BP (LON: BP) will buy US shale oil and gas assets from BHP (ASX: BHP) in a $10.5 billion deal.
The deal represents the biggest deal for BP in over a decade and will increase BP’s onshore oil and gas resources by 57 percent.
BHP put the US shale oil and gas assets up for sale last August. According to analysts and investors, the price of sale is better than expected.
Craig Evans, co-portfolio manager of the Tribeca Global Natural Resources Fund, said: “It was the wrong environment to have bought the assets when they did but this is the right market to have sold them in.”
The sale is an important step for BP, who is currently pursuing an impressive growth plan.
“This is a transformational acquisition for our Lower 48 business, a major step in delivering our upstream strategy and a world-class addition to BP’s distinctive portfolio,” said BP in a statement.
The deal will increase BP’s barrels a day of oil and gas production by 190,000 and 4.6 billion barrels of discovered resources to BP’s asset base, leading to output growth into the next decade.
BHP shares rose 2.3 percent after the announcement.