Buying High, Selling Low -- The BHP US Shale Story Comes To An End -- July 28, 2018

Updates

August 2, 2018: BP's $10.5 billion BHP shale deal signals 'bold return' to lower 48 -- Rigzone -- August 2, 2018

Original Post

BP to buy BHP shale assets for more than $10 billion -- The Wall Street Journal.

BP acquiring the bulk of BHP’s operations in some of the hottest shale acreage in the U.S. BP will buy the bulk of BHP Billiton Ltd.’s BHP 1.42% U.S. onshore oil-and-gas unit for $10.5 billion, as the U.K. oil major rebuilds in the U.S. after the Deepwater Horizon disaster and BHP exits a business it has called a costly and mistimed investment. 

The sale accelerates a reshuffling of assets among global energy companies as oil prices surge to levels not seen since 2014. 

Chesapeake Energy Corp. aid Thursday it is selling oil-and-gas fields in Ohio for $2 billion, while Royal Dutch Shell has nearly completed a $30 billion asset-sale program begun after its roughly $50 billion acquisition of BG Group in 2016. 

It takes the total value of global oil-and-gas acquisitions unveiled in 2018 to almost $188 billion, closing in on last year’s $287 billion.

As an aside, these two notes:

• COP -- difficult justification to continue drilling in the Bakken -- 2Q18 earnings call, July 27, 2018 
• COP temporarily exits the Permian -- July 5, 2018

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From The Archives

 
Shell is said to have bid for BHP's US shale assets -- June 19, 2018 

Former head of corporate affairs for BHP Billiton confirmed by US Senate committee to be US State Department's head of energy -- May 17, 2018

BHP to accelerate plans to sell $10 billion US shale unit -- February 20, 2018

Taking a bath -- August 24, 2017

US shale operators eye world conquest -- The Telegraph -- August 23, 2017 

At $60,000 / acre in the Permian it might have been a tad expensive; BHP will sell its US shale assets -- August 22,2017

Poorly timed $20 billion shale deal -- outgoing chairman -- June 30, 2017

Floyd Wilson, Petrohawk Energy, BHP, and Halcon -- September 18, 2013 

KOG and BEXP in play after BHP buys Petrohawk -- July 15, 2011

Where it all began: three reasons why BHP was able and willing to buy Petrohawk at 65% premium; SeekingAlpha contributor -- smart move by BHP to pay $60,000 acre for Permian assets -- July 15, 2011

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Archived

The July, 2011, articles in SeekingAlpha are still available without a subscription.

This from Part I, the "heady" days of the Bakken boom (the entire article has been archived):

BHP Billiton agreed to pay $15B ($12B in cash and $3B in assumed debt) for Petrohawk late Thursday July 14, 2011. This amounted to $37.25/share. A huge premium given HK closed Thursday at $23.49/share. This effectively raises the prices on all of the oil leases in the major oil shale plays. HK had its acreage spread between the Haynesville, the Eagle Ford, and the Permian Basin. Most of its assets were in natural gas.

The most recent major buys in the Eagle Ford were for approximately $20,000 per acre. The most recent major buy in the Bakken was for approximately $17,000 per acre. These prices are far above the prices of just 1-2 years ago. These were probably $2000/acre or lower. Many oil exploration stocks with lease holdings in these areas are now far undervalued on a mark-to-market basis. A few of the companies that look like attractive buyout targets are: Northern Oil and Gas Inc., Magnum Hunter Resources Corp., Triangle Petroleum Corp., Kodiak Oil & Gas Corp., and GeoResources Inc. 

NOG has 162,000 net acres in the Bakken. MHR has 81,250 net acres in the Bakken and 25,046 net acres in the Eagle Ford. MHR also has 91,870 net acres in the Appalachian Basin of which 56,595 net acres are overlying the Marcellus Shale.

Upon completion of the NGAS and NuLoch acquisitions, MHR will have 397,020 net acres in Appalachia, 81,250 net acres in the Bakken, and 51,423 other net acres, which include 50,680 net Alberta acres.

TPLM has 72,000 net acres in the Bakken with plans to extend that to 100,000 net acres by the end of 2011. TPLM also has 412,924 net acres in a Nova Scotia play.

KOG has 70,000 net acres in the Bakken, 413,00 net acres in the Windsor Block of Nova Scotia, Canada, and 7,000 net acres in the Green River Basin.

GEOI has 46,000 net acres in the Bakken, and 24,000 net acres in the Eagle Ford. GEOI also has 29,000 net acres in the Giddings Field -- Austin Chalk, 2,585 net acres of HBP and 534 net acres of owned minerals in the St. Martinville Field, and 14,000 gross acres in the Quarantine Field in LA.