(COP) has recently submitted its proposals to the Norwegian Oil Ministry for further development of the North Sea Ekofisk South and Eldfisk offshore fields.
While the company said that final investment decisions will be taken in 2011, the estimated amount for both the fields is expected to be $12.2 billion, including $4.28 billion − $5.14 billion on Ekofisk South field and $6 billion − $7.1 billion on Eldfisk II. Both fields are part of the Greater Ekofisk Area that ConocoPhillips operates in and where it has a 35.1% interest.
With leading positions in both natural gas and heavy crude oil in North America, a legacy position in the North Sea and growing exposure to lucrative international regions, Conoco expects to replace reserves and sustain production growth over the long term.
Conoco has decided to sell $10 billion of assets over the next two years. Depending on how the sale progresses, the company may see a downtrend in its reserves at the end of 2010 or 2011. This new development can partially offset this situation with an expected addition of recoverable reserves in the range of 377−503 million barrels of oil equivalent.
Despite being the third-largest US oil integrated by market value after ExxonMobil Corp. (XOM) and Chevron Corp. (CVX), Conoco is the most leveraged (debt-to-capitalization ratio of 31%) among its peers and has almost no exposure to the prolific non-conventional plays. Our Neutral recommendation for the stock reflects this view. 

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