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UK oil giant, BP has entered into an agreement to acquire onshore shale assets of BHP in $10.5 billion. The deal will add 190,000 b/d of oil equivalent to BP's production of 315, 000 boe/d from seven oil and gas basins. Considering the expected boost in cash flow, BP has augmented its upstream free cash flow target to $14 billion-$15 billion in 2021.
Sources have confirmed that the British oil major, BP Plc is reportedly leading the auction for the sale of BHP’s onshore shale assets in US. It was after the submission of the offer of over $10 billion that BP became a front-runner. BHP’s sale domain includes their $12 billion takeover of Petrohawk Energy in 2011 whose share value dropped down to $1.60 last year.
If sources were to be believed, BHP Billiton Ltd. has received first-round bids for its U.S. shale portfolio at around $7 billion to $9 billion, from BP Plc, Chevron Corp. BHP may hold a second-round bids in early July as the company prefers to sell the unit to a single party and is anticipating a deal as big as $13b. Shell is purposely interested in BHP’s Permian basin assets.