Alaskan officials on June 29 approved BP Plc's sale of its oil and gas leases in the state to closely held Hilcorp Energy Co. as part of a previously announced $5.6 billion deal.
BP last year agreed to sell its Alaskan properties, including interests in the Prudhoe Bay oil field and its nearly 50% stake in the 800-mile (1,300-km) Trans Alaska Pipeline, to Texas-based Hilcorp.
The agreement was revised in April to extend the closing date and allow $1.6 billion to be paid from future earnings.
Officials in Alaska's departments of Natural Resources and Environmental Conservation ruled the sale of BP's 176 North Slope leases is good for the state.
"The transfer of these leases and facilities both protects and advances Alaska's interests," Natural Resources Commissioner Corri Feige said in a statement.
The sale involves "some risk and potential liability to the state," but its benefits outweigh the risks, commissioners wrote in a due-diligence memorandum.
The lease portion of the sale could be completed on June 30, said BP spokeswoman Megan Baldino.
Hilcorp did not reply to a request for comment.
Still pending is state approval of BP's near-half ownership in the Trans Alaska Pipeline System, which runs from Pruhoe Bay in the north to Valdez on Alaska's southern coast. A decision by the Regulatory Commission of Alaska is expected in September, officials said.
Hilcorp has a record of buying and rejuvenating aged fields while reducing expenses and can apply those skills to North Slope fields, the due-diligence memorandum said.
Alaska North Slope production peaked in 1988 at 2 million bbl/d. In part due to coronavirus-related reductions, June production averaged 390,830 bbl/d, with 286,098 bbl/d from Prudhoe Bay and satellite fields, according to state data.
Recommended Reading
Matador Bolts On Additional Interest from Advance Energy Partners
2024-02-27 - Matador Resources carved out additional mineral and royalty interests on the acreage it acquired from Advance Energy Partners for $1.6 billion last year.
APA Closes $4.5B Callon Deal, Deepening Permian Roots
2024-04-01 - About two-thirds of Apache’s daily production will come from the Permian Basin after APA Corp. completed its $4.5 billion takeout of Callon Petroleum.
Analysts: Diamondback-Endeavor Deal Creates New Permian Super Independent
2024-02-12 - The tie-up between Diamondback Energy and Endeavor Energy—two of the Permian’s top oil producers—is expected to create a new “super-independent” E&P with a market value north of $50 billion.
EIA: E&P Dealmaking Activity Soars to $234 Billion in ‘23
2024-03-19 - Oil and gas E&Ps spent a collective $234 billion on corporate M&A and asset acquisitions in 2023, the most in more than a decade, the U.S. Energy Information Administration reported.
Marketed: EnCore Permian Holdings 17 Asset Packages
2024-03-05 - EnCore Permian Holdings LP has retained EnergyNet for the sale of 17 asset packages available on EnergyNet's platform.