UK-based multinational oil and gas company BP said on Monday it had amended some financial terms of the $5.6 billion sale of its Alaska business to privately held Hilcorp following the recent slump in oil prices, which may lead to a lower cash boost than initially planned, Reuters said in a report.
The revised agreement retains the total consideration but adjusts the structure and phasing of the remaining payment, which includes smaller payments in 2020 and a new cash flow sharing arrangement in the near-term, the British oil major said.
The new structure is however expected to maintain “the majority of the value of the transaction,” BP said.
BP shares were up 1% at 0845 GMT.
The original agreement provided for Hilcorp to pay $4.0 billion near-term and $1.6 billion through an earnout thereafter. Hilcorp paid a $500 million deposit on signing of the transaction in 2019, BP said.
The company still expects to complete the deal in mid-2020.
U.S. crude oil futures collapsed below $0 last week for the first time in history, dragged down by a supply glut and sagging demand for crude due to the coronavirus pandemic.
BP agreed to sell all its Alaskan properties, including interests in the most prolific oil field in U.S. history at Prudhoe Bay and the 800-mile (1,300-km) Trans Alaska Pipeline, to Hilcorp Energy Co last year, exiting a region where it operated for 60 years.