BHP completes $US300m sale of Fayetteville onshore gas asset

According to Mining News Pro - BHP has finalised the sale of its Fayetteville onshore gas assets in Arkansas to MMGJ Hugoton III for $US300 million ($415.3 million).

MMGJ Hugoton III, a subsidiary of Merit Energy Company, agreed to purchase 100 per cent of BHP Billiton Petroleum Arkansas’s share capital and 100 per cent of membership interests in Fayetteville asset holder BHP Billiton Petroleum Fayetteville earlier this year.

BHP first announced plans to divest its onshore US gas assets in an operational review released in April 2017, which highlighted the company’s decreasing petroleum production at the time.

In the 2017 financial year, BHP’s onshore US production fell year-on-year (YoY) by 26 per cent and in the 2018 financial year it fell by 10 per cent.

The 258,000-net-acre Fayetteville operation produced 13.3 million barrels of oil equivalent (13.3MMBOE) according to BHP’s 2018 annual report.

The sale represents part of a wider agreement by BHP to sell off its US onshore interests, including Fayettesville, Haynesville (both in Arkansas), Eagle Ford and Permian (both in Texas) for $US10.8 billion ($14.9 billion) in total.

Haynesville, Eagle Ford and Permian are to be purchased by BP subsidiary BP American Production Company through a $US10.5 billion ($14.5 billion) purchase of BHP subsidiary Petrohawk Energy Corporation.

Completion of the sale is expected to be completed by the end of October 2018 and is subject to regulatory approvals.