WPX Energy sells San Juan Basin gathering system for $309 million

WPX Energy has a net debt of $3.2 billion consisting of $3 billion in notes, remainder primarily in revolver borrowings

Rick Muncrief, WPX president and chief executive officer

WPX Energy says it has completed the previously announced sale of its San Juan Basin gathering system for approximately $309 million.

The San Juan is located in the Four Corners region of northwestern New Mexico, southwest Colorado, and parts of Arizona and Utah.

WPX received $285 million cash subject to closing adjustments and a commitment by the purchaser estimated at $24 million to expand the system to support WPX’s development in the basin’s Gallup oil play.

WPX has rapidly grown its footprint in the Gallup oil play to approximately 100,000 acres. Year-over-year, WPX increased Gallup oil volumes by 128 per cent in 2015 to an average of 8,900 barrels per day.

Upon closing, the gathering system will consist of more than 220 miles of oil, gas, and water gathering lines that WPX installed in conjunction with its drilling in the Gallup oil play where it made a discovery in 2013.

The company also expects to complete the previously announced sale of its Piceance Basin subsidiary for $910 million in the second quarter.

“These actions provide us with flexibility to manage our balance sheet, enhance our liquidity and develop the world-class resources we have in our portfolio,” said Rick Muncrief, WPX president and chief executive officer.

Currently, WPX has net debt of $3.2 billion consisting of $3 billion in notes and the remainder primarily in revolver borrowings.

WPX is an oil-focused energy company with operations in the Permian’s Delaware Basin, the Williston Basin and the San Juan Basin.

The company reshaped its holdings through more than $5 billion of transactions and posted double-digit oil volume growth in each of the past four years.