ConocoPhillips (COP) Is Setting a New Standard for Big Oil

Beyond that, once the second half of the year has become history another $9 billion or so will have been dropped into the company’s coffers from sales of assets in Algeria, Nigeria, and Kazakhstan.

Beyond that, in August Conoco announced another pair of sales. For $720 million, it’s selling its stake in 226,000 acres of undeveloped Alberta tar sands properties to a partnership consisting of Exxon Mobil Corporation (NYSE:XOM) and Calgary-based Imperial Oil Limited (USA) (NYSEMKT:IMO) . In addition its Trinidad and Tobago holdings will soon be transferred to the National Gas Company of Trinidad and Tobago for $600 million.

Making hay at home
Conversely, ConocoPhillips (NYSE:COP)’ attention to the U.S. onshore has borne fruit. Onshore, where it is well positioned, its operations in the Eagle Ford, Bakken, and Permian Basin collectively yielded 47% more barrels of oil equivalent in the second quarter than in the same period of 2012. That followed 42% year-over-year improvement for the prior quarter.

Conoco also continues to be active in the Gulf of Mexico. You may recall that the company’s first quarter of 2013 yielded two significant Gulf discoveries. And then in March, it was high bidder on 30 blocks — representing about 172,000 acres — in a Gulf lease sale. Just last week it also paid more than $30 million in a western Gulf sale for the rights to explore a tract about 200 miles south of Galveston, Texas.

Internationally, largely through its efforts in Bohai Bay and in the Panyu project offshore China, along with the Gumusut in Malaysia, its production in Asia-Pacific and the Middle East increased by 20% from a year earlier. It’s also been busy in the Kwanza Basin of Angola, a hot new play that has turned out to be a deepwater mirror of Brazil’s Santos Basin.

Misplaced skepticism
There are those who maintain that the dearth of major acquisitions of late among what are typically referred to the Big Three (Exxon, Chevron, and ConocoPhillips (NYSE:COP)) is attributable to the encumbrances created by the size of the companies. As Oppenheimer’s energy analyst Fadel Gheit was quoted as saying recently, “They have to reinvent themselves. These companies are too big to grow.”

Foolish bottom line
I’d contend that that’s precisely what ConocoPhillips (NYSE:COP) has been up to, likely to the ongoing benefit of its shareholders.

The article ConocoPhillips Is Setting a New Standard for Big Oil originally appeared on Fool.com is written by David Smith.

Fool contributor David Smith owns shares of Denbury Resources. The Motley Fool owns shares of Denbury Resources. 

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