BP Plc is in advanced talks to sell a group of oilfields in the Gulf of Mexico to Plains Exploration & Production Co., said two people with knowledge of the matter.
Plains is discussing a price of about $6 billion and may reach an agreement within days, said one of the people, who spoke on the condition of anonymity because the talks are private. Market capitalization of Houston-based Plains is about $5.2 billion and net debt was $3.05 billion as of June 30, according to data compiled by Bloomberg.
BP Chief Executive Officer Bob Dudley plans to sell $38 billion of assets by the end of next year, shrinking BP after the accident at its Macondo well, the worst offshore spill in U.S. history, wiped out a third of its market value. The London- based company said in May that it plans to sell some “non- strategic” assets in the Gulf.
BP prepared preliminary information for prospective buyers of Gulf assets including the Horn Mountain, Holstein, Diana Hoover and Ram Powell fields in the Gulf, two people with knowledge of the matter said last month.
Plains is spending about 69 percent of this year’s planned $1.6 billion capital budget at onshore fields such as the Eagle Ford in Texas and in California. It had allocated 14 percent, or $234 million, in the Gulf of Mexico, where it plans to ramp up its deep-water Lucius oil discovery beginning in 2014, according to a Sept. 5 investor presentation.
Scott Dean, a BP spokesman, declined to comment. Hance Myers, a spokesman for Plains Exploration, didn’t immediately return phone calls and an e-mail seeking comment.
BP isn’t quitting the Gulf, where the Macondo disaster occurred, Brett Clanton, a BP spokesman, said in an Aug. 14 e- mail.
“No one should confuse our effort to sell these older, non-strategic assets, which we announced months ago, with our ongoing commitment to the Gulf of Mexico,” he said. BP intends to continue investing at least $4 billion annually in the Gulf over the next decade, Clanton said in the e-mail.
The Wall Street Journal reported the talks earlier today.