Eni Acquires Dominion's GoM Assets
Eni, through its subsidiary Eni Petroleum Co. Inc., has agreed to acquire the Gulf of Mexico upstream activity of Dominion Exploration & Production.
The transaction includes production, development and exploration assets located in deepwater Gulf of Mexico, in the continental shelf and in Texas and Louisiana state waters as well as the staff based in New Orleans. Around 60% of the overall leases are operated.
The agreed price for the cash transaction is US $4,757 million inclusive of exploration assets for US $680 million. The effective date is July 1, 2007.
The acquisition will increase Eni's equity production in the Gulf of Mexico from the current 36,000 boepd to more than 110,000 boepd in the second half of 2007 and the 2P equity reserves by 222 million boe, at an implied cost per barrel of US $ 18.4. In 2007/2010, production from the acquired assets will average more than 75,000 boepd.
Main fields are Devils Tower, Triton and Goldfinger (75% operated) and Front Runner (37.5%) producing fields as well as San Jacinto (53.3% operated), Q (50%), Spiderman (36.7%) and Thunderhawk (25%) developing fields. These fields account for around 70% of total 2P reserves acquired from Dominion.
In addition, Eni will further enhance its portfolio in the Gulf of Mexico thanks to new leases with significant exploration potential. The transaction is subject to government approvals, 30-days notice to holders of certain preferential rights to purchase (which apply to less than 5% of 2P reserves), and to other customary conditions precedent. Closing is anticipated on July 2nd, 2007.
The deal is consistent with Eni's strategy of acquiring hydrocarbon reserves and production in key areas, where it can increase materiality and play an important role as operator utilizing Eni skills and technologies in deepwater development.
This acquisition - said Paolo Scaroni, Eni's CEO - is central to our strategy. We grow our production and achieve relevant synergies with Eni's other US activities. Through this transacion we reach the necessary critical mass for our activities in the Gulf of Mexico, and will leverage on our technologies and competence in off-shore and deep off-shore. This acquisition of oil assets follows the acquisitions undertaken this year in Congo, Angola, Alaska and Russia and represents a further step in our growth strategy.
Eni has been operating in the United States since 1966 with exploration and development activities and currently holds interests in 242 leases in the Gulf of Mexico and 151 leases in Alaska.
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