BP has agreed to acquire a portfolio of world-class unconventional oil and gas assets from BHP, in a move that will upgrade and materially reposition its U.S. onshore oil and gas business.
The acquisition will bring BP extensive oil and gas production and resources in the liquids-rich regions of the Permian and Eagle Ford basins in Texas and in the Haynesville gas basin in Texas and Louisiana.
Under the terms of the agreement, BP America Production Company will acquire from BHP Billiton Petroleum (North America) Inc. 100% of the issued share capital of Petrohawk Energy Corporation – the wholly-owned subsidiary of BHP which holds the assets – for a total consideration of $10.5bn, subject to customary adjustments.
Following completion of the acquisition, BP intends to make new divestments of $5-6bn, predominantly from the Upstream segment. The proceeds are intended to fund a share buyback programme of up to $5-6bn over time. The divestments will be in addition to BP’s ongoing programme of around $2-3 billion divestments a year.
BP has agreed to acquire assets with 470,000 net acres of licences, including a new position for BP in the liquids-rich Permian-Delaware basin, and two premium positions in the Eagle Ford and Haynesville basins. The assets have combined current production of 190,000 barrels of oil equivalent per day (boe/d), about 45% of which is liquid hydrocarbons, and 4.6 billion barrels of oil equivalent (boe) resources.
BP’s existing U.S. onshore oil and gas business currently produces around 315,000 boe/d from operations across seven oil and gas basins in five states with resources of 8.1 billion boe. Since BP established it as a separate business organisation with new management four years ago, it has grown production and improved capital efficiency, with unit production costs reduced by 34% since 2013.
For more information, visit: www.bp.com
30th July 2018
