BHP boosts Shenzi stake as Hess deal closes

Hess Corporation has completed the sale of its interest in the Shenzi field, located in the deepwater Gulf of Mexico, to BHP, which now owns a 72 per cent interest in the field.

Hess entered into an agreement to sell its 28 per cent working interest in the Shenzi field in the deepwater Gulf of Mexico to BHP to fund a project in Guyana in early October 2020.

The Shenzi stake was sold for a total consideration of $505 million, subject to customary adjustments, with an effective date of 1 July 2020.

In an update on Friday, Hess confirmed it had completed the previously announced sale of its 28 per cent working interest in the Shenzi field to BHP.

“This transaction brings value forward in the current low price environment and further strengthens our cash and liquidity position”, CEO John Hess said.

“Proceeds will be used to fund our world-class investment opportunity in Guyana”.

In a separate statement on Saturday, BHP said that the transaction brings BHP’s working interest in the field to 72 per cent and adds approximately 11,000 barrels of oil equivalent per day of production (90 per cent oil).

BHP’s total petroleum production guidance for the 2021 financial year of between 95 and 102 MMboe will be updated at the second quarter Operational Review to reflect the additional production from Shenzi and other operational updates such as Gulf of Mexico hurricane impacts.

Shenzi is a six-lease development in the deepwater Gulf of Mexico and is structured as a joint ownership between BHP (operator, 72 per cent interest) and Repsol (28 per cent interest).