U.S. oil major ConocoPhillips has surpassed its target for the 2016 planned asset sale gaining $1.3 billion in proceeds that is being used for debt reduction.
The proceeds from these dispositions are also being used for share repurchases and general corporate purposes.
The company said on Wednesday it generated approximately $1.3 billion of proceeds from asset dispositions in 2016.
Approximately $0.8 billion of these proceeds will be recorded in the fourth quarter, primarily reflecting the sale of the company’s interests in Senegal and the Indonesia Block B PSC through sales of shares, as well as its interest in assets in the North Cook Inlet and Minnesota iron ore properties.
The 2016 production associated with the asset dispositions is 27 thousand barrels of oil equivalent per day (mboed). Production guidance for 2016 remains unchanged at 1,560 to 1,570 mboed. Production in 2017, excluding Libya, is expected to range from flat to 2 percent growth compared with 2016 when adjusted for the full-year impact of the 2016 dispositions.
As previously announced, in October the company paid down $1.25 billion of debt. Additionally, the company reduced its 2019 term loan by $0.15 billion in December. Including approximately $0.8 billion of commercial paper that was retired in the second quarter of 2016, the company has paid down approximately $2.2 billion of debt this year, the company said.
ConocoPhillips noted that these actions supported the initiation of the company’s $3 billion authorized share repurchase program which started in mid-November.
Ryan Lance, chairman and chief executive officer, said: “Our company is focused on generating free cash flow that will be allocated toward debt reduction, shareholder distributions and modest growth. We surpassed our $1 billion asset disposition target for 2016 and are confident in our ability to deliver on our planned $5 to $8 billion asset disposition program over the next two years, which will accelerate our value proposition.”