Oando Energy Resources Inc. (OER.T) agreed to acquire ConocoPhillips' (COP) businesses in Nigeria for about $1.79 billion in a deal that the Calgary-based exploration and production company said will increase its presence in the African nation.
Houston-based Conoco is in the midst of a three-year repositioning aimed at improving its balance sheet and focusing on more-profitable, less-risky unconventional fields in North America. ConocoPhillips has sold or plans to sell more than $7 billion in assets in 2012, including a $5 billion sale of its stake in Kazakhstan's Kashagan field in the Caspian Sea announced last month. The company also spun off its refining arm earlier this year as Phillips 66 (PSX).
Under the deal with Oando, expected to close in the first half of next year, the Canadian company will gain Conoco assets in Nigeria including interests in oil ventures, a liquified natural-gas projects and a deepwater exploration program.
Oando, which has been listed on the Toronto Stock Exchange for five months, also gains access to average production of about 43,000 barrels of oil equivalent a day and proved reserved of roughly 213 million barrels of oil equivalent.
The plans to finance the deal, which is expected to close in the first half of next year, include debt and equity.
Oando Chief Executive Pade Durotoye said, "Our management team is familiar with the assets contained in this proposed transaction and, we believe, possess the regional experience and technical expertise necessary to capture and unlock their future value for our shareholders."
Oando plans to provide more details in a conference call Friday at 10 a.m. EST.
Conoco shares were up two cents at $59.30 in recent after-hours trading.
Tess Stynes/Dow Jones News Wire