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BP to buy BHP US shale assets for $10.5bn

Fri, 27th Jul 2018 07:05

(Sharecast News) - BP on Friday said it had agreed to buy BHP's US shale assets for $10.5bn.BP said it would pay the $10.5bn in two instalments with $5.25bn paid once the deal is completed and the rest in six cash payments over six months.Following completion, BP intends to make new divestments of $5bn - $6bn from its upstream assets to fund a share buyback programme.The company also unveiled a 2.5% rise in its second quarter dividend to 10.25c a share, its first increase since the third quarter 2014.BHP said the Eagle Ford, Haynesville and Permian fields comprised around 526,000 net acres producing oil, gas and natural gas liquids for sale in the US domestic market and internationally through the export of processed condensate. In the 2018 financial year these assets produced 58.8m barrels of oil equivalent.BP Upsteam chief executive Bernard Looney said the deal was "a major upgrade for one of BP's key Upstream regions, giving us some of the best acreage in some of the best basins in the onshore US"."This will increase our target for free cash flow from the Upstream by $1bn, to $14bn-$15bn in 2021, and provide opportunities for continuing growth well into the next decade," he said.The move is a significant one in the US for BP, which has been labouring under the $65bn cost of the 2010 Deepwater Horizon rig disaster in the Gulf of Mexico which killed 11 workers and devastated the local environment and economy. More than 200m gallons leaked from the well.For BHP, the sale marks an exit from assets it bought in 2011 and never really capitalised on before putting them on the market in August 2017.BHP chief executive Andrew Mackenzie, said the sale was consistent with its long-term plan "to continue to simplify and strengthen our portfolio to generate shareholder value and returns for decades to come"."With net debt currently toward the lower end of our target range of $10bn to $15bn...we expect to return the net proceeds from the transactions to shareholders. We will confirm how, and when, at the time of completion of the transactions."BHP said it expected to recognise an impairment charge of about $2.8bn post-tax (or approximately US$2.9 billion pre-tax) against the carrying value of its onshore US assets. The impairment charge will be recognised as an exceptional item in the results for the 2018 financial year, it added.Analysts at RBC saw the deal as more positive for BHP than BP as it was a higher sale price than the broker's $8bn estimate and an all-cash sale."For BP, although we see the merits of enhancing the company's position in the Haynesville and the Eagleford, we see greater potential synergies for other buyers in the Permian. Our main contention with BHP's Permian acreage is the checkerboard nature, limiting the ability to drill longer laterals and reduce cost.""We question whether further asset level deals are required in the play to shore up and increase concentration of acreage."
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24 Apr 2024 19:30

Trans Mountain oil shippers raise concerns about risk of delay to full service

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24 Apr 2024 13:24

Pressure on gas and LNG prices to help switch from coal, says J.P. Morgan

LONDON, April 24 (Reuters) - Global natural gas prices will come under pressure through the end of the decade as supply and shipping infrastructure grow rapidly, particularly in Qatar and the U.S., J.P. Morgan said in a report.

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24 Apr 2024 09:58

Aker BP Q1 beats forecast as costs fall, Tyrving to start sooner

OSLO, April 24 (Reuters) - Norwegian independent oil company Aker BP on Wednesday posted higher-than-expected net profit for the first quarter as costs fell, and said its Tyrving field development could start production sooner than previously planned.

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24 Apr 2024 05:38

Aker BP Q1 beats forecast on record output, lower cost

OSLO, April 24 (Reuters) - Norwegian independent oil company Aker BP on Wednesday posted a higher-than-expected net profit for the first quarter as production hit a record while costs fell.

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18 Apr 2024 14:45

BP's gas and renewables boss steps down, as CEO shrinks leadership

LONDON, April 18 (Reuters) - BP said on Thursday its head of natural gas and low carbon energy Anja-Isabel Dotzenrath will step down after just over two years, while CEO Murray Auchincloss announced plans to simplify its management structure.

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18 Apr 2024 14:12

UK shareholder meetings calendar - next 7 days

Friday 19 April 
Murray International Trust PLCAGM
Quantum Exponential Group PLCGM re delisting or potential investment in company
Monday 22 April 
Renalytix PLCGM
Travis Perkins PLCAGM
Tuesday 23 April 
AIQ LtdAGM
NatWest Group PLCAGM
Taylor Wimpey PLCAGM
Wednesday 24 April 
abrdn PLCAGM
abrdn Equity Income Trust PLCAGM
AssetCo PLCAGM
Breedon Group PLCAGM
British American Tobacco PLCAGM
Bunzl PLCAGM
Coro Energy PLCAGM
Croda International PLCAGM
Entain PLCAGM
Greencoat UK Wind PLCAGM
Primary Health Properties PLCAGM
Serco Group PLCAGM
Synectics PLCAGM
Thursday 25 April 
AFC Energy PLCAGM
Admiral Group PLCAGM
Beazley PLCAGM
BP PLCAGM
CLS Holdings PLCAGM
CRH PLCAGM
Dalata Hotel Group PLCAGM
Develop North PLCAGM
Drax Group PLCAGM
Everest Global PLCAGM
Greencoat Renewables PLCAGM
Hammerson PLCAGM
Helios Towers PLCAGM
Hikma Pharmaceuticals PLCAGM
International Biotechnology Trust PLCAGM
London Stock Exchange Group PLCAGM
Manx Financial Group PLCAGM
Mattioli Woods PLCGM re Pollen Street Capital Ltd takeover
Persimmon PLCAGM
Premier Miton Global Renewables Trust PLCAGM
Relx PLCAGM
Schroders PLCAGM
Smithson Investment Trust PLCAGM
Tissue Regenix Group PLCAGM
Weir Group PLCAGM
  
Comments and questions to newsroom@alliancenews.com
  
A full 21-day events calendar is provided each day with a subscription to Alliance News UK Professional.
  
Copyright 2024 Alliance News Ltd. All Rights Reserved.

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(Alliance News) - Stock prices in London were higher on Thursday afternoon, despite the prospect of higher for longer US interest rates hanging over stocks.

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18 Apr 2024 09:04

IN BRIEF: BP trims executive team in operational restructuring

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18 Apr 2024 08:11

BP cuts size of executive team, shakes up structure

(Sharecast News) - BP has trimmed its executive team as part of a shake-up of its organisational structure, it was confirmed on Thursday.

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17 Apr 2024 18:58

Shell urges investors to reject shareholder group's climate demands

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17 Apr 2024 17:36

Sustainable Finance Newsletter - Republican AGs look to limit climate groups

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17 Apr 2024 13:55

Shell urges investors to reject shareholder group's climate demands

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17 Apr 2024 10:38

Carbon Done Right advances Sierra Leone rewilding project

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15 Apr 2024 17:10

LONDON MARKET CLOSE: Investors show nerves after Iran launches drones

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