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BP Has Acquired Archaea Energy for $4.1 Billion Developing Its bioenergy business

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.

On January 3, Targa Resources Corp asserted that it is purchasing the remaining stake for $1.05 billion in cash from BlackstoneInc's energy unit in its Grand Prix NGL Pipeline that it does not already own. Targa, which is going to acquire a 25% stake from Blackstone Energy Partners, purchased 75% interest in the pipeline last year when it repurchased interests in its development company joint ventures from investment firm Stonepeak Partners LP for almost $925 million. The Stonepeak agreement also included 100% interest in its Train 6 fractionator in Mont Belvieu, Texas, and a 25% equity interest in the Gulf Coast Express Pipeline. Grand Prix has the capacity to transfer up to 1 MMbbl/d of NGL to the NGL market hub at Mont Belvieu. The same day Targa maintained the price of the Blackstone Energy Partners agreement, which is anticipated closing in the first quarter of 2023, representing roughly 8.75 times Grand Prix's valued 2023 adjusted EBITDA multiple.

Rangeland Energy has agreed to sell Rangeland Midstream Canada to Kingston Midstream Alberta and remains committed to future Canadian midstream investments. Texas-based Rangeland Energy, supported by financial partner EnCap Flatrock Midstream, has inked a deal to sell its Canadian subsidiary, Rangeland Midstream Canada Ltd., to Calgary's Kingston Midstream Alberta Ltd. for cash.

The merger between ONEOK and Magellan received approval from Magellan shareholders, securing just 55% of the total votes at Magellan’s meeting on Sept. 21. ONEOK Inc. has successfully concluded the acquisition of Magellan Midstream Partners LP on Sept. 25. The deal will bring together their respective assets and expertise, resulting in a powerful entity boasting an extensive network of approximately 25,000 miles of pipelines primarily focused on transporting liquids.

Viper Energy's deal, comprised of cash and equity, secures an additional 2,800 net royalty acres in the Midland Basin and 1,800 in the Delaware Basin. Viper Energy Partners LP, a Diamondback Energy Inc. subsidiary, has inked a deal to acquire mineral and royalty interests in the Permian Basin. The deal, valued at around $1 billion, is with Warwick Capital Partners and GRP Energy Capital. Viper was established by Diamondback with the purpose of owning, purchasing, and capitalizing on oil and natural gas assets in North America, specifically targeting mineral and royalty interests.

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