HOUSTON - ConocoPhillips is selling some properties in North Dakota and Montana to a subsidiary of Denbury Resources Inc. for $1.05 billion.
The oil and natural gas company said Tuesday that the Cedar Creek Anticline properties span about 86,000 net acres in southwestern North Dakota and eastern Montana. Net production from the properties averaged 13,000 barrels of oil equivalent per day through November.
The sale doesn't include any of ConocoPhillips' Bakken Formation assets. The company owns 626,000 net acres there.
"The transaction will allow us to focus our investments in North Dakota and Montana on our significant Bakken unconventional position," Don Wallette, executive vice-president of commercial, business development and corporate planning, said in a statement.
Denbury, based in Plano, Texas, said that it plans to pay for the transaction with part of the approximately $1.3 billion in cash it received from the first phase of its deal to sell its holdings in the Bakken oil field to Exxon Mobil Corp. The first phase of the sale closed in December.
"Strategically, we are now purely focused on what we do best, CO2 enhanced oil recovery, which we believe offers one of the lowest risk, and most compelling rates of return in the oil and gas industry today," Denbury President and CEO Phil Rykhoek said in a statement.
Shares of Denbury added 62 cents, or 3.7 per cent, to $17.50 in premarket trading.
With this deal, ConocoPhillips has raised about $12 billion from asset sales since the start of 2012. Proceeds from the sales will be used for general corporate purposes.
ConocoPhillips, based in Houston, anticipates an approximately $120 million earnings benefit in its fourth quarter related to the Cedar Creek Anticline transaction.
The sale comes less than a month after ConocoPhillips announced that it was selling its Nigerian business unit to Oando PLC for roughly $1.79 billion.
The deal is expected to close in the first quarter.