Aiming to reduce debt and boost cash flow, ConocoPhillips has exceeded its goal of selling $1 billion in assets this year, paving the way toward modest growth in 2017.
Instead, the largest U.S. independent exploration and production (E&P) company generated about $1.3 billion in proceeds from asset dispositions for the year. Production from these sales amounted to 27,000 barrels of oil equivalent in 2016, the company said in a statement.
ConocoPhillips paid down about $2.25 billion in debt this year, a move designed to strengthen its balance sheet and prepare for the initiation a $3 billion share repurchase program, which began in November.
“Our company is focused on generating free cash flow that will be allocated toward debt reduction, shareholder distributions and modest growth,” said CEO Ryan Lance in the statement. “We surpassed our $1 billion asset disposition target for 2016, and are confident in our ability to deliver on our planned $5 to $8 billion asset disposition program over the next two years, which will accelerate our value proposition.”
The Houston-based E&P intends to sell billions of dollars in natural gas assets and trim its capital budget by 4 percent in 2017.
In response to the downturn, many E&P companies have narrowed their focus to a few, specialized assets, while divesting those outside of core operating areas as a means of trimming debt and boosting cash flow.
Under pressure from activist investor Carl Icahn to reduce more than $18 billion in debt, Freeport-McMoran has generated more than $6 billion in cash through the sale of estranged assets, including a November deal to sell $2 billion in Gulf of Mexico assets to Anadarko Petroleum Corp.
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