Oil company BP PLC, working with Morgan Stanley, is considering an acquisition of some of BHP Billiton Ltd.’s energy assets, Bloomberg reports, citing unnamed sources.
BHP is selling 800,000 net acres in the Eagle Ford, Permian, Haynseville and Fayetteville Basins it has said are worth at least $10 billion. It is preparing to sell those assets in up to seven packages, including three in highly-prized Permian, people familiar with the matter said this month. It’s not clear which of those assets BP wants to buy.
Data rooms are open and bids are due by June, the Melbourne, Australia-based mining company said last month. It could announce one or more transactions by the end of December. BHP said it’s also evaluating asset swaps, an initial public offering or potentially spinning off the division.
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UPDATE: BHP, formerly known as BHP Billiton, is the trading entity of BHP Group Limited and BHP Group plc, an Anglo-Australian multinational mining, metals and petroleum dual-listed public company headquartered in Melbourne, Victoria, Australia.
Founded in 1885 in the isolated mining town of Broken Hill in New South Wales, by 2017 BHP ranked as the world’s largest mining company, based on market capitalization, and as Melbourne’s third-largest company by revenue, which “almost tripled between 2004 and 2012.”
The sale to BP ended a disastrous seven-year foray by BHP into shale on which the company effectively blew up $19 billion of shareholders’ funds.
BHP first acquired shale assets in 2011 for more than $20 billion with the takeover of Petrohawk Energy and shale gas interests from Chesapeake Energy Corp at the peak of the oil boom. It spent a further $20 billion developing the assets but suffered as gas and oil prices collapsed, triggering massive writedowns.
The world’s biggest miner said it would record a further one-off shale charge of about $2.8 billion post-tax in its 2018 financial year results.