- Exxon to restart the sale of its British North Sea assets after a delay due to COVID-19.
- The U.S. oil major expects to raise £790 million to £1.19 billion from the sale.
- Exxon’s U.K. operations are managed by Esso Exploration & Production U.K.
Exxon Mobil’s (NYSE: XOM) plans of selling its assets in the British North Sea were previously delayed due to the Coronavirus pandemic and a sharp slump in global oil prices. In an announcement on Thursday, however, industry sources highlighted that the U.S. oil major has now decided to restart the sale. The news comes a month after Exxon released its financial results for the first quarter.
Shares of the company were reported about 3% down on Thursday. At £36.70 per share, Exxon is currently a little under 35% down year to date in the stock market after recovering from a low of £25 per share in March. Learn more about how can you start trading on the stock market.
Exxon’s U.K. operations are managed by Esso Exploration & Production U.K.
Sources also added that the sale is unlikely to raise as much as originally planned due to a 40% decline in oil prices in the past six months. Exxon, they commented, has held talks with several potential buyers in recent weeks. The oil company is currently considering an investment in Vietnam to develop LNG-to-power plants.
If the Irving-headquartered company gauges insufficient interest in its British North Sea assets at the moment, it is expected to further delay the sale. Exxon refused to comment any further on the news on Thursday.
Esso Exploration and Production U.K. manages the majority of Exxon’s operations in the United Kingdom. The American multinational oil and gas company has interests in around 40 UK-based oil and gas fields. Jefferies investment bank that is serving as Exxon’s advisor for the sale, also declined to comment.
Exxon expects to raise £790 million to £1.19 billion from the sale
Exxon was expecting to raise £1.59 billion via the sale that was originally planned for the end of 2019. Considering the weaker outlook of the oil market, however, the company now anticipates £790 million to £1.19 billion from the sale.
According to Exxon’s website, its daily production of oil and gas currently stands at 80,000 barrels and 441 million cubic feet respectively in the British North Sea, that represents roughly 5% of the U.K.’s total daily demand.
In the long term, Exxon is likely to sell about £19.86 billion worth of assets globally to shore up finances and focus entirely on a few of its mega-projects. As per Reuters, Exxon also restarted the sale of its assets in the largest oil field of Azerbaijan last month.
Exxon remained flat on average in the stock market last year. At the time of writing, the U.S. oil major is valued at £155.09 billion and has a price to earnings ratio of 17.33.