ConocoPhillips intends to divest $5-8 billion in assets primarily relating to North American natural gas as part of its effort to accelerate “the company’s value proposition of a strong balance sheet, growing dividend, and disciplined growth.”
The Houston independent has set its 2017 capital expenditures guidance at $5 billion, down 4% compared with its 2016 guidance of $5.2 billion and less than half of its 2015 capex and investments that totaled $10.1 billion. The firm recently cut its 2016 capex from $5.5 million (OGJ Online, Oct. 27, 2016).
Spending in 2017 will focus primarily on flexible unconventional development programs in the Lower 48, conventional projects in Europe, Asia Pacific and Alaska, and base asset maintenance.
About $600 million is included for exploration, which is primarily focused on unconventionals, appraisal of the Barossa discovery in the Timor Sea, and closeout of deepwater Gulf of Mexico and Nova Scotia drilling obligations.
Full-year 2017 production is expected at 1.54-1.57 million boe/d, which results in 0-2% growth compared with expected full-year 2016 production of 1.54 million boe/d when adjusted for expected dispositions for the year. Growth is expected to come primarily from ramp up at the Australia Pacific LNG (APLNG) project, Surmont 2 in Canada, and Kebabangan in Malaysia, as well as increased activity in Lower 48 unconventionals, partly offset by normal field decline. The company’s production outlook excludes Libya.
“The acceleration actions we’ve announced today will allow us to achieve our value proposition priorities at Brent prices of about $50[/bbl],” said Ryan Lance, ConocoPhillips chairman and chief executive officer.
ConocoPhillips last month reported a third-quarter net loss of $1 billion, down slightly from a third-quarter 2015 net loss of $1.1 billion.