ConocoPhillips has completed its previously announced transaction with an affiliate of Hilcorp Energy Company to sell its San Juan Basin assets for up to USD3.0 billion of total consideration, comprised of USD2.7 billion in cash and contingent payments of up to USD300 million.
According to an official statement fro ConocoPhillips, After customary closing adjustments, the cash proceeds were USD2.5 billion. The contingent payments portion is effective from Jan. 1, 2018, and has a term of six years. Proceeds from this transaction will be used for general corporate purposes.
“Completion of the sale of our San Juan Basin assets is a key milestone in the continuing high-grading of our portfolio,” said Ryan Lance, ConocoPhillips chairman and chief executive officer. “We believe the proceeds from this transaction along with our other dispositions are strengthening our balance sheet and allowing us to deliver on our value proposition.”
As of June 30, 2017, the net book value of the San Juan Basin assets was approximately USD2.5 billion. The company’s 2017 guidance already reflects the impacts of the sale.
“With the acquisition now complete, Hilcorp can start doing the technical work required to increase production in New Mexico and Colorado, just as we’ve done in other areas of the country,” said Jason Rebrook, President and Chief Development Officer. “Throughout this entire process, we’ve identified significant potential remaining in the base assets as well as in the Mancos Shale.”
“Hilcorp sees decades of future production and development in the basin. We are excited for the opportunity to enhance oil and natural gas production in the Four Corners Region, and we expect to become responsible members of the local community by boosting economic activity and developing strong, long-lasting partnerships,” said Greg Lalicker, President and Chief Operations Officer.
ConocoPhillips is one of the world’s largest independent E&P company based on production and proved reserves. Headquartered in Houston, Texas, ConocoPhillips had operations and activities in 17 countries, USD78 billion of total assets, and approximately 12,200 employees as of June 30, 2017. Production excluding Libya averaged 1,503 MBOED for the six months ended June 30, 2017, and proved reserves were 6.4 billion BOE as of Dec. 31, 2016.