BP agrees to sell Kansas gas production and processing assets
Tuesday, February 28, 2012
- Completion of the agreement is subject to closing conditions including the receipt of all necessary governmental and regulatory approvals.
BP (NYSE: BP) announced that it has agreed to sell its interests in the Hugoton, Kansas, Jayhawk gas processing plant and associated producing gas fields in Kansas to an affiliate of LINN Energy, LLC (NASDAQ: LINE).
Article Tags BP Linn Energy United States North America Finance
Under the agreement, LINN Energy has agreed to pay BP $1.2bn in cash. Completion of the agreement is subject to closing conditions including the receipt of all necessary governmental and regulatory approvals. The sale is currently expected to complete on 30 March, 2012.
The agreement includes the sale of all of BP's working interest in about 2,400 wells in the Hugoton natural gas field, as well as the Hugoton Jayhawk gas processing plant, which has a processing capacity of about 450 million standard cubic feet of gas per day (mmscf/d). The majority of BP's current net natural gas production of about 110 million cubic feet of gas equivalent in the area is processed through the plant.
BP group chief executive Bob Dudley said: "We are reshaping BP's business around the world, focusing on our strengths and future growth opportunities. The sale of these mature assets will allow us to concentrate our efforts on our strong core positions in the U.S. and globally."
In 2011, BP produced over 1,800 mmscf/d natural gas in the US. BP's North America Gas business has a high quality portfolio of assets with a presence in 6 of the top 13 gas basins in the US Lower 48.
BP's operations center in Ulysses, Kansas is staffed by 120 employees. Most are expected to receive offers with LINN.
BP's growing presence in the wind business in Kansas will be unaffected by the sale.
This article is for information and discussion purposes only and does not form a recommendation
to invest or otherwise. The value of an investment may fall. The investments referred to in this
article may not be suitable for all investors, and if in doubt, an investor should seek advice from
a qualified investment adviser. More