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BP Reportedly Commences $3B Onshore Asset Divestment in US

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BP plc (BP - Free Report) has commenced its divestment program for onshore oil and natural gas properties in the United States, per Reuters.

The source added that the asset sale will likely fetch the British energy giant more than $3 billion. The proceeds are expected to be utilized to partly finance the recent purchase of other U.S. resources from BHP Billiton Limited (BHP - Free Report) .

BP is currently focusing on prolific resources in the United States like Permian basin and Eagle Ford shale play. The integrated energy player’s intention to boost production from both the resources is justified despite the oil pricing scenario being presently low — West Texas Intermediate (WTI) crude trading below $50 a barrel. This is because the break-even oil prices of both Permian basin and Eagle Ford are below $30 a barrel, per a presentation by Pioneer Natural Resources Company (PXD).

Investors should know that despite being an integrated energy player, BP generates a significant part of its earnings from upstream businesses. In fact, the company has been banking on a strong portfolio of upstream projects that are expected to fetch significant cash flow. Since 2016, BP has brought 19 key upstream projects online. All the key projects BP have been delivering over the years backed the company’s record production levels.

Presently, BP carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space include Cabot Oil & Gas Corporation and Unit Corporation (UNT - Free Report) . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.  

Cabot will likely post earnings growth of 113.2% and 59.9% through 2018 and 2019, respectively.

Unit Corp surpassed the Zacks Consensus Estimate in three of the last four quarters, the average positive earnings surprise being 21.3%.

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