Oil giant British Petroleum (BP) is buying American biogas producer Archaea Energy (LFG) for
$4.1 billion U.S., including debt obligations.
The acquisition is the latest move by BP to expand into lower-carbon fuels such as biogas. In a
news release, BP said it will pay a 38% premium of $26 U.S. per share for Archaea Energy.
Archaea Energy, which is based in Houston, Texas, captures waste-gas emissions from landfills
and farms. Once the acquisition is finalized, the company will become part of BP’s bioenergy
division, the companies said.
Archaea Energy was created in 2021 through the combination of three renewable natural gas
companies. In its latest guidance, Archaea said it plans to produce 10.9 billion cubic feet of gas
a year, about 0.5% of BP’s total output of biogas fuel.
The environmental benefit of biogas fuel comes through the prevention of methane emissions
that are believed to cause climate change.
BP is striving to position itself as a leader among major oil companies when it comes to halting
greenhouse gas emissions and transitioning to cleaner forms of energy.
Year-to-date, BP’s stock is up 11% at $30.48 U.S. per share. Archaea Energy’s stock has risen
37% on the year and currently trades at $26.02 U.S. a share following news that it is being
acquired.
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