The acquisition will enable BHP to increase its stake to 72% in Shenzi field
BHP Billiton has entered into an agreement with Hess to acquire 28% stake in the Shenzi field in the Gulf of Mexico.
The purchase price of the Shenzi field stake is $505m.
BHP is currently the operator of the field with a 44% stake, while Hess and Respol are its partners.
The acquisition will enable BHP to increase its stake to 72% in Shenzi, a six-lease development in the deepwater Gulf of Mexico.
BHP petroleum operations president Geraldine Slattery said: “This transaction aligns with our plans to enhance our petroleum portfolio by targeted acquisitions in high quality producing deepwater assets and the continued de-risking of our growth options.
“We are purchasing the stake in Shenzi at an attractive price, it’s a tier one asset with optionality, and key to BHP’s Gulf of Mexico heartland.
“As the operator, we have more opportunity to grow Shenzi high-margin barrels and value with an increased working interest.”
Subject to customary closing conditions, the transaction is expected to close before year end 2020.
Shenzi field produced 11,000boed in the first eight months of 2020
In January-August period of 2020, the Shenzi field produced an average of 11,000 net barrels of oil equivalent per day.
BHP said that the acquisition is in line with its strategy of targeting counter-cyclical acquisitions in high-quality producing or near producing assets.
Hess CEO John Hess said: “Proceeds will be used to fund our world class investment opportunity in Guyana.
“This sale is aligned with our strategy to preserve cash and preserve the long term value of our assets in the current low oil price environment.”
The offshore Guyanese field is believed to have an estimated resource base of around 600 million barrels of oil equivalent.