ConocoPhillips sheds San Juan Basin assets

ConocoPhillips on Thursday said it had bid farewell to its interest in the San Juan Basin, having reached an agreement with a Hilcorp Energy Company-owned affiliate.

ConocoPhillips will receive USD 2.7 billion in cash followed by a contingent payment that could push the transaction to USD 3 billion. The latter payment will be spread out over a period of six years, beginning on January 1, 2018.

Production from the New Mexico basin, which also straddles parts of Colorado, Utah and Arizona, last year averaged 124,000 boepd. More than two-thirds of that volume – 80% – was gas.

“Including our recently announced Canadian asset sales, we have line of sight to more than $16 billion of total considerations in 2017. These transactions will materially reduce our exposure to North American gas and achieve an immediate step change improvement in our balance sheet and cash margins, while accelerating our return of cash to shareholders,” ConocoPhillips’ chairman and CEO, Ryan Lance, said in a press release.