BP plc’s Lower 48 oil and gas business has been rebranded as BPX Energy to mark a new era of growth, executives said Wednesday.
The Lower 48 business has been a separate entity for about four years after it was launched in 2014. However, the $10.5 billion acquisition of BHP’s U.S. onshore portfolio, completed Wednesday, has transformed the portfolio, said upstream CEO Bernard Looney.
The purchase increased onshore oil and gas production by 190,000 boe/d and included 4.6 billion boe of discovered resources in the Permian Basin, Eagle Ford and Haynesville shales.
“By every measure, this is a transformational deal for our Lower 48 business,” Looney said. “It is an important step in our strategy of growing value in Upstream and a world-class addition to BP’s global portfolio.”
Once the assets are integrated, the transaction is expected to generate more than $350 million/year in pre-tax synergies. Upstream pre-tax free cash flow is estimated to increase by $1 billion, to hit $14-15 billion in 2021.
The “BP” portion of the name reflects that the Lower 48 business is owned by BP, while The “X” stands for exploration, both the search for new resources “as well as for new ideas and methods to fundamentally improve the business,” management noted.
“We are exploring how to improve every aspect of our business,” said BPX CEO Dave Lawler, who has run the Lower 48 business since it launched. “Our mission is to build an organization imbued with a strong, inclusive, modern culture where everyone is respected, supported, and encouraged to achieve their highest potential and career aspirations; an organization that leads the industry in the protection of people and the environment, while simultaneously creating significant value for BP’s shareholders.”
BP in late 2016 said it planned to establish Lower 48 headquarters in Denver to mark a return to the Rocky Mountain energy hub, where legacy operations once held a significant presence. Overall, U.S. operations are based in Houston.
“While we have more to do, we have made great progress toward our goals, while also delivering material value to BP,” Lawler said. “And I’ve never been more confident about our future.”