ConocoPhillips Continues Asset Selloff with San Juan Basin Deal

Researched by Industrial Info Resources (Sugar Land, Texas)--With the announced plan to sell its production-related interests in the San Juan Basin for $3 billion to an affiliate of Hilcorp Energy Company (Houston, Texas), ConocoPhillips (NYSE: COP) (Houston, Texas) continues its drive to sell off assets to improve its balance sheet.

"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," said ConocoPhillips Chief Executive Officer Ryan Lance in a press statement on Wednesday. ConocoPhillips recently sold its Canadian oil sands interests as well as conventional assets in Canada to Cenovus Energy Incorporated (NYSE:CVE) (Calgary, Alberta) for $13.5 billion. For related information, see April 10, 2017, article - Cenovus Closer to Taking Top Spot in Canadian Thermal Production as Deal with ConocoPhillips Progresses.

The San Juan Basin is located near the Four Corners region of the Southwestern U.S. Full-year 2016 production associated with the San Juan Basin assets was 124 thousand barrels of oil equivalent per day, of which 80% was natural gas, according to ConocoPhillips. Cash provided by operating activities for 2016 was $0.2 billion. Year-end 2016 proved reserves were 0.6 billion barrels of oil equivalent.

Industrial Info is tracking a $15 million major turbine overhaul at ConocoPhillips' San Juan Basin Natural Gas Processing Plant, located near Bloomfield, New Mexico. The project will kick off in November this year, with expected completion by the end of the year. For more information, see Industrial Info's project report.

Industrial Info is also tracking nearly $3 billion in project activity by privately-held Hilcorp. This includes the $2 billon grassroot Liberty Oil & Gas Production & Processing Plant at Prudhoe Bay, Alaska. The project comprises construction of a 9.4-acre gravel reinforced production island 5.9 miles offshore from the North Slope, with gas processing capacity of 140 million standard cubic feet per day and crude oil processing capacity of 70,000 barrels per day. Construction would kick off in 2019, with completion in 2024. However, kick-off slippage for the project so far has been 112 months. For more information, see Industrial Info's project report.

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