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ConocoPhillips Agrees to Divest North Sea Resources for $2.7B

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ConocoPhillips (COP - Free Report) recently announced its decision to exit exploration and production of oil and natural gas in the North Sea. In line with the plans, the company has signed a deal with Chrysaor E&P Ltd to divest two ConocoPhillips United Kingdom affiliates for a total consideration of $2.7 billion.

The agreement to divest North Sea properties to the private-equity-backed oil firm marks the largest deal of this year so far, with respect to oil and natural gas exploration and production businesses outside America.

Following the divestment of interests in the oil fields of the U.K. North Sea, ConocoPhillips will be streamlining its operations. In fact, the leading upstream energy player is planning to allocate capital to resources where cost of operations will be considerably lower, making operations more efficient.

ConocoPhillips added that the resources to sold produced 72 thousand barrels of oil equivalent per day (MBoE/D) through 2018. Moreover, the company estimated total proved reserves, as of 2018-end, from those assets at 99 million barrels of oil equivalent (BoE).

Investors should know that ConocoPhillips expects to conclude the divestment by the second half of 2019. Chevron Corporation (CVX - Free Report) is reportedly planning to shed North Sea assets as well. This shows that oil majors in the United States are aggressively looking to allocate capital toward prolific shale plays in the domestic market and other prospective resources.

Along with the announcement, ConocoPhillips said that it will be retaining its operatorship along with 40.25% interest inthe Teesside crude terminal. The upstream energy company will also retain commercial trading activities in the United Kingdom.

Headquartered in Houston, TX, ConocoPhillips is the largest independent oil and gas explorer and producer in the world, considering proved reserves and production volumes. Currently, the stock carries a Zacks Rank #2 (Buy). Other prospective players in the energy space are Antero Resources Corporation (AR - Free Report) and ProPetro Holding Corp. (PUMP - Free Report) . While Antero Resources sports a Zacks Rank #1 (Strong Buy), ProPetro Holding carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.  

Antero Resources is likely to see earnings growth of 20% over the next five years.

ProPetro Holding is expected to see 19.5% earnings growth through 2019.

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