Summary
- ConocoPhillips has sold its UK E&P assets in a deal which looks largely fair.
- The deal production will fall by another 5% as ConocoPhillips is continuing to shrink and simplify its operations.
- While the shrinking part goes well, real growth still has to be seen as I am not particularly attracted to the shares just yet, missing triggers to buy shares.
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ConocoPhillips (COP) announced quite a sizeable divestiture as it has reached a deal to sell its UK exploration & production companies. The deal looks largely fair as the multiple does not look that convincing based on current production, but if we consider that higher than average break-even costs and small reserve base, it looks fine or better, said fair.
The company continues to deliver on the shrink-to-grow strategy and while the shrinking part is going well, growth still has to be seen as I am not necessarily buying shares just yet.
