ConocoPhillips Sells Ursa and Europa Fields Interests for $735 Million

ConocoPhillips (NYSE: COP) has announced an agreement to sell its interests in the Ursa and Europa Fields, along with the Ursa Oil Pipeline Company, to Shell Offshore Inc. and Shell Pipeline Company LP, subsidiaries of Shell plc. The transaction is valued at $735 million, subject to customary closing adjustments. The deal includes ConocoPhillips' 15.96% interest in the Ursa Field, 1% interest in the Europa Field, and an overriding royalty interest in the Ursa Field.

The assets being sold currently produce approximately 8 thousand barrels of oil equivalent per day (MBOED). The transaction is expected to close by the end of the second quarter of 2025, with an effective date of January 1, 2025. Proceeds from the sale will be used for general corporate purposes, contributing to ConocoPhillips' progress toward its $2 billion disposition target.

The $735 million sale price represents a strategic transaction for ConocoPhillips, valuing the divested production of 8 MBOED at approximately $92,000 per flowing barrel. This is notably above the industry average for mature Gulf of Mexico assets, suggesting favorable deal terms for ConocoPhillips. The relatively small production impact (0.4% of total production) versus the substantial proceeds indicates effective high-grading of their asset base.

The transaction strengthens ConocoPhillips' balance sheet flexibility while having minimal impact on their 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. 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 their strategy of consolidating positions in core areas where they already have 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.



Andy O'Brien, senior vice president of Strategy, Commercial, Sustainability & Technology at ConocoPhillips, stated, "Combined with previously announced dispositions, this transaction reflects our ongoing commitment to further strengthen our portfolio by divesting noncore assets and shows significant progress toward our $2 billion disposition target."

In conclusion, the sale of ConocoPhillips' interests in the Ursa and Europa Fields to Shell is a strategic move that allows the company to optimize its portfolio, generate significant proceeds, and maintain balance sheet flexibility. The transaction aligns with both companies' long-term strategies and demonstrates the ongoing consolidation trend in the energy sector.