Data Suggest BPX Worth at Least $10B in BP Merger Carve-Out

New U.S. onshore M&A deal values suggest BP Plc’s shale properties could fetch at least $10 billion if carved out in a BP merger, according to a Hart Energy analysis.

The figure is on a flowing boe/d basis only.

The supermajor’s BPX Energy shale unit also has 1.5 Bboe of proved reserves, 0.8 million net developed acres among its total 1 million net acres and some 1,600 gross operated wells, BP reported in its annual 20-F filing with the U.S. Securities and Exchange Commission in March.

The Denver-based unit’s daily net production averaged 434,000 boe/d in 2024, it added.

A rumored merger suitor is Shell Plc. The international energy company exited the onshore U.S. E&P space in 2021 when selling its Permian Basin property, which was its last remaining Lower 48 onshore upstream asset, to ConocoPhillips for $9.5 billion.

In the U.S. upstream, Shell operates in the conventional, deepwater offshore instead, along with BP.

U.K.-based J.P. Morgan Securities analyst Matthew Lofting reported on May 27, “At [some] 400,000 boe/d and a BP target more than 650,000 boe/d by 2030, BPX would represent 8% of current total proforma production and 12% [in] 2030, suggesting the attractiveness of BPX to Shell—and any other potential suitors—would likely be an important input into any portfolio evaluation and [merger] due diligence process.”

Valuation analysis

BPX’s property is focused in Texas and Louisiana in the Permian Basin, Eagle Ford and Haynesville.

Arun Jayaram, a U.S.-based E&P analyst for J.P. Morgan, reported May 27 that the year-to-date average price paid for Permian property is $36,573 per flowing boe/d, reduced by a lower oil price since January from a 2024 average of $43,767 per flowing boe/d.

In the Eagle Ford, which is also oily, deal values so far in 2025 have averaged $31,229 per flowing boe/d, down from $44,502 per flowing boe/d in 2024.

In the gassy Haynesville, deal values have improved from 2024 as the gas strip has grown to more than $4/Mcf from less than $3/Mcf.

Year-to-date values there have averaged $17,368 per flowing boe/d, according to the J.P. Morgan analysis, up from $12,933 last year.

In March in the Permian, BPX produced 66,989 bbl/d of oil and condensate and 494 MMcf/d of gas, according to Texas Railroad Commission (RRC) data, resulting in 149,322 boe/d on a 6:1 Mcf-to-bbl conversion.

The 2025 average price for Permian property suggests a $5.5 billion value on a flowing boe/d basis alone. BPX holds more than 75,000 net acres in the basin.

In March in the Eagle Ford where it holds more than 450,000 net acres, BPX produced 15,800 bbl/d of oil and condensate and 331 MMcf/d of gas, according to RRC data.

On a 6:1 basis, the combined 70,967 boe/d would produce a $2.2 billion bid at the year-to-date Eagle Ford average of $31,229 per flowing boe/d.

In the Haynesville where it holds more than 500,000 net acres, its combined production from both the Texas and Louisiana sides of the play was 877 MMcf/d, according to data from the RRC and ShaleXP.

On a 6:1 basis, the 146,167 boe/d would fetch $2.5 billion at the 2025 average price in the Haynesville area of $17,368 per flowing boe/d.

Could sell assets

Reuters reported in February that “BPX’s operating cash flow may have been as much as $3 billion in 2023, Citi estimated. On U.S. peers’ average 5x multiple, that is worth $15 billion.” 

Harold Hamm, founder and executive chairman of family-held Continental Resources, was asked at Hart Energy’s SUPER DUG Conference & Expo in mid-May if he would be interested in buying BP.

Hamm laughed, “I don't know if I could outbid Shell or not.”

Instead, he would be interested in any properties shed after a BP merger with another E&P, in particular the BPX unit, he said.

“A lot of times, when these acquisitions and mergers are made by big companies, they'll find themselves in a debt-limit situation and need to sell off different properties and make deals,” Hamm said.

Steve Trauber, chairman and global head of energy and clean technology, for M&A advisor Moelis & Co., told Hart Energy that, in addition to Shell, “any of the majors could take [BP] on because one of the things they would do is sell assets, right?

“And I think there are ways to be able to take that on and reduce debt: No. 1, through cost savings; No. 2, through asset divestitures.

“So yeah, I think both companies could take on the debt, but they would want to reduce debt I'm sure within a 12- to 24-month period.”

Shawn Holzhauser, BPX vice president of development, said at SUPER DUG in Fort Worth, Texas, that there was no “tea to spill” on whether BP and Shell are in talks.

“I think what's important to BPX is we've got great assets,” Holzhauser, “and we need to focus on those assets, delivering cashflow back to the business.

“That's our job. It's Murray’s [Auchincloss], our CEO's job to figure out how to deal with all those big players like Shell and Exxon.”