Chevron plans to sell its San Juan Basin assets
The company employs about 35 people at its field office in Aztec, and those positions are expected to be eliminated after the assets are sold
- Chevron Corp. has put its San Juan Basin assets up for sale, including ones in northwest New Mexico.
- After assets are sold, the jobs of 35 people at Chevron's field office in Aztec will be eliminated.
- Chevron plans to ramp up production in the Permian Basin in southeastern New Mexico and west Texas.
- Chevron joins a growing list of companies selling assets to pay debt due to low oil and gas prices.
FARMINGTON — Chevron Corp. has put its San Juan Basin assets up for sale.
Margaret Cooper, Chevron spokeswoman, said in an email that the company put some of its onshore holdings — including those in the San Juan Basin, as well as assets in Wyoming and Kansas — up for sale late last year.
"Chevron operates conventional oil and gas wells in the San Juan Basin ... (and) considers these assets valuable with growth potential," Cooper said. "We expect these assets can be attractive to other companies with complementary portfolios."
Cooper declined to disclose the production level or value of the company's San Juan Basin assets.
"We do not disclose estimated value, production, potential sales price or a sales time frame for any asset up for sale," Cooper said. "Chevron’s San Juan Basin holdings include assets in La Plata County, (Colo.), and northwest New Mexico. These assets are located on a checkerboard landscape that includes state and federal land, private property and tribal land, including Jicarilla Apache, Southern Ute and Navajo (Nation lands). The San Juan Basin assets do not compete for investment in the Chevron portfolio, but we believe they are likely to attract interest from another company with a complementary portfolio."
Chevron's decision to sell off assets is similar to what many companies — from giant corporations to smaller independents — are doing as they try to pay down debt during record low natural gas and crude oil prices on the commodities market.
John Watson, Chevron's chairman and CEO, said in a recent press release that the company is focused on trying to lower costs and save money.
"Our upstream business was impacted by a more than 35 percent decline in crude oil prices," Watson said in the release. "Our downstream operations continued to perform well, although overall industry conditions and margins this quarter were weaker than a year ago. Our efforts are focused on improving free cash flow.”
Watson said Chevron is focused on reducing spending and key projects, including ramping up production in the Permian Basin, which is in the southeastern corner of New Mexico and West Texas.
"Chevron regularly evaluates and prioritizes its portfolio, which can result in the sale of certain assets," Cooper said. "This process is consistent with Chevron’s ongoing efforts to align its portfolio of assets with overall long-term strategies."
In a follow-up email, Cooper said Chevron supports its San Juan Basin operations with approximately 35 people who work at a field office in Aztec.
Those jobs and Chevron's community investments will depart when the assets are sold, she said.
"Chevron has enjoyed many years in this region and has invested tens of thousands of dollars in the community for STEM education, higher education scholarships, food banks and health. We intend to remain active in the community until the assets sell."
Late last month, Chevron announced a first-quarter loss of $725 million for 2016, compared with earnings of $2.6 billion in the 2015 first quarter.
James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621.