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ConocoPhillips was on track to post its biggest rally in four months as investors applauded its sale of oil-sands assets that will help the energy group cut its debt load.

The Texas-based company’s share price roared 7.4 per cent higher in mid-day trading in New York to its highest level since February 15.

ConocoPhillips revealed late on Wednesday a deal to sell a large swath of its oil sands assets to Canada’s Cenovus Energy. The move will substantially reduce ConocoPhillips’s production of the type of crude that is more complex and expensive to drill for than shale oil — an important factor given the fall in oil prices since 2014.

Analysts at UBS upgraded their rating for ConocoPhillips to “buy” from “neutral” on the heels of the decision to divest the “low growth, low margin asset”. As a result, the analysts said, ConocoPhillips will be able to reduce its debt by about $7bn and double its share buyback programme.

Alex Topouzoglou, an energy specialist in Stifel’s trading division, added that “this continues [ConocoPhillips's] refocus to the US onshore [market] and marks the exit or partial [exit] from Canada from yet another international player”.

Investors had quite the opposite reaction to Cenovus’s decision to pick up the assets, sending its shares plummeting 12.6 per cent in Toronto trading and putting the stock on track for its worst-ever trading day.

Benny Wong, an analyst at Morgan Stanley, said that the price of the deal was “not as sweet as recent industry oil sands deals”. However, Mr Wong reckons that the pact still provides a “number of strategic benefits”.

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