Maybe Neil Sedaka said it best circa 1975 with his song “Breakin’ Up Is Hard to Do.”
Eight years after the song’s debut, WPX entered the San Juan Basin through an acquisition that brought us our very first natural gas wells.
That was obviously more than three decades ago. A few of those wells go back even further, pumping out natural gas for some 50 years.
That’s the kind of productivity this area is famous for. Don’t ever let anyone try to convince you otherwise. The San Juan Basin, pure and simple, is a prolific energy powerhouse.
That’s also why its bittersweet for WPX to part with those original natural gas operations that helped launch our company.
We recently agreed to sell those operations for $169 million, subject to typical closing conditions, as we continue to shift our business focus to oil.
The sale is expected to close before year-end. The Farmington Daily Times has a nice story about the transition process that’s underway as we speak.
Our office in Aztec will continue to run and develop our oil-focused operations in the southern part of the San Juan Basin where we made a discovery in 2013.
Most recently, those operations produced more than 10,000 barrels of oil per day in third-quarter 2017. Put another way, that’s more than 420,000 gallons of oil per day, or enough oil to fill-up roughly 23,000 cars and trucks per day.
Some of our current colleagues will be joining the purchasing company in the days ahead. That’s the really tough part. They’re more than co-workers. They’re good friends.
The purchasing company is excited about the potential to further develop the natural gas operations. That’s great news for the region and the economy since our investments at WPX have focused almost entirely on our oil development.
Having another party take over the natural gas operations is a means for bringing more money into the area. A representative for the purchaser was quoted in the Daily Times story as saying:
“This is going to be the most important thing to us as a company so we’ll be putting more capital to work (and) we’ll be putting more money there, which means more jobs.”
This transaction is just one in a series of more than a dozen deals WPX has made to sell natural gas operations to make further investments in oil.
Over the past few years, WPX also sold its natural gas operations in Texas, Wyoming, Colorado and Pennsylvania.