British energy company BP said Friday it agreed to pay $10.5 billion to acquire the onshore U.S. shale assets from Australian mining giant BHP Billiton.

"This is a transformational acquisition for our Lower 48 business, a major step in delivering our upstream strategy and a world-class addition to BP's distinctive portfolio," BP Chief Executive Bob Dudley said in a statement.

Upstream refers to the exploration and production side of the industry. Once completed, BP adds 470,000 acres to its U.S. onshore portfolio, including a position in the Eagle Ford, Haynesville and Permian shale basins. All told, the new acreage holds 4.6 billion barrels of oil equivalent resources.

Of those, the Permian shale is the most lucrative for BP. The U.S. Energy Information Administration expects oil production to reach 3.4 million barrels and gas production to reach 10.9 billion cubic feet per day by August. For oil, Permian represents about 30 percent of total U.S. production and a company can break even there so long as the price for Brent crude oil holds above $50 per barrel.

Maxim Petrov, a senior analyst for consultant group Wood Mackenzie, said in an emailed statement that BP has significantly built up its position in the United States through this acquisition.

"This deal transforms BP's U.S. business -- it will immediately raise its U.S. production by almost a fifth while providing competitive returns and volumes growth," he said. "We see BP's combined U.S. production hitting 1 million boe per day in 2020, with the potential to reach close to 1.4 million boe per day by 2025."

The British supermajor reported total oil and gas production averaged 3.7 million barrels of oil equivalent per day in the first quarter, up 6 percent the same period last year. The company reports second quarter results next week.

BHP remains tied to the U.S. energy sector with an equity interest in the Samurai project in the Gulf of Mexico, an emerging reservoir. It was the high bidder on three blocks during a recent federal auction. Its financial results are scheduled for an Aug. 21 release.

BHP has divested more than $18 billion in assets over the last six years. Following the completion of the deal, BP said it intends to divest at least $5 billion from its portfolio.

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