ConocoPhillips (COP) Completes Surmont Oil Sands' Acquisition
ConocoPhillips COP completed the acquisition of the remaining interest in the Surmont oil sands project, thereby gaining complete ownership of the Alberta operation.
The acquisition involved a $3-billion price tag and $325 million in contingent payments.
Surmont, located in northeastern Alberta, is the fourth-largest oil-sand well site in Canada. The facility produced about 135,000 barrels of oil per day in April.
Canada’s Alberta oil sands hold some of the world’s largest crude reserves, which are appealing to oil and gas producers looking to boost production. The acquisition will enable ConocoPhillips to operate the assets at a rate of its choosing instead of coordinating with partners. The acquisition will provide diversity to ConocoPhillips’ portfolio, which is mainly focused on U.S. shale right now.
The transaction strengthens COP’s focus on delivering returns, boosts return on capital employed, reduces the breakeven point for free cash flow and generates a substantial free cash flow for many years ahead. The company plans to further optimize the acquired assets.
ConocoPhillips is progressing toward its previously announced greenhouse gas intensity reduction target of 50-60% by 2030, using a 2016 baseline. Surmont's greenhouse gas emissions intensity has decreased 20% since 2016 to date. The company is actively planning further reductions in operational emissions by leveraging existing and emerging technologies.
Headquartered in Houston, TX, ConocoPhillips is primarily involved in the exploration and production of oil and natural gas. Through 2022, the upstream energy player produced 1,738 thousand barrels of oil equivalent (BOE) per day, comprising more than 51.7% oil.
COP currently carries a Zack Rank #3 (Hold). Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Pioneer Natural Resources Company PXD is an explorer and producer of oil, natural gas and natural gas liquid. The upstream energy player’s debt to capitalization has been persistently lower than the industry over the past few years, reflecting considerably lower debt exposure.
Pioneer has witnessed upward earnings estimate revisions for 2023 and 2024 in the past seven days. The consensus estimate for PXD’s 2023 and 2024 earnings per share is pinned at $21.17 and $24.78, respectively.
SM Energy Company SM is an independent oil and gas company that explores, exploits, develops, acquires and produces oil and gas in North America. SM's strong cash generation places it in a better financial position, allowing for investments in dividends, debt reduction and future growth.
SM Energy has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for SM’s 2023 and 2024 earnings per share is pegged at $5.69 and $6.81, respectively.
Matador Resources Company MTDR is among the leading oil and gas explorers in the shale and unconventional resources in the United States. MTDR’s prime priorities include lowering debt, delivering free cashflows and maintaining or increasing dividends.
Matador Resources has witnessed upward earnings estimate revisions for 2023 and 2024 in the past seven days. The consensus estimate for MTDR’s 2023 and 2024 earnings per share is pegged at $6.40 and $8.64, respectively.
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