Reaction to the news Tuesday that London-based oil giant BP has agreed to sell interests to Hilcorp in four North Slope oil fields -- in a deal representing less than 15 percent of BP's net production in Alaska -- was generally met with broad approval from industry observers in Alaska.

They were optimistic that Hilcorp, a smaller, more aggressive company, would squeeze more hydrocarbons out of the fields than BP, with its global interests and shareholders to please. But some observers disagreed over what the transaction says about Senate Bill 21, the state's generous and hotly-contested tax cut for the oil industry.

Gubernatorial candidate and oil and gas attorney Bill Walker praised Hilcorp, a newcomer from Houston, Texas, that has already turned around sagging oil and gas production in Cook Inlet near Anchorage. Walker said the announcement that another firm will operate on the North Slope, especially one that is strongly focused on local hire, is welcome news.

"Our future will depend on companies like Hilcorp coming up and doing what the bigger companies are not doing in some of the legacy fields," Walker said.

Democratic Sen. Bill Wielechowski of Anchorage said BP has not been exploring on the North Slope atop Alaska. Meanwhile, Hilcorp has launched a significant wildcatting program in Cook Inlet, the aging oil and gas basin in Southcentral Alaska.

"This is the way you get more oil out of older fields," said Wielechowski. "You bring in smaller companies that are hungrier and leaner, and they work on the smaller fields that the big, giant companies are not real inclined to work on."

In an announcement from BP on Tuesday, the London-based oil giant said the deal involves:

• All of BP’s interests in the Endicott and Northstar oilfields.
• A 50 percent interest in the Liberty and the Milne Point fields.
• BP’s interests in the oil and gas pipelines associated with these fields.

The fields collectively bring BP about 20,000 net barrels of oil a day.

BP, operator of the giant Prudhoe Bay oil field, will retain its interests in that field, which is also owned by ConocoPhillips and ExxonMobil. BP's overall production on the Slope totals about 140,000 barrels of oil daily.

Oil is the financial lifeblood of Alaska, providing the revenue that funds most state services and generating high-paying jobs that have rippling benefits for the economy. The closely-watched resource is flowing through the trans-Alaska pipeline at about 550,000 barrels of oil daily, and Alaskans across the state are hoping for increased production to ward off looming budget deficits.

Regulatory approval pending

Hilcorp, a privately-held company of 1,100 employees, made its presence known in Alaska in 2011 when it purchased the assets of Union Oil Company of California and later of Marathon Oil Corp.

BP said it would not release the financial terms of the agreement, which is subject to state and federal regulatory approval and should be completed by the end of the year.

Hilcorp's ability to breathe new life into mature basins is a great fit for the fields, said John Barnes, Hilcorp's senior vice president of exploration and production, in a statement. "The company is looking forward to bringing new energy to Alaska's North Slope and remains committed to its Cook Inlet operations," he said.

Hilcorp's statement said the tax cut that went into effect on Jan. 1 -- worth hundreds of millions of dollars a year for the state's largest oil producers -- is "an encouraging sign for the long-term viability of its operations" in Alaska.

Janet Weiss, president of BP's Alaska Region, said in a statement there are some big benefits to the transaction, including that it will allow BP to "focus on maximizing production from Prudhoe Bay and advancing" the LNG project that would send long-stranded North Slope gas down a pipeline to port, super-chill it into a liquid and ship it overseas.

Also, Hilcorp will "take ownership of two mature oil fields ready for new investment and activity, and it will operate a third field that is primed for accelerated production. And, the state gets another accomplished operator working the North Slope," she said.

BP's plans to increase investment on the North Slope as a result of the tax cut haven't changed, according to the company's statement. The plans include adding a drilling rig in 2015 and another in 2016 to the operations at Prudhoe Bay, resulting in a total investment of $1 billion over five years, 200 jobs and 30-40 additional wells.

BP said it plans to submit a development plan for the Liberty field by the end of 2014. And BP will retain half of the Milne Point field and expects to see increased activity there because it offers a lot of long-term opportunity for viscous oil development and heavy oil development, said Dawn Patience, a BP spokesperson.

Such plans in the oil industry are always subject to change, said Anchorage Democratic Sen. Hollis French. He said he likes Hilcorp but isn't pleased that BP is selling after repeatedly promising more investment in Alaska in the wake of the tax cut, and that the deal shows that oil taxes don't dictate the operations of global energy producers.

"They're cashing out on four fields, and taking their money and they can do whatever they want with it," he said, thanks to the tax cut that made the fields more valuable.

Democratic Rep. Les Gara of Anchorage was also upset. "It's a peek into the flawed logic of Senate Bill 21," he said, referring to the cut. "It didn't get BP to do anything in terms of developing the small fields we need. If they won't develop based on a tax giveaway, then there's no sense having them there."

'Great news' for 'stable tax regime'

Department of Natural Resources Commissioner Joe Balash, an appointee of Gov. Sean Parnell who introduced the tax cut, said the old tax regime, with its constantly-changing rates that rose and fell with the price of oil, made transactions like the Hilcorp-BP one difficult.

"Having a stable tax regime is a big factor in trying to evaluate the remaining value of any oil field," he said.

He called the deal "great news."

"Hilcorp is a company that's serious about bringing its capital to its assets," Balash said. "They are not publicly traded, and this represents a huge new addition to their portfolio. The folks at Hillcorp want to be here and have demonstrated their ability to increase production out of mature assets."

The process of a larger company developing a field then eventually handing off production rights to smaller companies has happened in basins around the world, he said. Hilcorp's strong suit has been recovering more oil and gas using below-ground techniques, including a thorough technical review by skilled geoscientists and the drilling of new wells or upgrades of old wells to boost production.

"Companies the size of BP are able to come in and take on the bigger risks and expense of getting a field going," he said. "They recover what they can in first, second and sometimes even the third cycles, but there comes a point at which the production at a field and the investments required just aren't material to a company the size of BP. And when that happens, it's a good thing for the fields to move into the hands of new operators."

BP, in its statement, released a few details on the fields, as well as a map of their locations:

• Milne Point is located about 25 miles west of Prudhoe Bay; Milne Point was discovered in 1969 and began production in 1985. BP became the operator in 1994. In 2013, average net BP production from Milne Point was about 15,800 boe/d. Current ownership: BP 100 percent.

• Northstar is located about six miles northwest of Prudhoe Bay in about 39 feet of water, and started production in 2001. The unit sits in state and federal waters. In 2013, average net BP production from Northstar was about 6,800 boe/d. Current ownership: BP 98.6 percent, Murphy 1.4 percent.

• Liberty is located on federal leases about six miles offshore in the Beaufort Sea and east of the Prudhoe Bay oilfield. BP drilled the Liberty discovery well in 1997 and expects to submit the Liberty Development and Production Plan to the federal regulators by the end of 2014. Current ownership: 100 percent BP.

• Endicott is located about three miles offshore. Endicott started production in 1987 and was the first continuously producing offshore field in the Arctic. Average net BP production from Endicott in 2013 was about 5,000 boe/d. Current ownership: BP 68 percent, ExxonMobil 21 percent, Chevron 11 percent.