ConocoPhillips (NYSE: COP) today completed its previously announced transaction with an affiliate of Hilcorp Energy Company to sell its San Juan Basin assets for up to $3.0 billion of total consideration, comprised of $2.7 billion in cash and contingent payments of up to $300 million. After customary closing adjustments, the cash proceeds were $2.5 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 $2.5 billion. The company’s 2017 guidance already reflects the impacts of the sale.