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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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CA$375 Million Bolt-on Deal to Expand Crescent Point
On December 9, Crescent Point Energy Corp. announced a purchase and sale agreement to develop its core Kaybob Duvernay assets, which will bolt on production, the midstream infrastructure and technical data. With the deal, the company has committed more than US $1 billion to the play. Crescent Point, the Alberta-based company, is purchasing almost 65,000 net acres from Paramount Resources Ltd. for CA $375 (US $274 million) cash. The assets estimate more than 4,000 boe/d, 50% liquids, and include a gas plant, associated pipelines, water infrastructure, and seismic data. The acquired asset’s production consists of 35% condensate, 15% NGL, and 50% shale gas.
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.
Continental Resources is expanding its operations in the Midland Basin, including taking over some assets that used to belong to Occidental Petroleum. The company plans to use its expertise in exploration in this area.
Equinor and EQT Corporation have agreed that Equinor will exchange its operated assets in the Marcellus and Utica shale formations in Ohio for a stake in EQT’s non-operated interests in the Northern Marcellus formation.
Appalachian Basin (formerly Marcellus and Utica) covers most of New York, Pennsylvania, Eastern Ohio, West Virginia, and Western Maryland in the north, reaching down to parts of Northwest Georgia and Northeast Alabama in the south. The basin is massive, covering about 185,000 square miles, roughly 1,000 miles long from northeast to southwest, and in some places, it's up to 300 miles wide. In this area, some major companies are making significant investments. EQT stands out as the largest producer in the Appalachian Basin, with other key players including Chesapeake, Range Resources, Antero, Repsol, and Gulfport also actively investing.