In a move that will upgrade and materially reposition its US onshore oil and gas business, BP has agreed to acquire a portfolio of world-class unconventional oil and gas assets from BHP. 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 $10.5 billion, subject to customary adjustments.
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 instalments over six months from the date of completion. BP intends to finance this deferred consideration through equity issued over the duration of the instalments. Subject to regulatory approvals, the transaction is anticipated to complete by the end of October 2018.
Bob Dudley, BP group chief executive, said:
This is a transformational acquisition for our Lower 48 business, a major step in delivering our Upstream strategy and a world-class addition to BPs distinctive portfolio. Given our confidence in BPs future further bolstered by additional earnings and cash flow from this deal we are increasing the dividend, reflecting our long-standing commitment to growing distributions to shareholders.