The Zacks Analyst Blog Highlights: ConocoPhillips, Eni SpA, ExxonMobil, Royal Dutch Shell and Total SA

The Zacks Analyst Blog Highlights: ConocoPhillips, Eni SpA, ExxonMobil, Royal
                           Dutch Shell and Total SA

PR Newswire

CHICAGO, Nov. 28, 2012

CHICAGO, Nov. 28, 2012 /PRNewswire/ announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include ConocoPhillips (NYSE:COP), Eni
SpA (NYSE:E), ExxonMobil Corporation (NYSE:XOM), Royal Dutch Shell Plc
(NYSE:RDS.A) and Total SA (NYSE:TOT).


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Here are highlights from Tuesday's Analyst Blog:

Conoco to Shed Stake in Kazakhstan

ConocoPhillips (NYSE:COP) plans to sell off its interest in Kazakhstan's giant
oilfield, Kashagan, to India's major energy explorer, ONGC Videsh Limited,
which is the international arm of India's Oil and Natural Gas Corporation Ltd.
This marks Conoco's ongoing effort to offload its non-core properties while
investing in new high-margin areas and boosting profitability. The
transaction, expected to close in the first half of 2013, is subject to
customary closing conditions.

The to-be sold properties include ConocoPhillips' 8.4% interest in the giant
Kashagan field in Kazakhstan that will fetch $5 billion for the company.
Located in the North Caspian Sea, approximately 50 miles (80 kilometers)
southeast of Kazakhstan, the Kashagan field found in the past 40 years is
considered the largest in the world.

Kashagan has estimated reserves of 30 billion barrels of oil, of which 8
billion to 12 billion are potentially recoverable. First oil from the field is
expected next year. The field is developed by a consortium comprising Eni SpA
(NYSE:E), ExxonMobil Corporation (NYSE:XOM), Royal Dutch Shell Plc
(NYSE:RDS.A), French energy giant Total SA (NYSE:TOT), Japan's INPEX Holdings
Inc, ConocoPhillips and the Kazakh state-run oil company KazMunaiGas.

KazMunaiGas entered the Kashagan project in 2005 as a shareholder and since
then has doubled its stake to 16.81%. The other partners also hold a share
identical to KazMunaiGas barring INPEX with 7.56% interest and ConocoPhillips
with 8.4%.

Eni was in charge of phase I of the field's development while Shell was
accountable for production operations. However, the project ran into delays
since its discovery. These included technical problems of extracting oil in an
extreme climate and the presence of sulphide in the associated natural gas.
Besides these hurdles, rising costs have been an impediment.

As part of ConocoPhillips' three-year strategic plan, the Houston, Texas-based
company plans to shed assets that do not fit well with its business model. It
has generated $2.1 billion in proceeds from asset sales for the first nine
months of 2012 and has maintained a divestment target of $8–10 billion through
2013 end. The latest sale will bring about $7 billion in proceeds for the
company. The proceeds are earmarked for portfolio optimization, debt reduction
and increasing shareholder distribution.

ConocoPhillips said that the book value of assets related to its Kashagan
interest was about $5.5 billion as of September 30. It expects to record an
after-tax impairment of about $400 million in the fourth quarter in order to
lessen the carrying value to fair value.

We maintain our long-term Neutral recommendation on the company, which retains
a Zacks #3 Rank (short-term Hold rating).

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