ConocoPhillips (NYSE:COP) has propped up its sell out bid for some of its assets, maimed by the disgruntling scenario across the world, wherein the oil prices witnessed steady decline since June 2014. On Friday, COP spokespersons revealed the company’s intentions to sell off one fifth stakes in its production unit located in the geography of West Canada, beyond the sands.
Lower Profitability Is The Premise
The moot point or the premise behind this purported sell off is the low profitability of the company’s operations across Canada. ConocoPhillips (NYSE:COP) operates oil sands based and conventional operating units across Canada. Moreover, the organization has cut down its net workforce by 7 percent, wherein 200 employees are ought to be removed from various rolls in the organization.
Since June 2014, oil prices have fallen at massive rates, as much as 60 per cent and beyond. Thus these proposals to sell off part of the ownership stakes or cutting down on manpower are legit moves; such steps are deemed to occur henceforth, if the oil prices keep on floundering.
Properties That Are To Be Sold Off
The properties that are considered for quick divesture are primarily based on Eastern and Southern Alberta, North-East British Columbia, Saskatchewan. Andrea Urbanek mentioned about the divesture in a public or media statement.
The gas rich assets help in producing 35,000 barrels per day of oil in Q3-2014. Further, the company has sought advice from the esteemed Bank of Nova Scotia pertaining to this procedure related to the divesture.
ConocoPhillips (NYSE:COP) has also come up with a net capital budget for 2015 which is far lower than anticipated. The budget is approximately lowered by $2 billion and it has been slated to be $11.5 billion. The company expects to maintain this sort of budget for the next couple of years. COP is going after maintaining a fair share of profits in the coming days.