Stone Looks to Make Bigger Ripples in GOM
Stone Energy Corp. on Wednesday announced that it has exercised preferential rights to acquire additional working interests in Mississippi Canyon Blocks 108 and 109 in the Gulf of Mexico (GOM) for approximately $190.5 million, before closing adjustments.
Pending the execution of a purchase and sale agreement, Stone expects the proposed acquisition to close in late June or early in the third quarter. The deal would give Stone a 100% working interest in Mississippi Canyon Block 109 (up from 33%), a 24.8% working interest in Mississippi Canyon Block 108 (up from 16.5%), and make it the field operator.
Currently, production from both blocks is shut in awaiting repairs to an oil pipeline that was damaged during Hurricane Katrina. The pipeline transports oil from the Amberjack platform on Mississippi Block 109, and the repair is expected before year-end.
Stone intends to finance the proposed acquisition with floating rate debt. If the proposed acquisition is not completed, Stone intends to use the proceeds from this floating rate debt to reduce indebtedness under its credit facility. The floating rate debt has not been and will not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act of 1933.
An independent oil and gas company headquartered in Lafayette, La., Stone is engaged in the acquisition and subsequent exploration, exploitation, development, operation, and production of oil and gas properties located in the conventional shelf of the GOM, deep shelf of the GOM, deep water of the GOM, several basins of the Rocky Mountains, the Williston Basin, and Bohai Bay, China.