BP shares surge after $1.5 billion sale of US shale stakes to Sixth Street
BP Plc has agreed to sell stakes in its US shale assets to investment firm Sixth Street for $1.5 billion, as the British energy major looks to strengthen its balance sheet and regain investor confidence.
Shares in BP rose 1.7% to 449.85 pence at the London open on Monday, extending their year-to-date gain to 15%, News.Az reports, citing Bloomberg.
The deal will see funds managed by Sixth Street acquire non-controlling interests in BP’s Permian and Eagle Ford midstream assets, the company said in a statement.
The transaction is part of Chief Executive Officer Murray Auchincloss’s broader effort to streamline operations and reverse years of underperformance that drew pressure from activist investor Elliott Investment Management. New Chairman Albert Manifold recently emphasized the need for “urgency” in cutting costs, selling assets, and improving profitability.
The divestment includes four Permian central processing facilities — Grand Slam, Bingo, Checkmate, and Crossroads. After completion, BP’s US onshore business, BPX Energy, will retain 51% ownership of the Permian assets and 25% of the Eagle Ford midstream assets, maintaining operational control.
BP has pledged to divest $20 billion in assets by 2027. Recent moves include selling its US onshore wind business to LS Power, marking its exit from wind power generation, and agreements to offload Dutch retail fuel sites and EV charging hubs.
Elliott, which holds about a 5% stake in BP, has urged faster action to bolster the company’s cost structure and capital allocation, advocating reduced spending on renewables and more aggressive non-core asset sales.
The deal with Sixth Street will unfold in two phases: roughly $1 billion upon signing, with the remaining balance expected by year’s end, pending regulatory approval.
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