Baker Hughes has decided to throw in the towel on exploration following a strategic decision to ‘substantially exit the oil and gas exploration business.’ Baker Hughes has already sold its Chinese oil and gas properties and has signed an agreement to dispose of its Gulf of Mexico properties and is negotiating another sale. These disposals will generate approximately $53 million, although Baker Hughes’ other exploration properties are to be written off.
Overall, the company will record an after-tax loss of approximately $75 million in the fourth quarter as a result of these sales and asset write-offs. In taking these actions, the company will avoid one-quarter of a billion dollars in future capital expenditures over the next few years.
The company will retain its interest in the OPL-230 property in Nigeria, which currently produces approximately 25,000 barrels of oil per day.
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