ConocoPhillips provided several updates on disposition activity and early life-cycle acreage acquisition activities.
In the first quarter of 2018, the company closed or entered definitive agreements for approximately $250 million of proceeds from the sale of non-core assets. Several small packages in the Permian Basin closed during the quarter. A package of largely undeveloped acreage in South Texas is expected to close in the second quarter. Production impacts to the company from these transactions are minimal. The company expects to complete its previously announced disposition program in the second quarter.
The company also announced that it has established or expanded positions in two early life-cycle, liquids-rich unconventional plays in North America. In February, the company announced that it had acquired approximately 245 thousand net acres of early life-cycle unconventional acreage in the Lower 48 for very low entry cost. The company today identified that most of the acreage is in the Austin Chalk play in central Louisiana. The company expects to drill several exploration wells in the new position starting in 2018, which will be funded from within the company’s announced exploration budget.
The company also announced it recently acquired about 35 thousand net acres in the Montney play in Canada for approximately $120 million. This additional acreage is adjacent to the company’s existing position in the liquids-rich portion of the Montney. The company now holds approximately 140 thousand net acres in the liquids-rich Montney play, with appraisal underway. Exploration and appraisal activity in the Montney will also be funded within the existing exploration budget.
“We have been laser focused on strengthening our portfolio by divesting non-core properties, while adding high-value resource opportunities for future investment,” said Matt Fox, executive vice president, Strategy, Exploration and Technology. “The acreage we’ve acquired in Louisiana and the Montney has the potential to add to our low cost of supply resource base without requiring significant near-term capital commitments. We have been able to fund these acquisitions with proceeds from asset dispositions, while reducing debt, accelerating share repurchases, maintaining capital discipline and retaining cash on the balance sheet. These actions are consistent with our clear strategic priorities, which are designed to create value for our shareholders through cycles.”
