ConocoPhillips plans to split into two separate, publicly traded companies

By Phaedra Friend Troy

The third-largest oil company in the US, ConocoPhillips (NYSE:COP) has announced plans to split the massive oil and gas firm into two stand-alone, publicly traded companies. The board of directors has approved the split of the refining and marketing segment from the exploration and production segment.

Additionally, the company's CEO and chairman Jim Mulva plans to retire once the separation is complete, which is expected in the first half of 2012.

"Consistent with our strategy to create industry-leading shareholder value, we have concluded that two independent companies focused on their respective industries will be better positioned to pursue their individually focused business strategies," said Mulva. "Both companies will continue to benefit from the size and scale of their significant high-quality asset bases and free cash flow generation, allowing them to invest and create shareholder value in a changing environment."

Once the split is complete, ConocoPhillips will serve as one the world's largest oil and gas exploration and production companies with total reserves of 8.4 billion barrels of oil equivalent, while the downstream company will remain the second-largest refiner in the US with a crude oil processing capacity of 1 million barrels of oil a day and the fourth-largest nongovernment-controlled refiner in the world with 2.7 million barrels of oil a day processing capacity globally.

The separation of ConocoPhillips into two companies does not require a shareholder vote, although it is subject to regulatory approvals and final board approval.

ConocoPhillips is trading at near $80, more than 7 percent higher on the New York Stock Exchange on the news of the split.

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