Plans: ConocoPhillips boss Jim Mulva
ConocoPhillips eyes Burlington
US oil giant ConocoPhillips is in talks to buy independent natural gas producer Burlington Resources for more than $30 billion, sources said today.
If ConocoPhillips and Burlington do a deal it would add more than 50% to the supermajor's natural gas production at a time when natural gas is pushing record high prices of $15 per million British thermal units.
The Wall Street Journal reported the deal could be done as soon as this week.
"It's a very good deal, although the financial sector might perceive it negatively that ConocoPhillips is paying such a premium," said Fadel Gheit, an analyst at Oppenheimer & Co.
"But I think these assets today will be worth a lot more tomorrow or next year."
"It is a huge bet on natural gas. This is the most lucrative part in the energy chain," Gheit added.
Burlington’s portfolio includes exploration and production assets in the US, China, Canada, Algeria, Latin America and Europe.
The company’s estimated 2005 production is between 1.9 billion and 1.92 billion cubic feet per day of gas, plus between 91,000 and 94,000 barrels per day of oil, and between 66,000 and 67,500 bpd of natural gas liquids.
Burlington’s reserves stood at a little over 12 trillion cubic feet of gas equivalent at the end of 2004, with gas accounting for more than two thirds of the total.