Independent producer W&T Offshore has signed an agreement with ExxonMobil to acquire its stakes in oil and gas producing properties in the Gulf of Mexico (GOM), for $200m (€175.9m).
Under the terms of the deal, W&T Offshore will acquire interests and operatorship in nine GOM offshore producing fields and an onshore treating facility that are located adjacent to the independent producer’s existing properties.
W&T expects the deal to provide significant synergies and make it one of the largest operators in the area by adding net proved reserves of 74 million barrels of oil equivalent (Boe).
W&T estimates the assets considered for acquisition to have potential to add incremental reserves with little or no capital
W&T Offshore chairman and CEO Tracy Krohn said: “These low decline assets are highly accretive, free cash flow positive, and adjacent to our current operations thereby providing us the opportunity to recognize increased scale, rationalize operations and capture cost efficiencies to further grow cash flow.
“In addition, we also have the opportunity for further growth in reserves from potential field life extensions and drilling and facility upgrade opportunities.
“We believe this acquisition, with its long-life reserves, production and infrastructure, complements our ongoing strategy to recognize value for our shareholders through drill bit success, effective risk and cost management, and joint venture partnership.”
The transaction, which is subject to customary post-effective date adjustments, is planned to close on or about 30August 2019.
W&T plans to fund the acquisition from its available cash and revolving credit facility.
The production from the properties considered for acquisition in the Mobile Bay area averaged approximately 19,800 net Boe per day, for the first quarter of 2019.
W&T said in a statement: “Total net proved reserves to be acquired are 74 million barrels of oil equivalent, of which 22% are liquids. The vast majority of the reserves are classified as proved developed producing.”
Source: NS Energy