*

Stone Ridge Energy emerged as top bidder in auction of

assets

*

Flywheel Energy to operate assets on behalf of Stone

Ridge,

source says

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ConocoPhillips ( COP ) aims to surpass $2 billion divestment

target

By Shariq Khan

NEW YORK, July 22 (Reuters) - U.S. oil and gas producer

ConocoPhillips ( COP ) is in advanced talks to sell assets in

Oklahoma to privately owned Stone Ridge Energy for around $1.3

billion, three people familiar with the matter told Reuters on

Tuesday.

Oklahoma City-based Flywheel Energy, a private oil and gas

company backed by Stone Ridge Energy, will operate the assets on

its backer's behalf, one of the sources said.

The sources cautioned that no deal is guaranteed and talks

could still end without an agreement. They also spoke on

condition of anonymity to discuss private deliberations.

ConocoPhillips ( COP ) declined to comment. Stone Ridge Energy, the

energy-focused arm of New York-based Stone Ridge Asset

Management, did not immediately respond to a request for

comment.

Flywheel, which also counts commodities trader Gunvor among

its investors, did not immediately respond to requests for

comment.

Reuters reported in April that ConocoPhillips ( COP ) had hired

investment bank Moelis & Co ( MC ) to manage an auction of the

assets, which are comprised of operations in the Anadarko basin

inherited by the energy producer as part of its $22.5 billion

takeover of Marathon Oil last year.

As part of the deal, Stone Ridge Energy will acquire 300,000

net acres (121,406 hectares) in the Anadarko shale formation,

which produce about 39,000 barrels of oil equivalent per day, of

which about half is natural gas.

If completed, the asset sale would help ConocoPhillips ( COP )

surpass a target to raise $2 billion from divestments. Conoco

set that target after it took on about $5.4 billion of

Marathon's debt as part of that acquisition.