ConocoPhillills Sells Ursa, Europa Interests to Shell for $735M

ConocoPhillips (NYSE: COP) has announced a strategic divestment, agreeing to sell its interests in the Ursa and Europa Fields, along with the Ursa Oil Pipeline Company, to Shell subsidiaries for $735 million. The transaction, subject to customary closing adjustments, is expected to close by the end of Q2 2025, with an effective date of January 1, 2025. The proceeds will be used for general corporate purposes, contributing to ConocoPhillips' progress toward its $2 billion disposition target.

The assets being sold currently produce approximately 8 thousand barrels of oil equivalent per day (MBOED). The deal values the divested production at approximately $92,000 per flowing barrel, which is notably above the industry average for mature Gulf of Mexico assets, suggesting favorable deal terms for ConocoPhillips. This transaction demonstrates strong execution of ConocoPhillips' portfolio optimization strategy, as it continues to divest non-core assets and make significant progress toward its $2 billion disposition target.

The relatively small production impact (0.4% of total production) versus the substantial proceeds indicates effective high-grading of ConocoPhillips' asset base. This transaction strengthens ConocoPhillips' balance sheet flexibility while having minimal impact on its production profile. The effective date of January 1, 2025, means the company will retain the cash flows from these assets through closing, expected by Q2 2025. Additionally, the inclusion of an overriding royalty interest in the Ursa Field provides ongoing exposure to potential upside without operational responsibilities.

For Shell, this acquisition aligns with its strategy of consolidating positions in core areas where it already has operational expertise and infrastructure. The Gulf of Mexico remains a key focus area for major operators due to its stable regulatory environment and established infrastructure. By acquiring these assets, Shell strengthens its presence in the region and can leverage its existing capabilities to optimize operations and reduce costs. This transaction also allows Shell to progress towards its emissions reduction targets and position itself for a lower-carbon future.




In conclusion, ConocoPhillips' decision to sell its interests in the Ursa and Europa Fields and Ursa Oil Pipeline Company to Shell subsidiaries for $735 million is a strategic move that reflects the company's commitment to portfolio optimization and adaptation to the energy transition. The transaction's favorable valuation metrics and ConocoPhillips' ability to secure a premium for its assets indicate strong market conditions and a competitive bidding environment. This deal also highlights broader industry trends, such as the focus on core assets and the importance of strategic divestments in the face of the energy transition.