BP has confirmed its commitment to completing the sale of its Alaska (US) business to Hilcorp, first announced in August 2019. Subject to regulatory approvals, the parties expect to complete the transaction in June 2020.
Reflecting recent significant market volatility and oil price falls, BP and Hilcorp have successfully renegotiated the financial terms of the deal to respond to the current environment.
William Lin, BP Chief Operating Officer, Upstream regions, said: “We have worked closely with Hilcorp to reconfirm our commitment to completing this deal. The agreed revisions respond to market conditions while retaining the overall consideration. We look forward to progressing swiftly to completion and for Hilcorp to take over the operation of this important business. We are confident that completion of this sale is the right thing for both parties, for the business and for Alaska.”
Under the terms of the agreement, Hilcorp will pay BP a total consideration of $5.6 billion, comprising $4.0 billion payable near-term and $1.6 billion through an earnout thereafter. Subject to state and federal regulatory approval, the transaction is expected to be completed in 2020. The deal forms a significant part of BP’s plan to divest $10 billion of assets over 2019 and 2020.
BP and Hilcorp have developed detailed transition plans to deliver a smooth handover of operations upon completion to allow Hilcorp to focus on embedding planned operating efficiencies as rapidly as possible.
This transaction is part of BP’s divestment program to deliver US$15 billion of announced divestments by mid-2021. Further information relating to this transaction will be included in BP’s first quarter 2020 results scheduled for release on 28 April 2020.