BP advances divestment with Texas gas sale

BP has taken another step towards meeting its $10bn divestment programme for 2014-15 after agreeing to sell some of its gas assets in the northwest portion of the Texas Panhandle to US independent Pantera Energy for $390mn.

The assets comprise BP's interests in the Panhandle West and Texas Hugoton gas fields, covering around 270,000 gross acres in Sherman and Moore counties. They include around 500 BP-operated wells that produce sour gas and associated natural gas liquids (NGLs) and helium. BP's current net production from the fields is around 4,800 b/d of oil equivalent (boe/d), including 2,000 b/d of NGLs and 96,000 ft³/d of helium.

The divestment, due to close on 31 July, will leave BP with around 1,700 operated wells in the Texas Panhandle.

The sale is part of BP's "value over volume" strategy that aims to focus investment on a smaller but higher-margin portfolio. The company announced plans in October last year to divest a further $10bn of assets by 2016, having sold $38bn in 2010-13 to help cover its liabilities for the 2010 Macondo oil spill in the US Gulf of Mexico. The firm had announced around $3bn of asset sales as part of its new divestment programme as of April this year, including stakes in some Alaskan oil fields and its specialist aviation turbine oils business.

The latest divestment comes as BP seeks to strengthen the competitiveness of its US onshore business. The firm announced plans in March to separate its onshore oil and gas operations in the lower 48 US states from the rest of its upstream portfolio so that it can compete more effectively with the independents that dominate the North American shale industry. The new onshore business will be operational early next year. BP expects it to speed up decision-making, cut costs, ensure better investment decisions and reduce the time it takes to bring resources on stream.

BP announces its second-quarter results on 29 July.

jk/ts

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