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As a result of Bridas dropping plans to buy BP's stake in PAE, BP will repay a $3.53 billion deposit received late last year. BP said it is no longer in discussion with Bridas about PAE.
"PAE is a strong business," BP said. "BP is happy to return to long-term ownership of these valuable assets, given the considerable improvement in its own financial strength and circumstances, as well as the improved external trading environment."
Since June 2010, excluding the PAE assets, BP has agreed to asset sales worth more than $19 billion. The sales came as BP paid expenses associated with the April 2010 Macondo well blowout and resulting oil spill in the Gulf of Mexico.
In October, BP announced plans to extend its divestment program to $45 billion by the end of 2013, saying the ongoing divestment program involves the sale of nonstrategic assets and is not driven by a requirement to raise cash.
Encana to sell Barnett shale assets for $975 million
Encana Corp. unit Encana Oil & Gas (USA) agreed to sell its Barnett shale natural gas assets in the Fort Worth basin to various partnerships managed by EnerVest Ltd. for $975 million as part of Encana's previously announced plans to divest up to $2 billion in noncore assets by yearend.
The properties produce 125 MMcfd equivalent of gas and include associated gathering pipelines on 50,000 net acres.
Encana said it wanted to sell the Barnett shale assets to take advantage of higher-value liquids plays (OGJ Online, Aug. 25, 2011).
The Barnett shale sale, expected to close yet this year, is subject to normal closing conditions and regulatory approvals. After closing of this transaction, Encana will have divested $1.7 billion worth of assets.
Encana said the Barnett shale, which it entered through a corporate acquisition in 2004, provided the company with foundational knowledge it has applied across its newer US and Canadian resource plays.
Linn to buy Granite Wash assets for $600 million
Linn Energy LLC agreed to acquire US Midcontinent oil and natural gas assets from Plains Exploration & Production Co. for $600 million. The acquisition will double Linn's inventory of Granite Wash horizontal drilling sites in Texas and Oklahoma to more than 400.
Separately, Plains also agreed to sell South Texas conventional gas properties to another party for $185 million. Plains did not identify the South Texas buyer. Previously, Plains sold some Gulf of Mexico assets in an ongoing strategy to reduce debt (OGJ Online, Sept. 20, 2010).
Linn Energy expects its acquisition from Plains to close yearend, subject to meeting certain conditions. The deal, which involves more than 200 low-risk infill drilling locations, covers 20,000 Granite Wash net acres and 75,000 net acres outside the Granite Wash.
Mark E. Ellis, Linn president and chief executive officer, said, "We expect to yield significant operational efficiencies in the Granite Wash as we leverage our pad drilling techniques, simultaneous-operations processes, and recently built gas gathering and water handling infrastructure."
Linn is acquiring net production of 80 MMcfd of gas equivalent and will boost its proved reserves significantly upon closing. Plains estimated proved reserves at Dec. 31, 2010, at 263 bcf equivalent of which 90% was gas.
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