By David French and Collin Eaton (NYSE:)
(Reuters) – BP’s plan to sell its interest in a half-million acres (202,340 hectares) of land in Wyoming dotted with 2,000 oil and gas wells has been put on ice.
Over 4 feet (1.3 metres) of snow fell this winter in the Wamsutter field in south-central Wyoming – more than double the usual average – and that buried anything a prospective buyer would be able to see to evaluate the land. BP (LON:), as a result, is postponing selling the acreage for several months, according to documents sent to bidders this month and reviewed by Reuters.
Even without massive accumulations of snow, oil acreage has been tough to divest this year because of volatile markets and caution from lenders.
BP is focussing on new holdings in West Texas’s Permian region, and wants to unload land worth about $3 billion (£2.3 billion) in Oklahoma, Colorado, East Texas and Wyoming. The sales plans are part of a programme designed to raise about $10 billion in the next two years.
While BP is in various stages of the sale process in several states, the company told potential buyers that it could not show them the Wamsutter field in the Northern Greater Green River Basin of Wyoming, according to a letter obtained by Reuters.
The letter includes pictures of workers in hard hats, next to snowdrifts taller than they are, and snow enveloping drilling equipment.
The National Weather Service is predicting another storm will bring several inches of snow to the area Thursday.
BP says it is unsure when it will put the acreage on the market but hopes to make a deal by the end of the year. It blamed the holdup on “significant operational problems” that have caused a “reduction in production volumes” from the field.
“BP’s current focus is the safe and efficient return of the wells and surface facilities to production; therefore, the divestiture process has been delayed,” a BP acquisitions manager said in the letter.
Wyoming currently produces 261,000 barrels of oil a day, its most in 27 years.
BP, which is the largest operator in the Wamsutter field, declined to comment.
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