Plains Exploration & Production Co said on Monday that it would buy BP PLC's stake in some deepwater Gulf of Mexico wells for $5.55-billion (U.S.) to boost its oil production.
Plains Exploration, better known by the PXP stock exchange symbol, has been cutting its exposure to natural gas, whose prices have plunged to decade lows. Crude oil prices, meanwhile, are hovering near $100 per barrel.
BP said in May that it expected to raise $38-billion from assets sales between 2010 and 2013 to pay for damages from the 2010 oil spill.
The amount BP will have to pay in damages for the Deepwater Horizon oil spill is still in dispute, but it could reach up to $21-billion.
PXP, whose shares fell nearly 6 per cent, is buying London-based BP's 100 percent stake in the Marlin, Dorado and King and Horn Mountain fields and said it would also pay $560-million to acquire the remaining 50 per cent working interest in the Holstein Field from Royal Dutch Shell PLC.
PXP will also get BP's 33.33 per cent working interest in the Diana-Hoover Field, which is operated by ExxonMobil Corp , and BP's 31-per-cent stake in the Ram Powell field, which is operated by Shell Offshore Inc.
The properties that Houston-based PXP is acquiring were producing an estimated 59,500 barrels of oil equivalent net per day at the end of July.
PXP sold natural gas assets in Texas for $785-million last November.
The deal follows a Reuters report on Sunday that said BP was in talks to sell some of its Gulf of Mexico oil fields to PXP. The report cited a person familiar with the matter.