BP Buys BHP Assets

BHP Billiton Ltd. (NYSE: BHP) said July 26 it landed buyers for its treasure chest of U.S. shale assets with two separate transactions worth a total of $10.8 billion cash.

The largest of the two transactions is the purchase by BP Plc (NYSE: BP) of BHP’s Delaware Basin, Eagle Ford and Haynesville assets for $10.5 billion cash. Separately, an affiliate of privately-held Merit Energy Co. agreed to acquire BHP’s remaining U.S. onshore oil and gas assets in Arkansas’ Fayetteville Shale for $300 million.

BHP will continue to operate the assets until completion of the deals, which it expects to occur by the end of October. The transactions will have an effective date of July 1.

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Permalink Reply by Bob Zimmerman on July 28, 2018 at 6:30
Permalink Reply by Skip Peel - Mineral Consultant on July 28, 2018 at 6:38

The perception of "under performance" regarding BHP's Haynesville assets may very well be related that the fact that the company stopped drilling wells for two and a half years,  2015 - mid-2017.

Permalink Reply by Spring Branch,mineral owner on July 28, 2018 at 8:55

And I'm not too sure that very many of BHP's wells drilled since mid-2017 have actually been frac'ed and

turned to sales until very recently.

Permalink Reply by Skip Peel - Mineral Consultant on July 28, 2018 at 9:02

Hard to tell looking at SONRIS.  The staff is so far behind that it now takes 6 to 8 months to get an LUW code.  And without an LUW code, no reported production.

Permalink Reply by Bob Zimmerman on July 30, 2018 at 5:18
>>


I get individual well production reports with serial numbers in SONRIS Lite. Or at least I was last time I looked. Things could be imploding down in BR.
Permalink Reply by Skip Peel - Mineral Consultant on July 30, 2018 at 5:23

The state doesn't provide monthly per well volume reports for unitized wells.  Only cumulative unit production.  Only in the case of a single unit well is per well production available.

I have a number of clients who have been waiting on first royalty from new wells drilled in the last quarter of 2017 and the first quarter of 2018.  And I talk to or email the OOC staff in charge of issuing LUW Code numbers.

Permalink Reply by Steve P on July 30, 2018 at 10:31

Ironic:  There are 6 - 8 sections of HA rights in the south sections of 12N 15W and north sections of 11N 15W that BP owned years ago and sold to Comstock.  No idea if the sections they had are as good as or better, or worse that the one they just bought from BHP.

Permalink Reply by Skip Peel - Mineral Consultant on July 30, 2018 at 10:39

12N-15W is good rock, 11N - 15W not so much.  The early wells drilled in 11N-15W, mostly Chesapeake, produced 2 to 4 million mcf Initial Production while the same well designs in other areas produced 3 or 4 times the volume.  This appears to be a porosity issue as indicated on a number of play maps.  Lower porosity, less Gas In Place (GIP).  There are some HC wells planned that span from the lower sections of 12N into the top sections of 11N that may provide some idea of whether the longer laterals and high intensity completions can make for economic wells. 

Permalink Reply by Steve P on July 31, 2018 at 11:49

Comstock has an upcoming hearing for a CUL for 35 12 15 and 2 11 15.  will be interesting to see how that comes out if and when they get around to drilling it.

Permalink Reply by Greg Whitson on March 19, 2019 at 9:18

What is the status of the sale?  I am unable to locate wells changed from BHP to BP and I am still seeing royalty from BHP.  Just curious.  Thank you.

Permalink Reply by Skip Peel - Mineral Consultant on March 19, 2019 at 9:46

There has been no change of operator as yet for the BHP operated Haynesville units.  If this was only a Haynesville/Bossier acquisition, I suspect that would have happened by now however this sale includes very large acreages in multiple basins.  BP has actively sought buyers for some of those basins.  The DJ Basin is one but I don't recall the other.  The Haynesville was not included in the basins that BP would like to sell.  I suspect that we will not only see change of operator forms filed with the state and available in the database but also some alternate unit well applications which may be accessed in SONRIS when BP starts up their drilling program.  I know that BP is formulating plans because I supplied some of my data to one of their landmen.  I am however not privy to what those specific plans are at this time.

Permalink Reply by Greg Whitson on June 24, 2019 at 15:37

I received a letter from BP today saying that they will start making payments Oct 2019 for Aug production.

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