Name: BHP sells most of its onshore US assets to BP for US$10.5bn
Brand: Wood Mackenzie
SKU: 91136
Price: 1650 USD
Availability: OnlineOnly
Author: Wood Mackenzie

Deal Insight 07 August 2018

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Report summary

The long-anticipated sale of BHP's Lower 48 assets is now in the rear view mirror, executed on schedule as promised by the company. BP is paying US$10.5 billion for the Permian, Eagle Ford, and Haynesville assets. US$5.25 billion of the purchase price will be funded via cash on hand and the remaining US$5.25 billion will be paid in six equal instalments over the subsequent six months. The deal transforms BP's US Lower 48 business and redresses a lack of exposure to low breakeven tight oil. Though we believe BHP's remaining petroleum assets are a differentiating feature for the mining house, it must now consider whether to run these as a cash cow or re-invest for growth.

Executive summary
Transaction details
Upstream assets
Deal analysis
Upsides and risks
Strategic rationale
- BP
- BHP
- What does this mean for US tight oil consolidation?
Oil & gas pricing and assumptions

Tables and charts

This report includes the following images and tables:

Executive summary: Table 1BHP and offset operator Delaware Basin wellsBHP operated wells in the Eagle Ford

Upstream assets: Table 1Deal analysis: Table 1Deal analysis: Table 2Deal analysis: Table 3Oil & gas pricing and assumptions: Table 1Oil & gas pricing and assumptions: Table 2Majors' global productionMajors' US Lower 48 shale production (entitlement basis)