BHP sells Timor Sea stake to Phillips Petroleum

BHP sells Timor Sea stake to Phillips Petroleum

MELBOURNE (Bloomberg): The Broken Hill Proprietary Co, Australia's biggest resources company, said on Tuesday it sold its interest in the Bayu Undan gas field and the Elang Kakatua field in the Timor Sea to Phillips Petroleum Co.

The sale also includes BHP's interests in other permits located within the Australia-Indonesia Zone of Cooperation.

The company said it expects to book an abnormal profit of about A$110 million (US$70 million) on the transaction.

A price hasn't been disclosed.

BHP Managing Director and Chief Executive, Paul Anderson, said the transaction was part of the company's portfolio management.

"We believe the divestment of this group of mainly static assets will deliver greater value to BHP shareholders by enabling the company's petroleum business to focus its Australian gas commercialization activities around its interests in the North West Shelf, ALNG and Bass Strait," he said.

ALNG is the new independent marketing arm of the partners in the North West Shelf gas project.

The sale ends weeks of speculation that the company planned to sell the assets and will resolve the difference of opinion BHP and Phillips had over how the gas fields should be developed.

The Bayu Undan field extends across two blocks, and BHP sold its 42.4 percent interest in the block which contains the Undan gas discovery (ZOCA 91-12). Phillips has a holding in the adjacent block which contains the Bayu discovery.

Shares in BHP rose 34.9 cents, or 2.52 percent, to A$14.22.