Hidden CITGO refining value in ConocoPhillips
Doubled refining valuations put ConocoPhillips' $11 billion CITGO claim in the money
Amber Energy won CITGO at about $7.7 billion of equity value, covering ConocoPhillips' smaller priority claims but leaving an $11 billion junior claim unpaid. U.S. refining equities have re-rated from 1.82x to 3.46x book, implying CITGO fair value near $15.5 billion if a similar 33% sector discount is kept. That increment would put the junior claim roughly $3.5 billion in the money. The 2025 share purchase agreement can still be displaced by a Superior Proposal before close, opening a path to about $5 billion of CITGO recovery and conversion of residual claims into Venezuelan upstream assets.
| Instrument | Side | Target | Reason |
|---|---|---|---|
| COP | Long | U.S. refining equities have roughly doubled on book since the Amber auction, so CITGO fair value is about $15.5 billion versus a $7.7 billion contracted price. That uplift puts the $11 billion junior claim around $3.5 billion in the money, and a Superior Proposal can still displace Amber before close. A fair-value settlement could deliver about $5 billion of cash or equity plus residual claims convertible into Venezuelan upstream assets, implying around 10% equity upside. |
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