BP (NYSE: BP) announced that it has agreed to sell its interests in the Jonah and Pinedale upstream operations in Wyoming to LINN Energy, LLC (NASDAQ: LINE).
Under the agreement, LINN Energy has agreed to pay BP $1.025 billion in cash for the assets. Completion of the sale is subject to closing conditions including the receipt of all necessary governmental and regulatory approvals. The sale is currently expected to complete by July 31, 2012.
Bob Dudley, BP group chief executive, said: “This sale will allow us to realise the value of the mature Jonah assets and reinvest in higher growth opportunities in BP’s North America gas business and elsewhere. We are actively managing our portfolio of assets and businesses worldwide, focusing our investment on future growth in BP’s areas of strength.”
The agreement to sell the Jonah assets brings the total value of divestments that BP has agreed since the start of 2010 to around $24 billion. BP expects this total to increase to $38 billion by the end of 2013.
Under the agreement BP is selling its operations center in Sublette County, Wyoming, and all of its working interest in approximately 260 operated wells with recent net BP natural gas production of 80 million standard cubic feet equivalent of gas a day (mmscfe/d)], and non-operated wells with recent net BP production of 66 mmscfe/d. BP’s upstream production operations in Moxa and Wamsutter, Wyoming, are unaffected by the sale.
BP’s U.S. onshore upstream operations are an integral part of its business and the company continues to look at opportunities for growth over the long-term. In March 2012 BP announced a new entry into a promising new liquids-rich basin through an agreement to lease over 80,000 acres of the Utica shale basin in Ohio.
BP’s North America Gas business has a high quality portfolio of assets with a presence in seven of the leading gas basins in the U.S. Lower 48 states. In 2011, BP produced over 1,800 mmscf/d natural gas in the U.S.
“BP has invested $52 billion in the U.S. over the past five years, more than any other oil and gas company. In fact, we invest more in the U.S. than anywhere else in the world,” Dudley added. “The continuing development of new energy resources in our U.S. gas business demonstrates our commitment to the nation’s economy and energy security.”