independent oil producer pulls back further from Canada, people familiar with the matter told Reuters.

Conocophillips CEO Ryan Lance speaks during an interview with Maria Bartiromo, for her Fox Business Network show "Opening Bell with Maria Bartiromo" in New York April 8, 2015. REUTERS/Brendan McDermid

The company expects the sale to bring down its debt load and rebalance its portfolio, the people said, declining to be identified as the process is confidential.

Several investment banks have made pitches to ConocoPhillips in recent weeks and the Houston-based company is close to hiring a financial adviser to run a formal sale process, the people said.

The company is looking to identify properties, then bundle and sell them as packages, the people said.

When contacted by Reuters, ConocoPhillips spokesman Rob Evans pointed to an announcement last November that said the company could sell up to $8 billion in natural gas assets.

Evans said that disposition program “largely focused on non-strategic North American gas assets, including select assets in Canada.”

The Houston-based company is expected to sell some of its Western Canadian assets, which include Deep Basin, running from northwestern Alberta to northeastern British Columbia; Clearwater and Kaybob-Edson in west-central Alberta; and Plains, which straddles parts of British Columbia, Alberta and Saskatchewan.

ConocoPhillips does not plan to offload its oil sands properties and assets it owns in the Montney region, the people said. Most of the rest of its Canadian assets could soon be on the block, they added.

Major Canadian energy companies such as Canadian Natural Resources Ltd (CNQ.TO) could be interested in the assets that will be up for sale, the sources said. Canadian Natural has shown increasing interest in natural gas properties and is one of the country’s biggest natural gas producers.

Canadian Natural did not immediately offer a comment when reached by Reuters.

About two years ago, ConocoPhillips sold certain oil and gas assets in Western Canada, some of which were picked up by Canadian Natural.

Since the oil price began correcting nearly three years ago, energy companies have been under pressure to streamline their operations and strengthen their balance sheets.

Reporting by John Tilak and Nia Williams; Editing by Denny Thomas and Alan Crosby

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