ConocoPhillips Completes Sale of Foster Creek Christina Lake Partnership Interest and Western Canada Deep Basin Gas Assets to Cenovus
ConocoPhillips (NYSE: COP) today completed its previously announced
transaction with Cenovus (TSX: CVE) (NYSE: CVE) to sell its 50 percent
nonoperated interest in the Foster Creek Christina Lake (FCCL) oil sands
partnership, as well as the majority of its western Canada Deep Basin
gas assets. ConocoPhillips Canada retains its operated 50 percent
interest in the Surmont oil sands joint venture and its operated 100
percent Blueberry-Montney unconventional acreage position.
“This transaction will make a significant and immediate impact by
accelerating our value proposition,” said Ryan Lance, chairman and chief
executive officer. “We will achieve a step-function improvement in our
balance sheet strength and the pace of our planned share repurchase
program. Our focus on free cash flow generation and our clear allocation
priorities put us in a strong position to deliver double-digit returns
to shareholders through price cycles.”
The company has revised its second-quarter production guidance to 1,365
to 1,405 thousand barrels of oil equivalent per day, reflecting the
partial quarter impact of this disposition.
Acquisition of Cenovus Common Shares
At closing, Cenovus issued 208 million common shares to ConocoPhillips
as partial consideration for the disposition of the assets and
ConocoPhillips now owns approximately 16.9 percent of the issued and
outstanding Cenovus common shares. Prior to the transaction, neither
ConocoPhillips nor its affiliates owned any Cenovus common shares.
Depending on market conditions and regulatory requirements,
ConocoPhillips may from time to time decrease its beneficial ownership,
or decrease its control or direction over any of Cenovus’s securities
through market transactions, private agreements or otherwise.
ConocoPhillips has filed Form 62-103F1 – Required Disclosure Under the
Early Warning Requirements – as a result of the acquisition, a copy of
which can be obtained on Cenovus’s SEDAR profile at www.sedar.com
or by contacting Angela Avery at (281) 293-4005.
--- # # # ---
About ConocoPhillips
ConocoPhillips is the world’s largest independent E&P company based on
production and proved reserves. Headquartered in Houston, Texas,
ConocoPhillips had operations and activities in 17 countries, $88
billion of total assets, and approximately 13,100 employees as of March
31, 2017. Production excluding Libya averaged 1,584 MBOED for the three
months ended March 31, 2017, and proved reserves were 6.4 billion BOE as
of Dec. 31, 2016. For more information, go to www.conocophillips.com.
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE
"SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995
This news release contains forward-looking statements.
Forward-looking statements relate to future events and anticipated
results of operations, business strategies, and other aspects of our
operations or operating results. In many cases you can identify
forward-looking statements by terminology such as "anticipate,"
"estimate," "believe," "continue," "could," "intend," "may," "plan,"
"potential," "predict," "should," "will," "expect," "objective,"
"projection," "forecast," "goal," "guidance," "outlook," "effort,"
"target" and other similar words. However, the absence of these words
does not mean that the statements are not forward-looking. Where, in any
forward-looking statement, the company expresses an expectation or
belief as to future results, such expectation or belief is expressed in
good faith and believed to have a reasonable basis. However, there can
be no assurance that such expectation or belief will result or be
achieved. The actual results of operations can and will be affected by a
variety of risks and other matters including, but not limited to
business disruptions following the sale including the diversion of
management time and attention; our ability to liquidate the Cenovus
common stock received at prices we deem acceptable, or at all; the
ability to deploy the net proceeds from the sale in the manner and
timeframe we currently anticipate, if at all; changes in commodity
prices; changes in expected levels of oil and gas reserves or
production; operating hazards, drilling risks, unsuccessful exploratory
activities; difficulties in developing new products and manufacturing
processes; unexpected cost increases; international monetary conditions;
potential liability for remedial actions under existing or future
environmental regulations; potential liability resulting from pending or
future litigation; limited access to capital or significantly higher
cost of capital related to illiquidity or uncertainty in the domestic or
international financial markets; general domestic and international
economic and political conditions; and changes in tax, environmental and
other laws applicable to our business. Other factors that could cause
actual results to differ materially from those described in the
forward-looking statements include other economic, business, competitive
and/or regulatory factors affecting our business generally as set forth
in our filings with the Securities and Exchange Commission. Unless
legally required, ConocoPhillips undertakes no obligation to update
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
Use of Non-GAAP Financial Information – To supplement the
presentation of the Company’s financial results prepared in accordance
with U.S. generally accepted accounting principles (GAAP), this news
release contains certain financial measures that are not prepared in
accordance with GAAP, including free cash flow. Free cash flow is cash
from operations in excess of capital expenditures and investments
required to maintain flat production, working capital changes associated
with investing activities, and dividends paid. The company believes that
the non-GAAP measure free cash flow is useful to investors as it
provides a measure to compare cash from operations after deduction of
capital expenditures and investments, working capital changes associated
with investing activities, and dividends paid across periods on a
consistent basis. The Company’s Board of Directors and management also
use these non-GAAP measures to analyze the Company’s operating
performance across periods when overseeing and managing the Company’s
business.
The non-GAAP measure included in this news release have limitations
as an analytical tool and should not be considered in isolation or as a
substitute for an analysis of the Company’s results calculated in
accordance with GAAP. In addition, because not all companies use
identical calculations, the Company’s presentation of non-GAAP measures
in this news release may not be comparable to similarly titled measures
disclosed by other companies, including companies in our industry. The
Company may also change the calculation of any of the non-GAAP measures
included in this news release from time to time in light of its then
existing operations to include other adjustments that may impact its
operations.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170517006252/en/
Copyright Business Wire 2017