Following its $10.5 billion acquisition of U.S. oil and gas assets from BHP Billiton Group at the end of October, London-based major BP PLC reportedly launched the sale of about $3 billion of its legacy U.S. assets to help pay for the purchase, Reuters reported Dec. 19, citing sources familiar with the deal.
BP is putting up for sale blocks it held before the BHP deal in the Wamsutter basin in Wyoming, the Arkoma and Anadarko basins in Oklahoma, and the San Juan Basin at the Colorado-New Mexico border. Interested parties include Carlyle and Warburg Pincus, Reuters said.
Company executives had said BP was planning a $5 billion to $6 billion divestment program to help finance the BHP acquisition and help boost pretax cash flow toward a target of $14 billion to $15 billion.
Before the BHP deal, BP's U.S. onshore oil and gas business produced about 315,000 barrels of oil equivalent per day from seven basins in five states.
The BHP acquisition added oil and gas production of 190,000 boe/d and 4.6 billion barrels of discovered resources in the Permian and Eagle Ford basins in Texas and the Haynesville Shale in East Texas and Louisiana. With the closing of the deal, BP's Lower 48 business changed its name to BPX Energy.
Unlike many of its peers who in the last few years placed heavy bets on rising output and lucrative returns and dumped billions into shale investment, in 2010, BP sold off most of its Permian Basin assets to help offset the costs of damages related to the Deepwater Horizon oil spill in the Gulf of Mexico.
In its monthly Drilling Productivity Report, the U.S. Energy Information Administration said it expects oil production from the Permian Basin in December will top 3.7 MMbbl/d, with output likely to exceed 3.8 MMbbl/d in January 2019 for the first time ever.
After the planned asset divestitures, total 2021 production from BPX is expected to reach 500,000 boe/d.