US-based energy company Hess is selling its entire stake of 28% in the Shenzi field in the deepwater Gulf of Mexico to BHP Billiton for $505m.
With a 44% stake, BHP Billiton is currently the operator of the field, located nearly 195km off the Louisiana coastline.
In the first eight months of 2020, the Shenzi field has produced an average of 11,000 net barrels of oil equivalent per day.
Discovered in 2002 with exploratory drilling on Green Canyon Block 654, the Shenzi field started producing oil in March 2009.
The field is estimated to hold recoverable reserves of between 350 million and 400 million barrels of oil equivalent.
Hess CEO John said: “Proceeds will be used to fund our world class investment opportunity in Guyana.
“This sale is aligned with our strategy to preserve cash and preserve the long term value of our assets in the current low oil price environment.”
BHP Billiton will increase its stake in the field to 72% following the completion of the transaction.
With an effective date of 1 July 2020, the transaction is expected to be closed before the end of the year.
The deal is part of BHP’s strategy of targeting counter-cyclical acquisitions in high-quality producing or near producing assets.
BHP President Petroleum Operations, Geraldine Slattery said: “We are purchasing the stake in Shenzi at an attractive price, it’s a tier one asset with optionality, and key to BHP’s Gulf of Mexico heartland. As the operator, we have more opportunity to grow Shenzi high-margin barrels and value with an increased working interest.”