Photo: Image courtesy of BP

BP to buy BHP Billiton’s US onshore oil and gas assets

UK-based major BP has agreed to purchase BHP Billiton’s interest in the Eagle Ford, Haynesville, Permian and Fayetteville onshore US oil and gas assets for $10.8 billion.

Under the terms of the agreement, BP America Production Company will acquire from BHP Billiton Petroleum (North America) 100 percent of the issued share capital of Petrohawk Energy Corporation, BHP’s unit which holds the assets.

On completion, $5.25 billion, as adjusted, will be paid in cash from existing resources. $5.25 billion will be deferred and payable in cash in six equal installments over six months from the date of completion, BP said in its statement.

Commenting on the acquisition, BP’s chief executive, Bob Dudley said, “this is a transformational acquisition” for the company’s lower 48 business and a step towards delivering its upstream strategy.

Following completion of the acquisition, BP intends to make new divestments of $5-6 billion, predominantly from the upstream segment.

The proceeds are intended to fund a share buyback programme of up to $5-6 billion over time. The divestments will be in addition to BP’s ongoing programme of around $2-3 billion divestments a year.

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