BP said to near $11-billion asset sale to Apache

BP Plc may reach an agreement as soon as next week to sell assets to Apache Corp for $10 billion to $11 billion, including half its stake in Alaska’s Prudhoe Bay field, according to sources.

The deal will probably be an all-cash transaction, said one of them.

BP is pressing to get the deal done before July 27, when it reports second-quarter earnings, said one of the people. Talks were progressing so swiftly this week, negotiators thought the deal might be clinched by July 19. Discussions over the rights of BP’s partners in Prudhoe Bay, the largest US oil field, slowed the timing by a few days, said the source.

Apache’s progress in raising between $6 billion and $7 billion in financing has helped speed negotiations, one of the sources said. Apache was able to raise money more quickly for the transaction because lenders saw potential for Apache to squeeze more production from Prudhoe Bay, which has been a declining field, the person said.

Goldman Sachs and Bank of America Merrill Lynch are advising Apache. Standard Chartered is advising BP.

The deal would accelerate BP’s plan to sell $10 billion of assets over 12 months to fund compensation payments for damages related to the Gulf of Mexico oil spill, caused by the explosion of its Macondo well.

BP said it will concentrate on selling assets outside regions with the most lucrative production growth. Prudhoe Bay’s output, once greater than 1.5 million barrels a day, averaged 234,772 barrels a day this month, according to Alaska state tax records.