BP closes $10.5bn BHP US onshore assets acquisition

BP has concluded the acquisition of Australian company BHP’s unconventional onshore assets in the US for $10.5bn to boost its US onshore oil and gas portfolio, as well as pursue long-term growth.

BP signed the agreement for the acquisition of BHP’s assets in July in a deal that is set to give the company a significant position in the liquids-rich regions of the Permian and Eagle Ford basins in Texas, in addition to the Haynesville natural gas basin in East Texas and Louisiana.

The acquisition comprises oil and gas production of 190,000 barrels of oil equivalent per day (boe/d) and 4.6 billion barrels of oil equivalent of discovered resources.

UK-based BP expects the transaction to deliver more than $350m of annual pre-tax synergies and boost upstream pre-tax free cash flow by $1bn, increasing it to $14bn-15bn in 2021.

BP Upstream chief executive Bernard Looney said: “By every measure, this is a transformational deal for our Lower 48 business. It is an important step in our strategy of growing value in upstream and a world-class addition to BP’s global portfolio.

“We look forward now to safely integrating these great assets into our business and are excited about the potential they have for delivering growth well into the next decade.”

The company’s existing onshore oil and gas business in the US currently produces around 315,000boe/d with resources of 8.1 billion barrels of oil equivalent.

Meanwhile, BP has rechristened its Lower 48 business, which has operated as a separate entity since 2015, as BPX Energy. The ‘X’ in the new name represents the company’s focus on the exploration of new oil and gas resources.

BPX Energy CEO Dave Lawler said: “Our mission is to build an organisation imbued with a strong, inclusive, modern culture where everyone is respected, supported, and encouraged to achieve their highest potential and career aspirations; an organisation that leads the industry in the protection of people and the environment while simultaneously creating significant value for BP’s shareholders.”

BP’s profits have also increased by more than two times in the third quarter on account of stronger oil prices. The company posted an underlying replacement cost profit of $3.8bn.