BP plans to sell its assets in Colo.’s San Juan Basin
Company will open new Lower 48 business headquarters in Denver
BP has notified employees that it plans to sell its oil and gas assets in the San Juan Basin of southwest Colorado and northwest New Mexico to help finance its $10.5 billion acquisition of Australia-based BHP Billiton’s U.S. shale oil and gas resources.
A letter obtained by The Denver Post and sent to workers last week says BP intends to sell its assets in the San Juan Basin, the Anadarko Basin in the Oklahoma and Texas Panhandle and the Arkoma Basin in Oklahoma. The letter from Dave Lawler, CEO of BP’s Lower 48 onshore upstream business, said the company plans to divest $5 billion to $6 billion of predominantly up- stream assets to help cover the purchase from BHP.
BP spokesman Brett Clanton confirmed Monday that the letter was sent to employees. He said the company is just starting to evaluate its assets and declined to discuss specifics.
In the letter, Lawler said the process could take up to two years and “that a particular asset may be retained if we cannot obtain a price that we believe is adequate.”
The purchase from BHP will give BP extensive oil and gas production and resources in the Permian and Eagle Ford basins in Texas and in the Haynesville gas basin in Texas and Louisiana, the company said.
BP employs about 100 people in Colorado’s San Juan Basin, one of North America’s leading sources of coalbed methane gas. Last year, BP reported drilling a natural gas well in the Mancos formation of the basin that produced 12.9 million cubic feet of gas per day, the highest achieved by a well in that area in 14 years.
With about 1,350 wells, BP is the largest oil and gas operator in the Colorado portion of the San Juan Basin. Its area operations are based in Durango. The Durango Herald first reported on BP’s plans last week.
The company plans to open its new Lower 48 business headquarters in downtown Denver in September. About 200 people working in Houston, including Lawler, are relocating to Denver.