BP p.l.c. Sponsored ADR (BP.US) has agreed to sell its share of US shale assets to Sixth Street for $1.5 billion to improve its balance sheet.

BP p.l.c. Sponsored ADR (BP.US) has agreed to sell its stake in its US shale assets to Sixth Street for $1.5 billion, in an effort to improve its balance sheet and regain investor confidence. BP p.l.c. Sponsored ADR stated in a release that the US investment firm-managed fund will acquire non-controlling interests in the midstream assets in the Permian and Eagle Ford. CEO of BP p.l.c. Sponsored ADR, Murray Auchincloss, is aiming to turnaround years of underperformance by divesting assets, a situation that has attracted the attention of activist shareholder Elliott Investment Management. The newly appointed chairman, Albert Manifold, stated that the company must take "urgent" action to cut costs, sell assets, and improve profitability. The assets being divested announced on Monday include four Permian central processing facilities: Grand Slam, Bingo, Checkmate, and Crossroads. Following the transaction, BP p.l.c. Sponsored ADR's US onshore oil and gas division, BPX Energy, will hold a 51% stake in the Permian assets and a 25% stake in the midstream assets in Eagle Ford, and will continue to operate them. At the opening of the London Stock Exchange, BP p.l.c. Sponsored ADR's stock price rose by 1.7%, with a total increase of 15% year-to-date. As of the time of writing, the stock has fallen by 0.43% in pre-market trading. BP p.l.c. Sponsored ADR has committed to divesting $20 billion in assets by the end of 2027. The company has already reached agreements to sell its US onshore wind business to LS Power, completing its exit from the wind power sector. Additionally, BP p.l.c. Sponsored ADR has also agreed to sell its retail petrol stations and electric vehicle charging centers in the Netherlands. Elliott holds approximately 5% of BP p.l.c. Sponsored ADR shares, and has been calling on Manifold to take swift action to strengthen the company's cost base and improve capital allocation. The investment firm hopes for BP p.l.c. Sponsored ADR to reduce spending in areas such as renewable energy, while embarking on a large-scale divestment of non-core assets. The transaction with Sixth Street will take place in two phases, with approximately $1 billion paid at signing and the balance expected to be paid by the end of the year, pending regulatory approval.