BP pays $ 10.5 billion for BHP's shale gas assets to strengthen its operations in the United States

(Reuters) – BP Plc ( BP.L ) agreed to buy American shale gas and oil assets from global miner BHP Billiton ( BLT.L ) () BHP.AX ) for $ 10.5 billion, expanding the British oil giant's footprint in oil-rich onshore basins as part of its bigger deal for almost 20 years.

This acquisition marks an important milestone for BP since the Deepwater Horizon disaster in the Gulf of Mexico in 2010, for which the company is still paying more than $ 65 billion dollars in penalties and cleaning fees.

"This is a transformational acquisition for our division 48, a major step in the implementation of our upstream strategy and a world-class addition to BP's distinctive portfolio," he said. Bob Dudley, CEO of BP. In a new sign of recovery, BP announces an increase in its quarterly dividend for the first time in nearly four years and announces a $ 6 billion share buyback, partially funded by the sale of certain upstream assets.

The sale ends a disastrous seven-year investment by BHP in the shale sector, which investors led by the American hedge fund Elliott Management have put pressure on the company to get rid of the last 18 months. BHP put the company up for sale last August.

Investors and analysts said the selling price was better than expected and were pleased that BHP planned to return the proceeds to shareholders.

"It was the wrong environment to have bought the assets when they did, but that's the cheap way to have them sold," said Craig Evans, co – Portfolio Manager of the Tribeca Global Natural Resources Fund.

Analysts said that they had assumed that BHP would get between $ 8 billion and $ 10 billion in cash for assets.

BHP acquired shale assets in 2011 for more than $ 20 billion with the takeover of Petrohawk Energy and shale gas by Chesapeake Energy Corp., but suffered from the collapse in gas prices.

The world's largest mining company said it would record a new single shale load of about $ 2.8 billion after tax in its fiscal year 2018 results.

US BOOST FOR BP

The operation, BP's largest since the acquisition of the oil company Atlantic Richfield Co in 1999, will increase its onshore oil and gas resources by 57%.

BP will acquire the BHP unit that holds the assets of Eagle Ford, Haynesville and Permian for $ 10.5 billion, which gives it "one of the best properties of some of the best basins of United States".

She defeated rivals including Royal Dutch Shell ( RDSa.L ) and Chevron Corp ( CVX.N ) for assets, which combined a production of 190,000 barrels oil equivalent per day (boe / d) and 4.6 billion barrels of oil equivalent resources.

BP stated that the transaction would increase its earnings and cash flow per share and that it would still be able to maintain its debt ratio in a range of 20 to 30%.

The company also said it would increase its quarterly dividend by 2.5% to 10.25 cents per share, the first increase in 15 quarters.

Meanwhile, a Merit Energy Company unit will buy BHP Billiton Petroleum (Arkansas) Inc. and Fayetteville's assets for $ 0.3 billion.

Evans Evans of Tribeca praised the net outflow for money, rather than asset exchanges that BHP had reported as a possibility.

"This leaves a lot of leeway for the company to focus on its much better offshore oil market," he said.

Andrew Mackenzie, Chief Executive Officer of BHP, said the company had kept its promise to obtain value for its shale gas assets, while the sale was consistent with a long-term plan to to simplify and strengthen its portfolio.

BHP ( BHP.AX ) rose 2.3% after the announcement, outperforming the broader market and rival Rio Tinto ( RIO.AX ) ( RIO.L ).

BP stated that it would pay the $ 10.5 billion in installments over six months from the date of completion, with $ 5.25 billion of the consideration to be raised by the sale of new shares.

Elliott had no immediate comments on the announcement of the sale.