ConocoPhillips Dumps U.S. Offshore Assets

---

Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--After saying earlier this year that it expected higher production rates in 2025, ConocoPhillips (NYSE:COP) (Houston, Texas) offloaded its minority interests in two fields in the Gulf of Mexico (designated as the Gulf of America by the Trump administration) as part of a multi-billion-dollar divestment spree.

For $735 million, Conoco sold off its 15.96% interest in the Ursa field and 1% interest in the Europa field to Shell plc (NYSE:SHEL) (London, England).

"Combined with previously announced dispositions, this transaction reflects our ongoing commitment to further strengthen our portfolio by divesting noncore assets and shows significant progress toward our $2 billion disposition target," said Andy O'Brien, a senior vice president for strategy at ConocoPhillips.

ConocoPhillips reported $2.4 billion in adjusted net income during fourth-quarter 2024, compared with $2.8 billion during the same period in 2023. It realized an average price of $54.83 per barrel-of-oil-equivalent production, compared with $58.39 in 2023. Crude oil prices were largely rangebound in 2024, while natural gas prices hit historic lows due to suppressed demand.

ConocoPhillips closed on an all-stock, $22.5 billion deal to acquire Marathon Oil Corporation in November.

Both companies are among the largest of their kind. Marathon Oil's assets included pipeline and production centers in the Bakken shale in North Dakota and Eagle Ford in Texas. Closing the deal made ConocoPhillips one of the largest stakeholders in both basins.

ConocoPhillips' interest in the disposed offshore assets was small and combined for only 8,000 barrels of oil equivalent per day (Boe/d).

In its guidance for 2025, ConocoPhillips said it was aiming for about 2.35 million Boe/d in production, an estimate that accounted for planned turnarounds. First-quarter 2025 levels should match full-year guidance, and that includes a slight hit from the inclement weather that rocked much of North America last month.

Shell, for its part, is adding claims to assets it already controls in the Gulf of Mexico. In announcing the acquisition, the company highlighted the Ursa platform.

Located about 130 miles off the coast of New Orleans, Shell said Ursa is one of the "most prolific" basins in the world. Since its discovery in 1999, the field has produced more than 800 million barrels of oil equivalent.

The Gulf of Mexico accounts for about 15% of total U.S. crude oil production, or about 1.8 million barrels per day.

Shell took a beating during the fourth quarter. Net earnings of $3.6 billion were about 40% lower than during the same period in 2023, presumably due to lower crude oil and natural gas prices. For more on that, see February 12, 2025, article - Investors Greet Big Oil Earnings with Mixed Sentiments.

"Despite the lower earnings this quarter, cash delivery remained solid and we generated free cash flow of $40 billion across the year, higher than 2023, in a lower price environment," Shell Chief Executive Officer Wael Sawan said in January.

Like its peers, Shell is working to cut costs. It said in its fourth-quarter release that it has realized $3 billion in costs reductions since 2022.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).