Release date: October 31, 2018
In a deal that will significantly upgrade BP’s U.S. onshore oil and gas portfolio and help drive long-term growth, the company has completed the $10.5 billion acquisition of BHP’s U.S. unconventional assets.
The acquisition, which closed on Oct. 31, adds 190,000 barrels of oil and gas production per day and 4.6 billion oil equivalent barrels of discovered resources in the liquids-rich regions of the Permian and Eagle Ford basins in Texas and in the Haynesville natural gas basin in East Texas and Louisiana.
“By every measure, this is a transformational deal for our Lower 48 business and for BP. It is an important step in our strategy of growing value in Upstream and a world-class addition to BP’s global portfolio,” said Bernard Looney, chief executive officer of BP’s global upstream business. “We look forward now to safely integrating these great assets into our business and are excited about the potential they have for delivering well into the next decade.”
Following integration, the transaction will be accretive to earnings, is estimated to generate more than $350 million of annual pre-tax synergies and is expected to boost Upstream pre-tax free cash flow by $1 billion, to $14-15 billion in 2021.
In addition to the close of the BHP transaction, BP’s Lower 48 announced it has changed its name to BPX Energy Inc.
The change marks a new era for BP’s U.S. onshore oil and gas unit, which has operated as a separate entity since 2015 and has achieved material improvements in operational and financial performance since then.
The “BP” portion of the name reflects that the unit remains a wholly-owned subsidiary of BP plc., and a critical and strategic business within BP’s upstream organization. The “X” stands for exploration -- both the search for new oil and gas resources as well as for new ideas and methods to fundamentally improve the business.
“We are exploring how to improve every aspect of our business,” said Dave Lawler, CEO of BPX Energy. “Our mission is to build an organization imbued with a strong, inclusive, modern culture where everyone is respected, supported, and encouraged to achieve their highest potential and career aspirations; an organization that leads the industry in the protection of people and the environment, while simultaneously creating significant value for BP’s shareholders.”