Equinor to sell US onshore Bakken assets for $900mn

Norway's state-controlled Equinor has agreed to sell its assets in the US Bakken shale in North Dakota and Montana following years of financial losses from its onshore business in that country.

Equinor will sell its entire operated and non-operated acreage and associated midstream assets in the Bakken to privately-owned Houston-based exploration and production firm Grayson Mill Energy for around $900mn. The effective transaction date is 1 January 2021, and closing is subject to conditions including authority approval.

The firm entered the Bakken in 2011 through its acquisition of US independent Brigham Exploration. It paid $4.7bn — a premium to its base value that the internal valuation struggled to justify. Equinor has invested around $40bn in the US since 2007 and spent over $10bn on acquisitions, and has acknowledged that the history of its US upstream business has been far from smooth sailing.

It criticised its own strategy in an October report that concluded it acquired assets in a high-priced environment without testing for robustness in a low-price scenario. This resulted in impairments on its US activities totalling $21.5bn from 2007-2019, of which $9.2bn came from its US onshore assets.

Equinor's exit from the Bakken follows the sale of its stake in the Eagle Ford basin to Spanish integrated Repsol for $325mn in 2019. The firm's US portfolio also includes the Appalachian Basins in Ohio and Pennsylvania, and offshore assets in the US Gulf of Mexico.

"Equinor is optimising its oil and gas portfolio to strengthen profitability and make it more robust for the future," chief executive Anders Opedal said today. "We are realising proceeds that can be deployed towards more competitive assets in our portfolio, enabling us to deliver increased value creation for our shareholders."

Equinor's entitlement production from the Bakken was 48,000 b/d of oil equivalent (boe/d) in the final quarter of last year. It will enter into a term purchase agreement for crude offtake with Grayson Mill Energy. And field employees and support teams working on the Bakken assets have the opportunity to transfer to Grayson mill Energy, Equinor said.

By Rowena Edwards