ConocoPhillips to sell San Juan Basin assets for up to $3bn

ConocoPhillips has agreed to sell its interests in the San Juan Basin to an affiliate of Hilcorp Energy Company for up to $3bn.

The price comprises $2.7bn in cash and a contingent payment of up to $300m, and the company said proceeds from the deal will be used for general corporate purposes.

Chairman and chief executive officer Ryan Lance said: "This transaction significantly accelerates value from our San Juan Basin assets.

"Including our recently announced Canadian asset sales, we have line of sight to more than $16bn 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. Our company will be more focused, far stronger financially, and well positioned to execute our disciplined, returns-focused value proposition.”

Full-year 2016 production associated with the assets was 124,000 barrels of oil equivalent per day, of which around 80% was natural gas. Cash provided by operating activities for 2016 was approximately $0.2bn and year-end proved reserves were 0.6bn barrels of oil equivalent.

The company expects to record a non-cash impairment on the assets in the second quarter of 2017.

At 1240 BST, the shares were down 0.1% in pre-market trade to $49.37.