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BP plc has reaffirmed its plan for completing the sale of its Alaska business to Hilcorp Energy Co., first announced in August 2019.
The parties have renegotiated the financial terms of the deal expect to complete the transaction in June 2020.
New Deal Terms
The deal was originally struck in August 2019 and the purchase price agreed to was $5.6 billion.
Under the revised agreement, the purchase price remains unchanged at $5.6 billion, however, the structure of the consideration and phasing of payments has been modified.
- ORIGINAL: The original agreement provided for Hilcorp to pay BP $4.0 billion near-term and $1.6 billion through an earnout thereafter. Hilcorp paid BP a $500 million deposit on signing of the transaction in 2019.
- REVISED: The revised agreement adjusts the structure and phasing of the remaining consideration to include lower completion payments in 2020, new cash flow sharing arrangements over the near-term, interest-bearing vendor financing and, potentially, an increase in the proportion of the consideration subject to earnout arrangements.
Specifics on payment numbers / phasing for the revised agreement was not disclosed.
William Lin, BP chief operating officer, Upstream regions said: “We have worked closely with Hilcorp to reconfirm our commitment to completing this deal. The agreed revisions respond to market conditions while retaining the overall consideration. We look forward to progressing swiftly to completion and for Hilcorp to take over the operation of this important business. We are confident that completion of this sale is the right thing for both parties, for the business and for Alaska.”
Further information relating to this transaction will be included in BP’s first quarter 2020 results scheduled for release on 28 April 2020.
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