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July 14, 2011 3:03 PM

Wachtell Advising ConocoPhillips on Split Plan

Posted by Brian Baxter

Houston-based ConocoPhillips, the nation's third-largest integrated oil and gas company, announced Thursday that it plans to split itself into two publicly traded companies.

ConocoPhillips intends to spin its refining business off to shareholders by the first half of next year, while holding on to its higher-margin exploration operations, according to The New York Times. The plan is aimed at allowing each unit to focus on its core operations in order to increase profitability.

A ConocoPhillips spokesman says that the company has retained Wachtell, Lipton, Rosen & Katz to advise it on the split. Name partner Martin Lipton, corporate partners Andrew Brownstein and Gregory Ostling, tax partner Deborah Paul, executive compensation partner Jeremy Goldstein, and counsel Nancy Greenbaum are working on the matter for the firm.

Wachtell advised ConocoPhillips last year on the sale of 7.6 percent of its shares in Lukoil back to the Russian company for $3.4 billion. Brownstein handled that deal for ConocoPhillips and also advised predecessor company Phillips Petroleum on the $15.6 billion merger with Conoco in 2002 that created the current entity.

Brownstein subsequently advised ConocoPhillips on its $1.98 billion purchase of an initial stake in Lukoil in 2004 and $35.6 billion acquisition of oil and gas producer Burlington Resources in 2005. Despite the flurry of deals, ConocoPhillips has struggled in recent years, announcing a plan in 2009 to sell off $10 billion in assets to raise capital and return value to shareholders.

ConocoPhillips turned to Cleary Gottlieb Steen & Hamilton in August 2008 for the $800 million sale of more than 600 iconic Union 76 gas stations. In April 2010, Canadian firm Osler, Hoskin & Harcourt represented ConocPhillips on the $4.64 billion sale of a 9 percent stake in a Canadian oil sands joint venture to China's Sinopec.

Janet Langford Kelly, general counsel for ConocoPhillips, is a former Wachtell corporate associate who joined the company as deputy general counsel in 2006. She previously was a partner at Sidley Austin and Zelle Hofmann Voelbel & Mason and served as general counsel for Sara Lee Corporation and chief compliance officer at the Kellogg Company.

The plan to split ConocoPhillips in two does not require the approval of shareholders. Forbes has more on what the company's split plan means for the U.S. oil and gas industry.

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