Tuesday, 11 September 2012

BP desperate to raise money through asset sale

BP is in talks to sell some of its Gulf of Mexico oil fields to Plains Exploration & Production Company for roughly $7bn looks to raise money to pay for damages from the 2010 oil spill.
The amount BP will have to pay in damages for the Deepwater Horizon oil spill is still in dispute. But last month the United States Justice Department accused the company of gross negligence and willful misconduct over the spill, a position that could lead to nearly $21bn in civil damages if a federal judge agrees.
BP said in May that it was looking to sell a number of mature fields in the Gulf of Mexico, including its positions in the Marlin, Horn Mountain, Holstein, Ram Powell, and Diana Hoover fields.
A deal would be transformational for Houston-based independent oil explorer and producer, Plains, which had a market capitalization of $5.2bn. The company already has assets in the Gulf, as well as in California, Texas, Louisiana, and the Gulf of Mexico.
Like many other independent US oil and gas companies, Plains has been working to build up its oil assets, as the price for US natural gas has been in a prolonged slump. It had previously estimated that about 57 to 60 per cent of its 2012 production would be oil.

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