ConocoPhillips (COP) recently received approval from federal officials to pull a collection of North Slope oil and gas leases into a new oil-field unit, a predecessor to development and production. For this purpose, the company partners with Anadarko Petroleum (APC). The leases are in the National Petroleum Reserve (Alaska) and on the western side of Alaska’s North Slope.
The new oil-field unit, named Bear Tooth Unit, includes 23 leases and approximately 105,000 acres, located northwest of the company’s Mooses Tooth Unit. The company said that both the units have sites of known oil discoveries. While production from the Mooses Tooth Unit is expected to commence sometime between 2012 and 2014, Bear Tooth would be online later.
ConocoPhillips has recently relinquished a few leases that do not fit within its strategic plan based on the potential for commercial development.
ConocoPhillips has significantly transformed its asset portfolio over the last few years through major acquisitions and targeted divestitures. As a result, the company has a high level of exposure to and presence in the fiscal and politically stable OECD markets.
Management has ruled out major deals as well as relinquished leases, instead focusing on exploration efforts such as the Chukchi Sea. The shift in focus is commendable, but is not expected to produce material changes anytime soon. Therefore, we rate the stock as a Neutral.
Read the full analyst report on “COP”
Read the full analyst report on “APC”
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