Contango Oil & Gas Co. agreed on July 8 to acquire ConocoPhillips Co.’s Wind River Basin asset in Wyoming in a $67 million cash deal.

For ConocoPhillips, the transaction fits into its plan to divest up to $10 billion of noncore assets over the next two years following its multibillion-dollar purchase of Concho Resources. Meanwhile, the deal for Contango follows a merger agreement last month with Independence Energy LLC, built and managed by KKR’s Energy Real Assets team, to become KKR’s primary platform for pursuing upstream oil and gas opportunities.

“Our previously announced merger with Independence was designed to accelerate our acquisition pace rather than slow it down, and this transaction is a perfect example of that,” commented Contango CEO Wilkie S. Colyer in a July 8 company release.

Even prior to its merger agreement with Independence, Contango had set out to become a consolidator of conventional, low decline oil and gas assets in the U.S., which the ConocoPhillips assets fit into, Coyler noted.

“This is a huge, conventional gas field with low decline, purchased at an attractive valuation,” he said.

ConocoPhillips’ Wind River Basin asset is comprised of low decline, conventional gas assets in Wyoming with a net production run rate, as of July 1, of approximately 78 MMcfe/d—roughly 100% gas.

According to ConocoPhillips, its Wind River Basin operations area consists of the Madden Field and Lost Cabin Gas Plant located in the Wind River Deep Unit, which covers approximately 44,000 net acres in Wyoming’s Fremont and Natrona counties. Natural gas operations are from multiple horizons ranging in depth from 5,000 ft to 26,000 ft, including the Lower Fort Union, Mesaverde, Lance, Cody and Madison formations.

Contango expects the acquisition of ConocoPhillips’ Wind River Basin asset to increase its run rate production by bout 57% in the third quarter, when the transaction is expected to close.

The assets are also located in an area where Contango has recently made several acquisitions including its merger with Mid-Con Energy Partners LP and a $58 million purchase of a package of oily, low-decline assets known as Project Silvertip, both of which closed earlier this year.

“We are intimately familiar with the area via assets acquired in the MCEP and Silvertip transactions, and we have the right team to maximize the value of these mature, low decline, and conventional properties,” Coyler added in his statement.

Contango intends to fund the ConocoPhillips transaction with cash on hand and availability under its existing revolving credit facility, the company release said.

Lazard is financial adviser to Contango for the transaction and Skadden, Arps, Slate, Meagher & Flom LLP is its legal adviser.

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