Business

BP Closes Deal That Will Increase Oil And Gas Production in Texas

The company has bought BHP Billiton’s shale oil and gas assets in the U.S., which will give it access to the fast-growing shale industry

This file photo shows a pumpjack operating in the Permian basin in 2013. BP has closed a deal that will bring in oil and gas production and resources in the liquids-rich regions of the Permian and Eagle Ford basins, in Texas.

BP has closed a deal that will bring in oil and gas production and resources in the liquids-rich regions of the Permian and Eagle Ford basins in Texas, as well as  in the Haynesville gas basin in Texas and Louisiana.

The energy company has bought BHP Billiton’s shale oil and gas assets in the United States for $10.5 billion in a deal that will give it access to the fast-growing shale industry.

CEO Bob Dudley described the deal as a “transformational acquisition.”

BP’s growth in the U.S. has been stalled in the aftermath of the Deepwater Horizon spill in the Gulf of Mexico, which has cost the company some $65 billion.

However, with oil prices now above $70 a barrel, shale exploration is seen as being profitable.

Another oil giant, Exxon Mobil Corp., has seen an increase in profits during the second quarter due to rising oil prices. Profits were up by 18 percent, but the results Friday fell short of Wall Street expectations, and shares dropped in early trading.

Exxon earned $3.95 billion in the second quarter, or 92 cents per share.

Analysts were looking for $1.26 per share, according to a survey by Zacks Investment Research. Exxon does not adjust results based on one-time events such as asset sales, which totaled $307 million in the quarter.

Exxon is a global producer, and the price of benchmark international crude is up more than 50 percent from a year ago.

With the higher prices, Exxon’s revenue jumped 27 percent to $73.50 billion, despite a 7 percent decline in production of oil and natural gas. The company said production in the Permian Basin of Texas and Bakken field in North Dakota rose 30 percent, but that couldn’t offset declines in other areas.

Exxon is spending more to look for new sources of energy, however. It reported that capital spending — which was cut sharply during the price collapse that started in 2014 — jumped 69 percent after a 36 percent increase in the first three months of the year. Exploration work and drilling are notably rising in Brazil, the Permian Basin and Indonesia.

Natural gas output fell 10 percent, however, partly because the company is focusing its U.S. shale operations on producing more oil and partly due to lower demand for gas in Europe.

Profit margins in Exxon’s refinery business rose, with a higher number of facilities down for maintenance.

In trading before the opening bell, shares of Irving, Texas-based Exxon were down $3.62, or 4.3 percent, to $80.61.

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