British oil and gas group BP Plc (LON:BP) said its BP America Production Company unit is selling its midstream gas operations in Texas, comprising the Sunray and Hemphill gas processing plants and their gathering systems for USD227.5m (EUR185.1m) in cash.
The agreement was signed with US sector firm Eagle Rock Energy Partners LP (NASDAQ:EROC), BP said, adding that the operations to be sold will be better off in the hands of a specialist in midstream oil and gas.
The two plants serve BP’s natural gas production in the Texas Panhandle region. BP’s natural gas producing assets in the area are not part of this deal, the vendor explained.
The transaction is expected to wrap up in the fourth quarter of this year, pending receipt of regulatory clearances among other closing conditions.
BP’s gas operations in North America comprise assets in seven top gas basins in the US’s lower 48 states. The group continues to explore opportunities to grow its US onshore business over the long-term, as it considers it an integral part of its operations, it said.
According to the British group, its North America Gas (NAG) unit is the seventh largest natural gas producer in the US. BP invested over USD52bn in its US business between 2007 and 2011, more than it had spent in any other market, it said. BP employs 23,000 in the country.
Irish sales, marketing, distribution and business support services provider DCC Plc (ISE:DCC) announced on Wednesday it had agreed to buy the British liquefied petroleum gas (LPG) distribution operations of BP Plc (LON:BP) for EUR51.3m (USD63.5m).
The transaction excludes BP’s automotive LPG business, which will be transferred to the company’s UK fuels value chain, BP said separately. Its chief operating officer Tufan Erginbilgic believes that DCC has the ability to build on the acquired business and portfolio.
The move follows BP’s announcement in February of its intention to divest its LPG bottles and tank-filling activities along with some of its wholesale LPG operations in the UK, Portugal, Austria, Poland, the Netherlands, Belgium, Turkey, China and South Africa.
The acquisition will strengthen DCC’s position as the leading oil and LPG sales, marketing and distribution business in the UK, its chief executive Tommy Breen said. The buyer will satisfy the cash-and-debt free purchase price in cash at completion, which is scheduled for the end of September 2012.
BP’s British LPG activities deliver about 87,000 tonnes of bulk and cylinder LPG on an annual basis to a broad range of industrial, commercial and domestic clients. The business operates from a network of 13 sites across the UK and has a headcount of 116 and a fleet of 62 delivery vehicles. Its net tangible operating assets amounted to some EUR38m at the end of 2011.
DCC noted that the footprint of this business complements its existing LPG unit in the UK, called Flogas.