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ConocoPhillips: No plans to separate international, U.S. assets

BY ALISON SIDER  
HOUSTON -- ConocoPhillips Chief Executive Ryan Lance said Thursday the independent oil company intends to maintain its global profile, despite a recent trend among activist shareholders calling for the separation of valuable, high-growth U.S. conventional assets from international operations in order to unlock value.

"We all read the papers and see what' s going on," Mr. Lance said, referring to high-profile campaigns by activist investors looking to restructure companies such as Hess Corp.

"We think diversification globally and amongst all these different resource types and asset types is important for a company our size," he said.

Last year ConocoPhillips completed the spinoff of its refining arm into Phillips 66. And the company has aggressively downsized its portfolio, announcing some $12 billion in asset sales in places such as Algeria, Nigeria and Kazakhstan.

The company has aimed to focus on its U.S. unconventional portfolio in Texas' s Eagle Ford shale and North Dakota' s Bakken, and said it is succeeding. The company said its daily production in the two regions jumped 71% from the 2011 fourth quarter and is expected to ramp up further this year.

Chief financial officer Jeff Sheets said during the conference call that ConocoPhillips is competitive with smaller, more focused companies in these regions.

"We can compare ourselves to the smaller independents, whether it' s Eagle Ford or Permian or Bakken, we look across the fence and we' re competing," he said.

The question of whether a company can be successful both in U.S. unconventional resource basins as well as larger scale fields in challenging foreign locales and in deepwater drilling was on analysts' minds during ConocoPhillips' earnings call. Earlier this week activist investor Elliott Management said Hess, a smaller company, could drive its stock to $126 per share if it were to sell off its remaining downstream assets and spin off its fast growing Bakken and Utica properties from a more streamlined international porfolio.

ConocoPhillips is more than three times larger than Hess, with a market capitilization of $70.6 billion.

 

01/31/2013

 

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