Conocophillips Provides Notice That It Is Exercising Its Preemption Right To Purchase The Remaining 50% Interest In Surmont; Exercising Its Preemption Right To Purchase Remaining 50% Interest In Surmont From Totalenergies EP Canada Ltd. For About $3B
Portfolio Pulse from Happy Mohamed
ConocoPhillips (COP) is exercising its preemption right to purchase the remaining 50% interest in Surmont from TotalEnergies EP Canada Ltd. for approximately $3 billion. The transaction is expected to close in the second half of 2023 and will add approximately $600 million of annual free cash flow in 2024.
May 26, 2023 | 4:23 pm
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NEUTRAL IMPACT
TotalEnergies EP Canada Ltd. is selling its remaining 50% interest in Surmont to ConocoPhillips for approximately $3 billion.
TotalEnergies EP Canada is selling its remaining interest in Surmont, which will result in a cash inflow of approximately $3 billion. However, the impact on the stock price is uncertain as the sale could be seen as a positive move to raise cash or a negative move due to the loss of future revenue from the asset.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
ConocoPhillips' acquisition of the remaining 50% interest in Surmont will increase its ownership to 100% and add approximately $600 million of annual free cash flow in 2024.
The acquisition will increase ConocoPhillips' ownership in Surmont to 100%, enhancing its returns-focused value proposition and supporting its $11 billion planned return of capital in 2023. The added annual free cash flow of $600 million in 2024 is a significant boost, which is likely to have a positive impact on the stock price in the short term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100