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(Adds Hilcorp comment)
April 27 (Reuters) - BP said on Monday it had amended
financial terms of the $5.6 billion sale of its Alaska business
to privately held Hilcorp Energy Co following the recent slump
in oil prices, which may lead to a lower cash boost than
initially planned.
The new agreement retains the original sale price but
provides for vendor financing, smaller payments in 2020 and for
cash flow sharing in the near-term, the British oil major said.
The new structure is, however, expected to maintain "the
majority of the value of the transaction," BP said in its
statement.
Details on timing of the payouts or amounts of the financing
were not disclosed. BP is scheduled to release first-quarter
results on Tuesday and could provide additional details, a
spokeswoman said.
BP shares were up a fraction at $23.47 Monday morning.
Hilcorp declined comment on new terms including BP-provided
financing on the deal.
"In the weeks ahead, we will continue to work with BP, the
State of Alaska, and others to ensure a seamless transition
process as we complete this transaction," said Hilcorp President
Jason Rebrook in a statement.
The original agreement provided for Hilcorp to pay $4
billion this year and another $1.6 billion through an earnout
over time. Hilcorp paid a $500 million deposit on signing of the
transaction in 2019, BP said.
The company still expects to complete the deal in mid-2020.
U.S. crude oil futures fell into negative territory last
week for the first time in history, dragged down by a supply
glut and sagging demand for crude due to the coronavirus
pandemic. U.S. oil futures were trading at $12.28 a barrel on
Tuesday.
BP agreed to sell all its Alaskan properties, including
interests in the most prolific oil field in U.S. history at
Prudhoe Bay and the 800-mile (1,300-km) Trans Alaska Pipeline,
to Hilcorp last year, exiting a region where it operated for 60
years.
(Reporting by Tanishaa Nadkar in Bengaluru, Ron Bousso in
London and Gary McWilliams in Houston; Editing by Sriraj
Kalluvila, Kirsten Donovan and Steve Orlofsky)
