ConocoPhillips to sell Anadarko assets for $1.3 bln; profit beats estimates

By Arunima Kumar

Aug 7 (Reuters) - ConocoPhillips COP.N will sell its Anadarko Basin assets for $1.3 billion, the company said on Thursday, as it sheds non-core acreage following the Marathon Oil acquisition to reduce debt and focus on higher-margin basins.

The asset sale, expected to close at the beginning of the fourth quarter, pushes ConocoPhillips past its target of raising $2 billion ahead of schedule.

The company raised its asset-sale goal to $5 billion by 2026, with an aim to unlock $1 billion in cost and margin gains.

Houston-based ConocoPhillips, which assumed about $5.4 billion in debt as part of its $22.5 billion acquisition of Marathon Oil, has already disposed of assets worth more than $1 billion since the deal closed in November.

It also said it was expecting to generate over $7 billion in incremental free cash flow by 2029.

The Marathon deal helped lift the company's second-quarter production to 2.39 million barrels of oil equivalent per day (boepd), up 446,000 boepd from a year earlier.

Third-quarter production is expected to be 2.33 million to 2.37 million boepd, the company said in a statement.

Shares of ConocoPhillips rose over 1% after it beat second-quarter profit estimates.

RBC Capital Markets analyst Scott Hanold called ConocoPhillips' results "strong," citing higher output, lower costs and a more than $1 billion cost-cutting plan.

He expects the stock to outperform as the update eases cash flow concerns.

Haynes Boone advised ConocoPhillips on the Anadarko sale to Flywheel Energy, an Oklahoma-based producer backed by Stone Ridge Energy.

The production growth helped ConocoPhillips cushion the impact of lower crude prices.

Brent crude LCOc1 averaged nearly 20% lower in the second quarter from a year earlier, as U.S. import tariffs, weak global economic signals and higher output from OPEC+ weighed on prices.

Geopolitical tensions also pressured sentiment. Prices briefly rose above $80 per barrel in June after Israel struck Iranian nuclear sites, but eased to around $67 by the end of the quarter amid demand concerns and fading risk premiums.

CEO Ryan Lance said the global oil market remains "choppy" in the near term despite firm prices, but added that ConocoPhillips remains bullish on natural gas amid growing global LNG demand.

The company's total average realized prices stood at $45.77 per barrel oil equivalent, 19% lower than a year earlier.

On an adjusted basis, ConocoPhillips reported a profit of $1.42 per share for the April-June quarter, beating analysts' average estimate of $1.38, according to data compiled by LSEG.