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BP Has Acquired Archaea Energy for $4.1 Billion Developing Its bioenergy business
02/09/2023
BP acquired renewable natural gas (RNG) provider Archaea Energy Inc. for $4.1 billion on December 28, marking a milestone in the growth of BP’s strategic bioenergy business.
The acquisition, announced in October, was finalized following BP’s completion of regulatory requirements and Archaea obtaining shareholder approval.
BP sees a golden opportunity to extend its bioenergy business by bringing Archaea fully into the company. Based in Houston, Archaea Energy operates 50 RNG and landfill gas-to-energy facilities in the U.S. and is anticipated providing a quick 50% rise to BP’s biogas supply volumes, BP said in October.
In October, BP announced it had agreed to purchase Archaea, subject to regulatory and Archaea shareholder approval. Having received those approvals and with the transaction complete, Archaea broadens BP’s presence in the US biogas industry, improving its ability to support customers’ decarbonization aims and progressing its goal to decrease the average lifecycle carbon intensity of the energy products it sells.
Bioenergy is one of the most significant strategic transition growth engines that BP is going to proliferate through this decade. BP anticipates investment into its transition growth businesses to achieve more than 40% of its total annual capital expenditure by 2025, targeting to increase this to about 50% by 2030.
Gas & low carbon energy (G&LCE) integrates BP’s existing natural gas capabilities with significant growth in low and zero-carbon businesses and markets. The company is investing in and building renewable energy capacity of 20 gigawatts by 2025 and 50 gigawatts by 2030. It grows up its integrated gas portfolio, including equity gas, LNG, and merchant portfolio, and further develops its bioenergy offer solutions for aviation, marine, and heavy-duty transportation, creating a distinctive position in hydrogen and CCUS, including a 10% market share of hydrogen in core markets.
Archaea Energy is one of the largest renewable natural gas producers in the U.S., with an industry-leading RNG platform and expertise in developing, constructing, and operating RNG facilities to capture waste emissions and convert them into low-carbon fuel.
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Permian O&G Basin 2022 Review
The Permian Basin is one of the most important oil and gas basins in the world, located in western Texas and southeastern New Mexico in the United States. Oil drilling and production in the Permian Basin began in the early 1920s. The first significant discovery in the region was made in 1923 in the Westbrook field in Mitchell County, Texas. This discovery led to a boom in oil exploration and production in the area. By the 1930s, the Permian Basin had become one of the major oil-producing regions in the United States, and it continued to grow in importance throughout the 20th century.
Matador Expands In Delaware; Purchases Acreage from Advance Energy at $1.6 Billion
On January 24, Matador spread the word that it will add oil- and gas-producing assets in Lea County, N.M., and Ward County, Texas, and some midstream infrastructure. Most of the acreage is strategically situated in Matador’s Ranger asset area in Lea County. The bolt-on includes about 18,500 net acres, 99% held by production, in the core of northern Delaware. The deal would also extend Matador’s inventory by 406 gross (203 net) drillable horizontal locations with prospective targets in the Wolfcamp, Bone Spring, and Avalon formations.
Kinetik Holdings recently announced a series of transactions in the energy sector. They struck a deal to buy Durango Permian infrastructure for $765 million. At the same time, they're selling their 16% share in the Gulf Coast Express Pipeline to ArcLight Capital Partners for $540 million. The total purchase cost includes $510 million in cash paid immediately and an additional $30 million that will be paid later, depending on whether they decide to expand further.
Recently, the Permian has seen significant acquisitions: Exxon Mobil purchased Pioneer Natural Resources for about $60 billion. Diamondback Energy's $26 billion deal to acquire Endeavor Energy Resources is currently on hold due to requests from the U.S. Federal Trade Commission. Occidental’s acquisition of CrownRock for $12 billion in the Midland.
EOG Resources is pushing boundaries in Ohio's Utica oil play and now drilling on the Sable pad, also located in Noble County. This site features the 3.7-mile lateral currently under construction. The company's first multi-well pads in the area Timberwolf and Xavier have each produced over 200,000 barrels of oil since their inception—Timberwolf in August and Xavier in October. A third site, the four-well White Rhino pad in Noble County, is also showing promising early results, according to Keith Trasko, EOG’s Senior Vice President of Exploration and Production, who noted the wells are performing as expected in their initial weeks.