EEX Sells Gulf Of Mexico Shelf Properties
EEX Corporation has agreed to sell its interests in approximately 100 offshore lease blocks located in the shallower waters of the Gulf of Mexico to an undisclosed purchaser. These properties contain estimated proved reserves of 58 billion cubic feet equivalent (of which 33% are proved producing) as of Oct. 1, 2000 and had average daily production of 32 million cubic feet equivalent (net) during the third quarter 2000. EEX will retain the rights to deeper, non-producing horizons in ten of the blocks. The effective date of the sale is Oct. 1, 2000. Closing is scheduled to occur before year-end and is subject to the satisfaction of certain conditions that are described in the purchase and sale agreement. The purchaser will pay $60 million, adjusted for production after Oct. 1, preferential rights exercised by others and other customary adjustments. This sale will eliminate approximately $26 million of accrued abandonment liabilities from EEX's balance sheet and the Company expects to have no significant gain or loss on the sale of these assets.
"As a result of our previously announced decision to shift capital spending from our mature shelf properties to onshore programs with higher potential return, these properties became candidates for sale. While this transaction represents our exit from the shallower or conventional shelf play, we continue to pursue deep drilling exploration prospects on 34 shelf blocks," said Tom Hamilton, chairman and president, chief executive officer.