Baker Botts is representing BP in the transaction.
BP confirmed its commitment to completing the sale of its Alaska business to Hilcorp, first announced in August 2019. Subject to regulatory approvals, the parties expect to complete the transaction in June 2020.
Reflecting recent significant market volatility and oil price falls, BP and Hilcorp have successfully renegotiated the financial terms of the deal to respond to the current environment.
Under the revised agreement, the total consideration for the sale remains unchanged at $5.6 billion, subject to customary closing adjustments. However, the structure of the consideration and phasing of payments has been modified.
The original agreement provided for Hilcorp to pay BP $4.0 billion near-term and $1.6 billion through an earnout thereafter. Hilcorp paid BP a $500 million deposit on signing of the transaction in 2019.
The revised agreement adjusts the structure and phasing of the remaining consideration to include lower completion payments in 2020, new cash flow sharing arrangements over the near-term, interest-bearing vendor financing and, potentially, an increase in the proportion of the consideration subject to earnout arrangements.
The revised agreement is expected to maintain the majority of the value of the transaction. It is also structured with flexibility to phase and manage payments to accommodate current and potential future volatility in oil prices.
BP and Hilcorp have developed detailed transition plans to deliver a smooth handover of operations upon completion to allow Hilcorp to focus on embedding planned operating efficiencies as rapidly as possible.
BP p.l.c is an oil and petrochemicals company. The Company explores for and produces oil and natural gas, refines, markets, and supplies petroleum products, generates solar energy, and manufactures and markets chemicals. BP’s chemicals include terephthalic acid, acetic acid, acrylonitrile, ethylene, and polyethylene.
Hilcorp Energy Company operates as an oil exploration company. The Company provides oil, petrol, and natural gas.
The Baker Botts team included Dan Mark (Picture); Craig Vogelsang; Branden Lankford; Justin Hoffman; Katie Belleville; Stephen Noh; Robert Philpott; Renn Neilson; Ben Geslison; Thor Fielland; Rachael Lichman; Dan Tristan; Clint Culpepper; Josh Espinosa; Omar Alaniz; Brooke McNabb and Kim White. Luke Burns and Joyce Banks.
Involved fees earner: Omar Alaniz – Baker Botts; Arigesta Joyce Banks – Baker Botts; Katie Mize Belleville – Baker Botts; Luke Burns – Baker Botts; Clint Culpepper – Baker Botts; Josh Espinosa – Baker Botts; Thor Fielland – Baker Botts; Brooke Geren McNabb – Baker Botts; Ben Geslison – Baker Botts; Justin Hoffman – Baker Botts; Branden Lankford – Baker Botts; Rachael Lichman – Baker Botts; Dan Mark – Baker Botts; Renn Neilson – Baker Botts; Stephen Noh – Baker Botts; Robert Phillpott – Baker Botts; Daniel Tristan – Baker Botts; Kimberly Tuthill White – Baker Botts; Craig Vogelsang – Baker Botts;
Law Firms: Baker Botts;
Clients: BP Plc;