DuPont Divestiture of Conoco

Student Name:
Course ID: FIN561 Merger & Acquisition
Assignment ID: Week 5 - You Decide Project
Instructor: Jeffrey Hardin
Date: November 29, 2013

Table of Content
Executive Summary……………………………………………………………………………………………….3

Executive Summary

1.0 Background

The divestiture of Conoco by DuPont also reflected changing conditions in the energy industry. As noted in a May 12, 1998, article in the New York Times: DuPont bought the oil company in 1981 as insurance against the pricing and supply tactics of the Organization of Petroleum Exporting Countries. But oil prices have been far less volatile than it feared, and DuPont continues to de-emphasize the petrochemical side of its …show more content…

Downstream activities include refining crude oil and other feedstocks into petroleum products, buying and selling crude oil and refined products and transporting, distributing and marketing petroleum products. Conoco is also engaged in developing and operating power facilities.

As of December 31, 1998, Conoco had proved worldwide reserves of 2,622 million barrels of oil equivalent, 39 percent of which were natural gas. In this document, natural gas volumes have been converted to barrels-of-oil-equivalent using a ratio of 6,000 cubic feet of natural gas to one barrel-of-oil-equivalent. Based on 1998 annual production of 213 million barrels-of-oil-equivalent, excluding natural gas liquids from gas plant ownership, Conoco had a reserve life of 12.3 years as of December 31, 1998. Over the last five years, Conoco has replaced an average of 195 percent of the oil and gas it produced each year. Conoco owns or has equity interests in nine refineries worldwide, with a total crude oil and condensate processing capacity of approximately 807,000 barrels per day. Conoco also has a marketing network of approximately 7,900 outlets in the United States, Europe and Asia.

Based on public filings, for the year ended December 31, 1998, Conoco ranked eighth in worldwide production of petroleum liquids by U.S.-based companies, eleventh in natural gas production and eighth in refining throughput.
Over that same period, Conoco reported net