ConocoPhillips is exploring the sale of a portfolio of Permian Basin assets worth approximately $2 billion. The assets, located in the Delaware Basin portion of the Permian Basin across West Texas and New Mexico, were acquired through prior deals with Concho Resources and Shell. The divestiture is part of a broader effort to streamline upstream holdings and focus on higher‑margin opportunities.
The company has set a $5 billion asset‑sale target for the end of 2026 and has already completed $3.2 billion in sales during 2025. While the sale would reduce the long‑term production base, management intends to use the proceeds to reduce debt or fund future capital projects, thereby improving operational efficiency and return on capital.
ConocoPhillips’ Q4 2025 earnings showed adjusted earnings per share of $1.02, missing consensus estimates of $1.23 by $0.21, largely due to a 19% year‑over‑year decline in realized commodity prices. Revenue fell 3.7% to $13.86 billion. Despite the miss, the company maintained a 45% cash‑from‑operations return to shareholders and raised its ordinary dividend to $0.84 per share.
The sale aligns with the company’s post‑Marathon Oil acquisition strategy. The Marathon acquisition, closed in late 2024 for $22.5 billion, expanded ConocoPhillips’ asset base in key U.S. shale regions. By divesting non‑core Permian assets, the company can focus capital on higher‑return projects such as the Willow oil project and LNG investments, which are expected to generate significant free cash flow in the coming years.
Management has emphasized that it is done with major M&A and is focusing on organic growth and cost efficiencies. CEO Ryan Lance highlighted the successful integration of Marathon Oil, with synergy capture doubling ahead of schedule. The potential sale signals a continued commitment to portfolio optimization and disciplined capital allocation.
Investors will monitor how the proceeds are deployed and the impact on future production and earnings. The announcement reflects broader market trends where energy producers reassess portfolios amid fluctuating commodity prices and capital‑allocation pressures.
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