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wcaseym (40.01)

Peak Optimism!



April 26, 2010 – Comments (2)

On March 25, ConocoPhillips (COP) CEO Jim Mulva admitted that pursuing new oil reserves just doesn't pay. The remaining resources have become too marginal and too expensive, and the competition for them has become too intense.

Rather than keep slugging it out with bigger and better-funded players in pursuit of growth, Conoco has decided to sell $10 billion worth of its assets over the next two years, all of them in the marginal category, and concentrate on producing its core assets.

The proceeds will be used to buy back its stock, reduce its debt, and raise dividends — just as rival ExxonMobil (XOM) has been doing for the last five years or so.


2 Comments – Post Your Own

#1) On April 26, 2010 at 1:05 PM, starbucks4ever (67.64) wrote:

That makes sense (except share buybacks). COP is a smarter oil company than most. Still, the current price does not make me salivate. But I will be a buyer at $6 a share.

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#2) On April 26, 2010 at 1:39 PM, wcaseym (40.01) wrote:

I will be a buyer at $6 a share.

The risks of searching for oil were brought home this week with the explosion and sinking of the oil-drilling rig Deepwater Horizon, you know?

Ode to the Rig here:


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