The Strategist

BP sells assets in Alaska to Hilcorp Energy for $ 5.6 bln

08/28/2019 - 11:23

British oil giant BP Plc has reached an agreement to sell its assets in Alaska to Hilcorp Energy Co for $ 5.6 bln, Reuters writes.

Thus, BP is leaving the region where the company has been operating for sixty years. In particular, BP is selling a stake in the Prudhoe Bay oil field and a part of Trans Alaska Pipeline .

Under the deal, Hilcorp Energy Co will make an initial payment to BP in the amount of $ 4 billion and eventually pay the remaining $ 1.6 bln.

The deal is part of BP’s plan to get $ 10 bln in the following years by selling assets to add up to its balance sheet.

To date, more than 13 billion barrels of oil have been produced at the field of Prudhoe Bay. Estimates of the potential of the field show that it can produce more than 1 billion barrels.

BP’s net oil production in Alaska is expected to average nearly 74 thousand barrels per day in 2019.

The deal is in line with Hilcorp’s historic strategy of acquiring mature fields from large oil companies and reducing costs. “This deal allows Hilcorp to be Alaska's second-largest producer and stockholder, second only to ConocoPhillips,” said Rowena Gunn, an analyst with Wood Mackenzie.