BP snaps up US shale gas assets in €9bn deal

BP snaps up US shale gas assets in €9bn deal

By Kalyeena Makortoff

Oil giant BP is snapping up BHP Billiton US shale gas assets in a $10.5bn (€9bn) deal.

The move will see BP acquire BHP’s Petrohawk Energy subsidiary — which holds a raft of assets the oil firm is keen to take over.

BP said the deal will “upgrade and materially reposition” its US oil and gas business.

The company said it will pay $5.25bn in cash once the deal is completed, with the remaining half of the payment to be paid out over six instalments over the following half year.

The deal is expected to be completed by the end of October this year.

BP chief executive Bob Dudley said: “This is a transformational acquisition for our Lower 48 business, a major step in delivering our Upstream strategy and a world-class addition to BP’s distinctive portfolio.

“Given our confidence in BP’s future — further bolstered by additional earnings and cash flow from this deal — we are increasing the dividend, reflecting our long-standing commitment to growing distributions to shareholders.”

The dividend for the second quarter has been raised 2.5% to 10.25p per ordinary share and will be paid out in September.

BP added that it plans to offload $5-6bn worth of assets from its upstream operations once the deal is finalised, which will help fund a share buyback of the same size.

Those divestments will be on top of its ongoing programme that is targeting $2-3bn in divestments per year.

Fellow oil giant Shell earlier this week reported lower-than-expected second-quarter earnings despite rising 30% to $4.7bn.

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Wesley O’ Regan is the General Manager of Popscene in Voodoo Rooms, Cork city. Popscene opened last November and is Cork’s only themed bar that is dedicated to celebrating the best of the 80s and 90s. https://www.facebook.com/PopsceneCork/You've Been Served: Wesley O'Regan, Popscene

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