According to the latest Reuters report, ConocoPhillips has beaten its 2017 asset sales target less than four months into the year, after dropping US$30.8 billion worth of energy assets in six years.
Despite this encouraging result, Chief Executive Ryan Lance is facing investor skepticism that the company can deliver growth from remaining oil and gas fields.
ConocoPhillips' most recent sales of Canadian oil-sands properties and US natural gas wells for a combined US$16 billion will part with nearly 30% of its proved reserves in order to deliver near-term shareholder payouts and pare debt.
ConocoPhillips can achieve flat to 2% annual production growth on its properties, after adjustments for sales, and deliver shareholder payouts.
But interviews with portfolio managers, former employees and industry analysts point to the frequent sales as a short-term fix. Investors worry ConocoPhillips' plan for modest production growth, flat capital spending and steady shareholder payouts pales in comparison to rivals that have retooled themselves to deliver sharply higher growth rates.
The danger of its reliance on fewer assets was driven home in recent weeks as a fire at a supplier hurt its ability to ship crude from oil-sands properties.
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