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The Oil industry company BP logo seen in Krakow. (Photo by Omar Marques/SOPA Images/LightRocket via Getty Images)

BP is buying most of BHP Billiton's U.S. onshore holdings in a $10.5 billion deal that vastly bolsters its presence in the booming shale patch, where BP has previously had a limited portfolio.

Why it matters: The deal "transforms BP’s U.S. business" and will immediately raise its U.S. production by nearly a fifth, with room to grow from there, Wood Mackenzie analyst Maxim Petrov said in a note Friday. It's BP's largest deal since buying Atlantic Richfield in 1999.

By the numbers: BP is acquiring 470,000 acres spread across the Eagle Ford and Permian basins in Texas — which are major oil producing regions — and the gas-rich Haynesville basin in Texas and Louisiana.

  • Those assets currently produce a combined total of 190,000 barrels worth of oil and gas per day, and contain 4.6 billion barrels of oil-equivalent resources, BP said.
  • That represents a major addition to the company's existing onshore resource base of 8.1 billion barrels of oil-equivalent.
"There’s plenty of running room for BP to add value straight away as the assets have been under-invested for the past two years."
— Petrov, the WoodMac analyst, said.

The other side, per Reuters: "The sale ends a disastrous seven-year foray by BHP into shale on which the company effectively blew up $19 billion of shareholders’ funds."

The big picture, via The Houston Chronicle: The deal "represents a major turnaround for BP as it seeks to grow again after the 2010 Deepwater Horizon tragedy in the Gulf of Mexico."

The company said investors will see gains. BP also announced last night that it's increasing its second-quarter dividends by 2.5%. However, the company's stock is down slightly in pre-market trading.

  • In addition to the BHP acreage acquisition, BP said that once the deal is complete, it's planning $5-6 billion in new divestments to fund share buybacks.

Go deeper: Bloomberg has much more on the deal here.

Go deeper

50 mins ago - Politics & Policy

Stalemate over filibuster freezes Congress

Illustration: Sarah Grillo/Axios

Senate Majority Leader Chuck Schumer and Mitch McConnell's inability to quickly strike a deal on a power-sharing agreement in the new 50-50 Congress is slowing down everything from the confirmation of President Biden's nominees to Donald Trump's impeachment trial.

Why it matters: Whatever final stance Schumer takes on the stalemate, which largely comes down to Democrats wanting to use the legislative filibuster as leverage over Republicans, will be a signal of the level of hardball we should expect Democrats to play with Republicans in the new Senate.

Dave Lawler, author of World
1 hour ago - World

Biden opts for five-year extension of New START nuclear treaty with Russia

Putin at a military parade. Photo: Valya Egorshin/NurPhoto via Getty

President Biden will seek a five-year extension of the New START nuclear arms control pact with Russia before it expires on Feb. 5, senior officials told the Washington Post.

Why it matters: The 2010 treaty is the last remaining constraint on the arsenals of the world's two nuclear superpowers, limiting the number of deployed nuclear warheads and the bombers, missiles and submarines which can deliver them.

Updated 2 hours ago - Technology

Facebook refers Trump ban to independent Oversight Board for review

Photo: Alex Edelman/AFP via Getty Images

Facebook's independent Oversight Board has accepted a referral from the platform to review its decision to indefinitely suspend former President Trump.

Why it matters: While Trump critics largely praised the company's decision to remove the then-president's account for potential incitement of violence, many world leaders and free speech advocates pushed back on the decision, arguing it sets a dangerous precedent for free speech moving forward.

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