BP Confirms Plan To Complete Sale Of Alaska Business To Hilcorp In June

(RTTNews) - British energy giant BP Plc. (BP.L, BP_UN.TO, BP) Monday confirmed its plan to complete the sale of its Alaska business to Hilcorp in June 2020, subject to regulatory approvals.

The sale was first announced in August 2019.

Under the revised agreement, the total consideration for the sale remains unchanged at $5.6 billion, subject to customary closing adjustments. However, the structure of the consideration and phasing of payments has been modified to reflect recent significant market volatility and oil price falls.

Under the original agreement, Hilcorp agreed 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.

BP noted that the revised deal adjusts the structure and phasing of the remaining consideration. These 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.

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 are confident that completion of this sale is the right thing for both parties, for the business and for Alaska."

The sale is part of BP's divestment programme to deliver $15 billion of announced divestments by mid-2021.