With Shale Acquisition, BP Is Really Back In (U.S.) Petroleum

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About: BP p.l.c. (BP)
by: Laura Starks
This article is exclusive for subscribers.
Laura Starks
Long only, energy, oil & gas, commodities
Summary

On July 27, BP announced it had won most of BHP’s U.S. onshore shale assets at a purchase price of $10.5 billion.

Despite BP’s giant $153 billion market capitalization, the acquisition is transformative, putting BP in the middle of three prime U.S. shale plays.

The acquisition may mark BP’s return from the eight-year-ago Macondo tragedy: 11 people killed in 2010 while drilling a BP well. Safety, legal, and environmental issues have dominated management's attention.

The company has a 5.4% dividend yield at its August 7th closing price of $44.72/share. It has just increased its dividend and has announced a $6 billion share buyback.

After its 2010 Macondo tragedy, BP (BP) has focused its U.S. efforts on resolution and recovery. A sign the company has turned a corner is its just-announced $10.5 billion acquisition of most of