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BHP Billiton sells US onshore unconventional assets to BP

BP is to acquire BHP Billiton’s US onshore unconventional assets for $10.5bn, including some of the best-in-class tight oil acreage in the Eagle Ford and Permian basins in Texas, and shale gas assets in the Haynesville in Texas and Louisiana. The assets have combined current production of 190,000 boe/d, about 45% of which is liquid hydrocarbons, and 4.6bn boe of resources.

‘This is a transformational acquisition for our Lower 48 business, a major step in delivering our upstream strategy and a world-class addition to BP’s distinctive portfolio,’ said Bob Dudley, BP Group Chief Executive.

Commenting on the deal, Maxim Petrov, Senior Analyst, Wood Mackenzie, says: ‘The most valuable part of the package is BHP’s Eagle Ford position given its scale and attractive economics. But the Permian acreage offers the biggest longer-term upside, with some of the best break-evens in the play, well below $50/b Brent. Similarly, the Haynesville assets have some of the most attractive shale gas economics outside the Marcellus, and nicely compliment BP’s existing acreage in the play.

He continues: ‘BP was previously underweight to US tight oil compared to its peers. This deal transforms BP’s US business – it will immediately raise its US production by almost a fifth while providing competitive returns and volumes growth. We see BP’s combined US production hitting 1mn boe/d in 2020, with the potential to reach close to 1.4mn boe/d by 2025.’


News Item details


Journal title: Petroleum Review

Subjects: Economics, business and commerce, Oil, Oil production, Unconventional oil

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