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WPX sells last of San Juan Basin assets to focus on development in Permian, Williston basins
$700M sale to undisclosed third party should close in March
FARMINGTON — WPX Energy, Inc. has moved out of the San Juan Basin.
The Tulsa, Oklahoma-based oil and gas company announced the sale of the last of its Four Corners assets to the tune of $700 million on Feb. 5. WPX sold its holdings in the Gallup oil play to an undisclosed third party in a transaction that is expected to close by the end of March, according to a press release.
The sale involves some 150 oil wells on approximately 100,000 acres, according to WPX spokesman Kelly Swan.
Swan said WPX has been shifting its focus and funneling its resources to its operations in the Permian Basin of southeast New Mexico and west Texas and in the Williston Basin of North Dakota over the past few years.
“Essentially, what we had done as company is we we’re putting more money in the other two basins, just in terms of active development and having rigs on the ground, so the decision was made basically to focus capital in those two areas, so that essentially then frees up that capital to flow to those areas where we’re a little more active,” Swan said.
The exit from the San Juan Basin will mean WPX only operates in those two basins.
“WPX is now completely focused on our outstanding assets in the top two oil-prone basins in the North America — the Permian’s Delaware Basin and North Dakota’s Williston Basin,” WPX Chairman and CEO Rick Muncrief said in a press release.
WPX has more than 50 years’ and 10 years’ worth of acquisitions and development in the Permian and Williston basins, respectively, Swan said.
WPX’s Aztec office has approximately 40 employees remaining after the company sold its natural gas assets in the San Juan Basin to Farmington-based Logos Resources II, LLC in December. Swan said WPX’s employees “should all have the opportunity to transition” to working for the incoming company.
WPX leaves San Juan Basin after 35 years in business in the Four Corners region, according to its website. WPX began natural gas operations under the Williams umbrella in the San Juan Basin in 1983.
The company discovered oil in the its southern San Juan Basin holdings in 2013, a year after it split from Williams and shifted its focus from natural gas to oil, Swan said.
“In 2013, based on geology, we drilled a couple of test wells for oil in southern end of the play, and we had good producing wells, so that kind of created a new dimension to our business in the San Juan Basin. We’ve been really pleased with the progress there,” Swan said, adding that the assets “are very good wells, and in terms of the returns they make, it competes with our other areas. We just have more inventory at our other areas.”
WPX also sold 134,000 acres and approximately 900 natural gas wells to Logos Resources in December, marking the beginning of the end of its tenure in the San Juan Basin.
Muncrief said he wrestled with the decision to move out of the basin after decades of operations and community involvement and investment in the Four Corners.
“Selling is certainly difficult,” Muncrief said in a post on WPX’s website. “It always is, especially with our friends and relationships in the basin. Personally, I went back and forth on whether to sell. The wrestling is a good thing. It reflects on the quality of what we have.”
In its time in working in the San Juan Basin, WPX has expanded its local staff and field office, invested $500 million in local drilling between 2015 and 2017, generated more than $200 million in state taxes in the last decade. It has also distributed $100 million in leasing and royalties to Navajo allottees since 2013 and more than $100,000 in local charitable giving in the last year, according to the website.
Megan Petersen covers business and education for The Daily Times. Reach her at 505-564-4621 or firstname.lastname@example.org.