BP buys Blanco unit from Devon Energy
FARMINGTON — BP's Lower 48 Onshore oil and gas business has expanded its operations in the San Juan Basin for the first time in seven years.
The Houston-based company announced today that it has acquired all of Devon Energy's regional assets in the basin. The purchase price was not disclosed.
In a statement, BP Lower 48 Onshore CEO David Lawler reiterated his commitment to the company's investment in the San Juan Basin.
"This acquisition clearly demonstrates the importance of New Mexico and the San Juan Basin to our future,” Lawler said in the press release. “It’s also consistent with our strategy of selectively expanding in BP’s existing onshore basins, where we can link our innovative well design capability with our extensive subsurface expertise to generate industry leading capital efficiency.”
The acquisition, called the Northeast Blanco Unit, includes 480 natural gas wells spread across 33,000 gross acres in San Juan and Rio Arriba counties, according to the release.
BP spokeswoman Lisa Houghton said the acquisition elevates the company from a "minority" working interest in the wells to a "majority" operating ownership stake.
Pending approval, the sale means BP now has a majority, or 70 percent, working interest in the unit, Houghton said. There can only be one named operator of a well under permits from the state, she said. Prior to the sale, BP had a 40 percent non-operated working interest in the unit as one of several "minority" owners.
BP holds more than 550,000 net acres and produces approximately 100,000 barrels of oil equivalent each day in the San Juan Basin, according to the release.
The added assets will be folded into BP's west business unit. BP manages five onshore business units in the U.S., Houghton said.
Devon Energy spokesman John Porretto confirmed BP's purchase of the unit in an email. He declined to offer specifics about the sale.
Porretto said Devon Energy is still a leading operator in the oil-rich Delaware Basin in southeast New Mexico and West Texas.