Key facts
- BP is considering expanding its U.S. shale footprint, including Devon Energy's Eagle Ford assets.
- BP entered the data room for Devon's South Texas assets in late August.
- BP ultimately decided against acquiring Devon's Eagle Ford position.
- Devon's Eagle Ford assets cover approximately 90,000 net acres and produced about 77,000 barrels of oil equivalent per day in the second quarter.
- TPH Research valued Devon's Eagle Ford assets at about $4.5 billion, while sources suggest a range of $3.5 billion to $4 billion.
- BPX Energy, BP's U.S. shale unit, produced around 545,000 boepd in the second quarter, with about 205,000 boepd from the Eagle Ford.
BP has begun actively exploring opportunities in the U.S. shale sector, signaling a potential shift in strategy under CEO Meg O’Neill. The energy giant reportedly entered the data room for Devon Energy's Eagle Ford assets in South Texas after they became available in late August. However, BP ultimately decided against pursuing a deal for the acreage, according to sources familiar with the matter.
Devon Energy's Eagle Ford position encompasses approximately 90,000 net acres and was producing around 77,000 barrels of oil equivalent per day (boepd) in the second quarter. While TPH Research recently valued these assets at approximately $4.5 billion, sources cited by Reuters indicated a more likely transaction range of $3.5 billion to $4 billion.
BP is already a significant player in the U.S. shale landscape through its BPX Energy unit, which produced about 545,000 boepd in the second quarter, including roughly 205,000 boepd from the Eagle Ford. A portion of Devon's Eagle Ford acreage was previously part of a joint venture with BP until its dissolution last year.
This renewed interest in U.S. shale comes after BP spent the past 18 months divesting assets, reducing debt, and working towards a $20 billion divestment target. The company had largely abstained from the recent wave of shale acquisitions. BP's second-quarter earnings were $5.7 billion, more than double the previous year, driven by higher oil prices and stronger refining margins. These elevated crude prices, exacerbated by Middle East supply risks, are increasing the cost of U.S. assets, presenting a challenge for buyers seeking to avoid overpayment.