BHP Agrees to Sell US Onshore Assets for $10.8bn

Global resources company BHP has agreed to the sale of its entire interests in the Eagle Ford, Haynesville, Permian and Fayetteville Onshore US oil and gas assets for a combined base consideration of $10.8 billion.

BP American Production Company, a wholly owned subsidiary of BP plc, has agreed to acquire 100 percent of the issued share capital of Petrohawk Energy Corporation, the BHP subsidiary which holds the Eagle Ford, Haynesville and Permian assets, for a consideration of $10.5 billion.

MMGJ Hugoton III, LLC, a company owned by Merit Energy Company, has agreed to acquire 100 percent of the issued share capital of BHP Billiton Petroleum (Arkansas) Inc and 100 percent of the membership interests in BHP Billiton Petroleum (Fayetteville) LLC, which hold the Fayetteville assets, for a total consideration of $300 million.

Both sales are subject to the satisfaction of customary regulatory approvals and conditions precedent, and are expected to be completed by the end of October 2018.

BHP chief executive Officer, Andrew Mackenzie, said: “Our priority with this transaction is to maximise value and returns to shareholders. In August 2017, we confirmed that we would seek to exit our US shale assets for value. Following a robust and competitive process, we have delivered on that commitment. We are pleased that we have agreed to sell all of our shale assets in two simple transactions that provide certainty for shareholders and our employees.

“The sale of our Onshore US assets is consistent with our long-term plan to continue to simplify and strengthen our portfolio to generate shareholder value and returns for decades to come.

“With net debt currently toward the lower end of our target range of US$10 to US$15 billion, and consistent with our Capital Allocation Framework, we expect to return the net proceeds from the transactions to shareholders.  We will confirm how, and when, at the time of completion of the transactions.”