US-based oil and natural gas exploration company Hilcorp Energy’s affiliate, Hilcorp San Juan, has completed the previously announced acquisition of ConocoPhillips’ San Juan Basin assets for a total value of $3bn.

The deal includes a cash payment of $2.7bn in cash, and contingent payments of up to $300m.

Through the acquisition, which comprises 1.3 million net acres, Hilcorp expects to increase its position in the San Juan Basin.

Hilcorp Energy president and chief development officer Jason Rebrook said: “With the acquisition now complete, Hilcorp can start doing the technical work required to increase production in New Mexico and Colorado, just as we’ve done in other areas of the country.”

“Throughout this entire process, we’ve identified significant potential remaining in the base assets as well as in the Mancos Shale.”

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The company intends to stabilise the production from the acquired assets, which currently produce about 120,000 barrels of oil equivalent a day.

It noted that workover rigs will be moved to the San Juan Basin in the near-term to begin working on existing wells.

"Completion of the sale of our San Juan Basin assets is a key milestone in the continuing high-grading of our portfolio."

ConocoPhillips chairman and CEO Ryan Lance said: “Completion of the sale of our San Juan Basin assets is a key milestone in the continuing high-grading of our portfolio.”

“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.”

The current asset sale is part of ConocoPhillips’ divestment strategy of downsizing its assets and operations in order to improve its financial position.

ConocoPhillips expects $16bn of dispositions during this year.

Image: San Juan Basin, New Mexico. Photo: courtesy of ConocoPhillips Company.