ConocoPhillips (NYSE: COP) agreed April 13 to the sale of its dry gas interests in the San Juan Basin to an affiliate of Hilcorp Energy Co. for up to $3 billion.

The deal comes roughly two weeks after ConocoPhillips’ $13.3 billion sale of Canadian oil sands assets to Cenovus Energy Inc. (NYSE: CVE). In total, ConocoPhillips has announced more than $16 billion of assets sales so far in 2017. Included in its deal price with Hilcorp are incentive payments of about $300 million.

In November, ConocoPhillips said it planned to divest assets of $5 billion to $8 billion to delever and core up its asset base by 2018, analysts said. With its two agreements, the company is on track to double its goal roughly four months into 2017.

The San Juan sell has previously been previously discussed by management said Scott Hanold, an analyst with RBC Capital Markets. The deal price is at the high range of RBC’s estimates.

“COP has now divested over $16 billion is assets this year, well above its three-year goal in under one year,” Hanold said. “We think the company will continue to maintain its priorities of dividend growth, debt reduction, and share repurchases. We expect the stock to react favorably.”

Immediately after ConocoPhillips said it would divest in Canada, for instance, the oil sands sale jumpstarted company stock, lifting it by nearly 9% and increasing the company’s value by roughly $5 billion.

“These transactions will materially reduce our exposure to North American gas and achieve an immediate step change improvement in our balance sheet and cash margins, while accelerating our return of cash to shareholders,” Ryan Lance, ConocoPhillips’ chairman and CEO, said in a statement. “Our company will be more focused, far stronger financially, and well positioned to execute our disciplined, returns-focused value proposition.”

ConocoPhillips’ San Juan Basin assets cover about 1.3 million acres in New Mexico and Colorado. Full-year 2016 production associated with the assets was 124,000 barrels of oil equivalent per day (boe/d), of which about 80% was natural gas. Cash provided by operating activities for 2016 was about $200 million. Year-end 2016 proved reserves were 600 MMboe.

Hilcorp said it estimates 2017 production from the San Juan assets could reach about 115,000 boe/d, consisting of about 80% natural gas and 20% NGL.ConocoPhillips San Juan Basin Assets Map

“The San Juan Basin acquisition fits the profile of the established, conventional assets [that] Hilcorp typically aims to secure and enhance,” Jason Rebrook, president and chief development officer of Hilcorp, said in a statement. “In the last five years alone, we have invested heavily in our properties, increasing both reserves and production.”

According to ConocoPhillips, the net book value of its San Juan assets was roughly $5.9 billion as of year-end 2016, which includes about $2.8 billion of step-up basis associated with the Burlington acquisition in 2006.

Sale proceeds are comprised of $2.7 billion in cash and contingent payments of up to $300 million spread over six years. The cash portion of the proceeds is subject to customary closing adjustments. The contingent payments are effective Jan. 1, 2018.

ConocoPhillips said it expects the transaction to close in third-quarter 2017, subject to specific conditions precedent being satisfied, including regulatory approval. The company also anticipates recording a non-cash impairment on the assets in the second quarter.

Hilcorp is headquartered in Houston and is one of the largest privately-held independent E&Ps, according to the company press release. Its affiliate, Hilcorp San Juan LP, is a partnership between the company and The Carlyle Group.

Wells Fargo Securities was ConocoPhillips' exclusive financial adviser on the transaction.

Emily Patsy can be reached at epatsy@hartenergy.com.