Stone Energy Corporation on Wednesday closed the previously announced acquisition of deepwater assets from BP Exploration & Production.
The acquisition includes BP's 75 percent operated working interest in the five block deepwater Pompano field in Mississippi Canyon, a 51 percent operated working interest in the adjacent Mississippi Canyon block 29, a 50 percent non-operated working interest in the Mica field, which ties back to the Pompano platform, and interests in 23 deepwater exploration leases located in the vicinity of the Pompano field.
The stated purchase price of $204 million was adjusted under the agreement to $167.6 million, after adjusting for the effective date of July 1, 2011. The final purchase price is subject to further adjustments for the subsequent period through the closing date.
The acquisition was funded from cash on hand and $45 million in borrowings under Stone's revolving bank credit facility. Following the completion of the closing on Dec. 28, Stone had $45 million in bank borrowings and $61.1 million in letters of credit outstanding under its bank credit facility, with availability of $293.9 million under its bank credit facility.
Stone's preliminary review of the estimated proved reserves relating to the acquired properties indicated estimated proved reserves of approximately 17 MMboe as of Dec. 28, which were approximately 83 percent oil.
Stone's preliminary estimate of the asset retirement obligation associated with the properties is approximately $60 million.
The Pompano platform is a production hub with seven producing leases, currently producing at an average rate of approximately 3,300 Boe per day, net to Stone. The production hub has production capacity of 60,000 Bopd and 135 MMcf/d of gas, which could allow for potential processing of additional third party production.
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