BP Plc (LON:BP) on Friday unveiled a US$10.5bn deal with BHP Billiton plc (LON:BLT) to acquire the mining and natural resource firm’s entire US oil and gas business.
It acquires 100% of Petrohawk Energy Corporation, the BHP subsidiary that holds interests in the Eagle Ford, Haynesville and Permian basin shale assets – which together yield some 190,000 barrels oil equivalent per day of production and 4.6bn barrels of discovered resources.
The move, according to BP, will provide growth into the next decade. It is accretive to both earnings and cash flow, indeed the oil major is now upgrading its medium-term upstream free cash flow target by US$1bn, to US$14-15 bn in 2021.
As something of a sweetener for BP’s more conservative, income-focused shareholders the company also today announced its first dividend hike for some fifteen quarters, with the payout rising 2.5% to 10.25 cents per share for the second quarter.
Royal Dutch Shell Plc launches US$25bn buyback
Earlier in the week, Royal Dutch Shell Plc (LON:RDSB) has decided to launch a US$25bn share buy-back programme, earlier than most analyst has anticipated.
The programme will run through 2018 to 2020, it will effectively reduce the oil major’s equity in issue by around 10%, and follows an extended period in which low crude prices meant dividends were paid in shares. It kicks off with a maximum commitment to repurchase US$2bn of shares in the first three months.
It came as Shell reported the current cost of Supply (CCS) earnings attributable to shareholders – its preferred metric for the bottom line - had increased during the second quarter. The figure, excluding certain items, amounted to US$4.69bn up 30% from the US$3.6bn seen in the first quarter.
Chariot land Shell ‘back-in’
In the small cap market, there was the news that Chariot Oil & Gas Limited (LON:CHAR) told investors that it has been given an option to acquire between 10% and 20% of a Royal Dutch Shell PLC (LON:RDSB) led exploration venture offshore Mauritania.
Shell was recently awarded block C-19, an area previously held by Chariot before it walked away from the project in 2016 when a weak market prevented the junior explorer from securing a farm-out deal.
In Monday’s statement, Chariot explained that it has been working with Shell and its partners and, now, in recognition of its expertise and knowledge of the area, it has been given the option to ‘back-in’ to the project.
A day later, Chariot chief executive Larry Bottomley told investors that the focus for the remainder of 2018 is on the delivery of safe and cost-effective drilling operations in Namibia. The company also continues to seek partnerships throughout its portfolio, mature its exploration prospects and ultimately deliver further funded drilling opportunities.
New drilling is now scheduled for the fourth quarter of this year. Ocean Rig Poseidon is to drill Prospect S, a possible high impact well targeting an estimated 459mln barrel prospective resource, with an estimated probability of geologic success of 29%.
Schlumberger takes direct stake in Sound Energy’s Morocco assets
A process is now underway to assign a Schlumberger subsidiary a 27.5% participating interest in Sound Energy PLC (LON:SOU) the Tendrara Lakbir permits, the Anoual permits and the Matarka reconnaissance licence.
It comes as Sound advances towards new drilling in the region.
On Tuesday, Sound confirmed the start of civil works in preparation for the planned drilling of the TE-9 well, within the Tendrara licence onshore Morocco. The first stage of civil works sees the construction of an access road to the well site. The explorer also told investors that it has now signed a rig contract for the programme.
Eland hits significant oil pay in Opuama-10 well
On Wednesday, Eland Oil & Gas PLC (LON:ELA) told investors that the Opuama-10 well, the latest at the Opuama field in Nigeria, has unearthed significant oil pay.
The well was drilled down to a depth of 8,121 feet and encountered six oil bearing reservoirs with some 307 feet of total net pay. A dual completion will see the company open up the D1000 reservoir perforating a 32 feet interval along with the D5000 reservoir which will be an interval of 50 feet.
The company expects the well’s production will be in line with its forecast, between 4,000 and 6,000 barrels of oil per day, which would result in field output reaching 30,000 bopd. It would mean that Eland’s Elcrest joint venture subsidiary would see 1,800 to 2,700 bopd from Opuama-10 and around 13,500 bopd from the field.
Bahamas Petroleum still in major partnership talks
On Thursday, Bahamas Petroleum Company (LON:BPC) was in focus as it extended a confidentiality and exclusivity deal with ‘a major international oil company’ to allow partnering talks to continue. It is a one-month extension to the original three-month confidentiality and exclusivity period, taking the deadline to September 1, and the company has two further monthly extension options.
The potential partner had already paid US$750,000 for the three months, and, another US$250,000 will now be paid to the AIM quoted explorer (any further extensions will require additional US$250,000 payment per month).
United Oil & Gas looks forward to UK well
United Oil & Gas Plc (LON:UOG) has revealed that the planned Colter appraisal well on the south coast of England has passed an important administrative milestone and remains on-track for drilling in the fourth quarter of this year.
The explorer noted that an ‘authorisation for expenditure’ has now been signed, ascribing a £7.5mln total cost for the well – which would equate to just over £1mln of costs to United.
Colter was first discovered in 1986 within the same play as Wytch Farm, the UK’s largest onshore oil operation producing some 450mln barrels of crude to date, and, whilst the original Colter well was seen to be exposed to only 4mln barrels of resources the whole feature is believed to be larger.
i3 Energy progressing Liberator
Friday saw i3 Energy PLC (LON:I3E) tell investors on Friday that “significant progress” had been made with its proposed joint venture farm-in deal for the Liberator and Liberator West blocks in the UK North Sea.
The oil and gas company said it expects to sign a legally binding farm-out agreement (FOA), a joint operating agreement (JOA) and other legal documentation with an unnamed firm before the end of the exclusivity period, which runs to September 24.
Solo Oil names new chairman
Solo Oil PLC (LON:SOLO) has named Alastair Ferguson as the successor to Neil Ritson, who is due to retire from his position as chairman.
Ferguson immediately joins as non-executive director before taking the reins from Ritson, who leaves his position on 6 August and will become a technical advisor to the company.
"As the company enters a critical phase in considering the commercialisation of its core assets in the Ruvuma Basin, the Horse Hill discovery and its exciting helium asset, I am delighted to be invited by the Solo board to become a non-executive director and chairman-designate,” Ferguson said in a statement.