Houston-based ConocoPhillips announced a blockbuster sale of its interests in the San Juan basin for nearly $3 billion in cash and contingent funds, according to a company press release issued on Thursday.
The deal provides for $2.7 billion in cash and a contingent payment of nearly $300 million in exchange for the San Juan Basin assets which produced 124 thousand barrels of oil equivalent per day, of which about 80 percent was natural gas. The basin is found in northwestern New Mexico and southwestern Colorado.
ConocoPhillips has been divesting assets at a rapid pace lately. The San Juan deal comes on the heels of a $13 billion sale of the company’s heavy crude and gas operations in Canada to Calgary-based Cenovus Energy. OK Energy Today covered the divestiture to Cenovus on March 31.
ConocoPhillips is uncertain about layoffs impacting the company due to the San Juan basin sale. The company maintains a strong presence in Bartlesville, Oklahoma.
“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,” said Ryan Lance ConocoPhillips’ Chairman and Chief Executive Officer. “Our company will be more focused, far stronger financially, and well positioned to execute our disciplined, returns-focused value proposition.”