BP has continued its assets sale drive with the divestment of a pair of upstream operations in the US to Linn Energy.
Nasdaq-listed Linn is stumping up $1.025 billion in an all-cash deal for the British supermajor’s interests in the Jonah and Pinedale plays in the Green River basin, Wyoming.
The sale includes around 260 operated wells with recent net gas production to BP of 80 million cubic feet equivalent per day. There are also non-operated wells with almost the same net amount to BP.
“BP’s upstream production operations in Moxa and Wamsutter, Wyoming, are unaffected by the sale,” the oil giant said.
BP has been aggressively selling off assets in the wake of the April 2010 Deepwater Horizon disaster in the Gulf of Mexico which led to large payouts. The company said: “The agreement to sell the Jonah assets brings the total value of divestments that BP has agreed since the start of 2010 to around $24 billion. BP expects this total to increase to $38 billion by the end of 2013.”
Chief executive Bob Dudley continued: “This sale will allow us to realise the value of the mature Jonah assets and reinvest in higher growth opportunities in BP’s North America gas business and elsewhere.
“We are actively managing our portfolio of assets and businesses worldwide, focusing our investment on future growth in BP’s areas of strength.”
Despite the divestment, BP insisted that it was not exiting the US onshore market, contending: “BP’s US onshore upstream operations are an integral part of its business and the company continues to look at opportunities for growth over the long-term.
“In March 2012 BP announced a new entry into a promising new liquids-rich basin through an agreement to lease over 80,000 acres of the Utica shale basin in Ohio.
BP’s North America Gas business has a high quality portfolio of assets with a presence in seven of the leading gas basins in the US Lower 48 states. In 2011, BP produced over 1,800 mmscf/d natural gas in the US.
Dudley argued: “BP has invested $52 billion in the US over the past five years, more than any other oil and gas company. In fact, we invest more in the US than anywhere else in the world.
“The continuing development of new energy resources in our US gas business demonstrates our commitment to the nation’s economy and energy security.”
Linn also confirmed the purchase with chairman, president and chief executive Mark Ellis saying: “This acquisition provides Linn with a significant operated position in the Green River Basin of Wyoming and the opportunity to add employees to our staff who have hands-on experience with operations in the Jonah Field.
“The long-life, low-decline characteristics of the Jonah Field make this asset an excellent fit for us. These properties are expected to provide approximately 145 million cubic feet equivalent per day of liquids-rich natural gas production.”
