Hilcorp to acquire BP’s Alaska business in $5.6-billion deal

[thackney]

Hilcorp to acquire BP’s Alaska business in $5.6-billion deal
https://www.ogj.com/general-interest/companies/article/14038927/hilcorp-to-acquire-bps-alaska-business-in-56billion-deal
Aug 27th, 2019

Hillcorp Alaska, Anchorage, has entered into a deal to acquire the entirety of BP Alaska’s operations and interests for $5.6 billion.

Under the terms of the agreement, Hilcorp’s payment will comprise $4 billion payable near-term and $1.6 billion through an earnout thereafter. Subject to state and federal regulatory approval, the transaction is expected to be completed in 2020.

For BP, the transaction—which includes interests in giant Prudhoe Bay field and the Trans Alaska Pipeline System (TAPS)—adds to the progress towards the firm’s 2-year, $10-billion divestment program.

The sale includes BP’s entire upstream and midstream business in the state, including BP Exploration (Alaska) Inc., which owns all of BP’s upstream oil and gas interests in Alaska, and BP Pipelines (Alaska) Inc.’s interest in TAPS.

BP Group Chief Executive Bob Dudley, said the company is “reshaping” to focus on “other opportunities, both in the US and around the world, that are more closely aligned with our long-term strategy and more competitive for our investment.”...

[thackney]

https://www.chron.com/business/energy/article/Hilcorp-to-buy-BP-s-Alaska-assets-for-5-6B-14381877.php

...Hilcorp established a major Alaska presence in 2012 after buying Chevron's stakes in Alaska's Cook Inlet basin. Five years ago, Hilcorp bought interests from BP in four Alaska North Slope oilfields.

For BP, the decision is part of $10 billion divestment program as BP focuses in the United States on its growing positions in Texas shale and as the largest producer in the deepwater Gulf of Mexico. Last year, BP paid $10.5 billion for the Texas shale assets of the Australian mining firm BHP....

...Hilcorp, already the largest private operator in Alaska, will essentially double its production from 75,000 barrels of oil equivalent a day to nearly 150,000 barrels. Hilcorp has primarily focused on managing mature oil and gas assets in the state....

[Smokin Joe]

From: https://www.thestreet.com/markets/bp-marks-major-us-return-with-10-5-billion-shale-oil-purchase-from-bhp-billiton-14664425
About a year ago....

BP plc (BP - Get Report)  made one of its biggest investments in decades Friday with the $10.5 billion purchase of shale oil and gas assets from BHP Billiton (BHP)<snip> BHP has booked massive losses on its ill-fated foray into U.S. shale. The London and Australia-listed group paid about $20 billion for the assets just seven years ago and has spent almost as much developing the operations. The shale operations were an expensive legacy for BHP, accounting for $900 million of its total oil capital expenditure of $1.6 billion over year to the end of June, despite delivering just one-third of its total oil production of 86 million barrels and 40% of its total 636 billion cubic feet of gas.

Note that for most producers CAPEX remains high for ROI in shale plays, and in many cases, the depletion curve causes crossover.
Infrastructure limitations (takeaway capacity, gas processing, and regulations) limit the ability to produce out of that corner, especially with adequate supplies and low prices.

Right now, heavy, high sulfur crude is selling at a premium (like the crude from Venezuela) because of the lower supply to refineries setup to handle it

[IsailedawayfromFR]

From: https://www.thestreet.com/markets/bp-marks-major-us-return-with-10-5-billion-shale-oil-purchase-from-bhp-billiton-14664425
About a year ago....
Note that for most producers CAPEX remains high for ROI in shale plays, and in many cases, the depletion curve causes crossover.
Infrastructure limitations (takeaway capacity, gas processing, and regulations) limit the ability to produce out of that corner, especially with adequate supplies and low prices.

Right now, heavy, high sulfur crude is selling at a premium (like the crude from Venezuela) because of the lower supply to refineries setup to handle it

Actually, I look at it as the opposite:  Light crudes are selling at a discount.  Most refineries would prefer light crudes but they spent billions years ago to reconfigure in order to process heavy crudes as they strategized that light crude supply would dwindle over time.  They also figured due to mileage concerns that diesel transportation would predominate, and heavy crudes can be made easily into diesel.

What they did not account for was the light crudes coming on with the shale plays.  And diesel cars growth did not explode, primarily for environmental reasons.

[Applewood]

BP ending its six-decade business in Alaska

BP announced Tuesday it has ended business in Alaska after six decades and will be selling all its operations in the state to Hilcorp, Alaska's largest private oil operator, for $5.6 billion.

The sale encompasses all of BP’s existing pipelines and business interests in the state, including its stake in the Trans-Alaska Pipeline System.

BP CEO Bob Dudley said in a statement that “Alaska has been instrumental in BP's growth,” but the London-based company is looking toward other opportunities in the U.S. and abroad as it reshapes.

More at:

https://thehill.com/homenews/state-watch/459012-bp-ending-its-six-decade-business-in-alaska

[MOD8]

Merged topics

[Applewood]

Thanks @MOD8