Independent oil and gas producer WPX Energy has closed a $700 million deal to sell its holdings in the San Juan Basin’s Gallup oil play to privately-held, EnCap Investments portfolio company, Enduring Resources IV.
The transaction completes WPX’s exit from the San Juan Basin, as it focuses operations on the Delaware (Permian) and Williston basins, Kallanish Energy reports.
“Our path forward is clear and compelling. It’s about consistent execution, sticking with our multi-year plan and continuing to create value by looking ahead,” said Rick Muncrief, chairman and CEO of Tulsa, Okla.-based WPX.
WPX’s production is now roughly 80% liquids (oil and natural gas liquids) and 20% natural gas. Five years ago, it was the opposite, at 80% gas and 20% liquids. WPX has transformed its portfolio through nearly $8 billion of transactions.
A significant portion of the proceeds from this most recent sale is slated for debt reduction. WPX now believes it can reduce its net debt/EBITDAX (earnings before interest, taxes, depreciation, amortization, and exploration expenses) to a target level of 1.5x during 2019.
CIBC Griffis & Small provided advisory services to WPX for the transaction. Holland & Hart LLP served as WPX’s external legal counsel.