ConocoPhillips, the largest U.S. independent oil producer, said on Thursday it would sell natural gas-heavy assets in San Juan basin to privately held Hilcorp Energy Co for about $3 billion.
ConocoPhillips has been selling assets to reduce its exposure to profit-sapping natural gas assets and shore up its balance sheet.
The assets, which span New Mexico and Southwestern Colorado, produced 124,000 barrels of oil equivalent per day, about 80 percent of which was natural gas, ConocoPhillips (COP) said.
Conoco said last month it would sell oil sands and western Canadian natural gas assets to Cenovus Energy Inc for $13.3 billion.
Conoco will receive $2.7 billion in cash from the San Juan basin asset sale, which is expected to close in the third quarter.
The deal also includes a contingent payment of up to $300 million.
Conoco, which said the assets being sold had a book value of about $5.9 billion at 2016-end, expects to record an impairment charge in the second quarter.
Houston-based Hilcorp has a partnership with private equity firm Carlyle Group LP to acquire and develop North American oil and gas properties.
Reporting by Ahmed Farhatha