ConocoPhillips (NYSE:COP) has successfully concluded its acquisition of the remaining stake in the Surmont oil sands project, solidifying its full ownership of this prominent Alberta-based operation. The acquisition, which came with a price tag of $3 billion, also includes $325 million in contingent payments.
Situated in northeastern Alberta, Surmont ranks as Canada’s fourth-largest oil sands site, boasting an April production rate of approximately 135,000 barrels of oil per day. Alberta’s oil sands, holding some of the world’s most extensive crude reserves, remain an attractive proposition for oil and gas producers aiming to bolster their production capabilities. This acquisition empowers ConocoPhillips to manage the assets independently, free from the constraints of coordinating with partners. It also enhances the diversity of ConocoPhillips’ portfolio, which has been predominantly focused on U.S. shale.
This strategic move reinforces COP’s commitment to delivering robust returns, bolstering its return on capital employed, lowering the breakeven point for free cash flow, and generating substantial free cash flow for years to come. The company has plans to further optimize these newly acquired assets.
In line with its sustainability goals, ConocoPhillips is making progress toward its previously announced greenhouse gas intensity reduction target of 50-60% by 2030, based on a 2016 baseline. Notably, Surmont has already achieved a 20% reduction in greenhouse gas emissions intensity since 2016, with the company actively planning for additional reductions through the utilization of existing and emerging technologies.
Headquartered in Houston, Texas, ConocoPhillips primarily focuses on the exploration and production of oil and natural gas. In 2022, the upstream energy leader produced an impressive 1,738 thousand barrels of oil equivalent (BOE) per day, with oil accounting for more than 51.7% of its production portfolio.
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