ExxonMobil buys stake in Canadian oil sands(Read article summary)
ExxonMobil Canada and Imperial Oil will pay $720 million for 226,000 acres of ConocoPhillips' oil sands property in Canada. The property exists nearly 100 miles to the south of Fort McMurray in Alberta, and entails of ConocoPhillips entire stake in the Clyden oil sands in the Athabasca Region.
On ThursdayÂ ConocoPhillips announced another deal as part of itsÂ 2012-2013 asset disposition program, with the sale of 226,000 acres of its Canadian oil sands property to Exxon Mobil Corp. and Imperial Oil for$720 million.
The property exists nearly 100 miles to the south of Fort McMurray in Alberta, and entails of ConocoPhillips entire stake in the Clyden oil sands in the Athabasca Region. ConocoPhillips lays claim to the largest oil sands position in the area, withÂ 1.1 million acres, and an estimated potential of 16 billion barrels.
In total ConocoPhillips hopes that it will raise around $13.8 billion from the program of selling non-core assets, which it then intends to return to shareholders in the form of dividends and stock buybacks. (Related article:Â Back to the Oil Basics in Pennsylvania)Â
After announcing the deal, Don Wallette, the executive vice president for commercial, business development and corporate planning at ConocoPhillips,Â said thatÂ â€śthis transaction is a significant step toward rebalancing our world-class oil sands portfolio. We are pleased Imperial Oil and ExxonMobil Canada recognize the value of the Clyden asset.â€ť
Fadel Gheit, a senior oil and gas analyst at Oppenheimer & Co.,Â explained to FuelfixÂ that both companies have left the deal happy with their part. ConnocoPhillips raised the cash that it was after, and Exxon Mobil has managed to add to its list of assets, which it is trying to grow in order to secure steady long-term earnings.
â€śConocoPhillips booked a profit, so they are happy and Exxon Mobil usually doesnâ€™t overpay, so they are happy.â€ť
ConocoPhillips believes that the deal will be fully closed, barring any regulatory intervention, by the end of September.