ConocoPhillips announced it has entered into a definitive agreement to sell its interests in the San Juan Basin to an affiliate of Hilcorp Energy Company for up to $3.0 billion of total proceeds, comprised of $2.7 billion in cash and a contingent payment of up to $300 million. The cash portion of the proceeds is subject to customary closing adjustments. The contingent payment is effective beginning Jan. 1, 2018 and has a term of six years. Proceeds from this transaction will be used for general corporate purposes. Full-year 2016 production associated with the San Juan Basin assets was 124 thousand barrels of oil equivalent per day, of which approximately 80 percent was natural gas. Cash provided by operating activities for 2016 was approximately $0.2 billion. Year-end 2016 proved reserves were 0.6 billion barrels of oil equivalent.
Located in northwestern New Mexico and southwestern Colorado, the San Juan Basin has significant natural gas production. ConocoPhillips is the largest operator in the basin. The San Juan Gas Plant, located in Bloomfield, New Mexico, is operated and 50% owned by ConocoPhillips. It has a natural gas processing capacity of 550 MMCFD. (Source and image: ConocoPhillips – Production wells in San Juan Basin)