Murphy Closes King's Quay FPS Deal
Murphy Oil Corporation’s (NYSE: MUR) subsidiary, Murphy Exploration & Production Company – USA, has closed its deal with a fund managed by ArcLight Capital Partners for the sale of Murphy’s 50 percent stake in the King’s Quay floating production system (FPS) and associated export lateral pipelines to be located in the Gulf of Mexico.
The King’s Quay FPS and associated laterals will be co-owned in a joint venture with entities managed by Ridgewood Energy Corporation, including ILX Holdings III. Murphy said the transaction reimburses its past capital expenditures of approximately $270 million related to the project and revealed that it intends to use the proceeds to repay borrowings under a $1.6 billion senior unsecured credit facility, with the remainder to be held for “general corporate purposes”.
The King’s Quay FPS is more than 90 percent built and is scheduled to go into service in mid-2022, Murphy highlighted, adding that it is designed to process 80,000 barrels of oil per day and 100 million cubic feet of natural gas per day.
“We are pleased to announce the completion of this transaction,” Roger W. Jenkins, the president and chief executive officer of Murphy, said in a company statement.
“Coupled with the receipt of necessary regulatory permits for our entire drilling campaign to begin on April 1, 2021, we remain on target for first oil in mid-2022 in the Khaleesi/Mormont and Samurai fields,” he added.
“By utilizing the King’s Quay FPS transaction proceeds to repay our revolver borrowings, along with our recent bond issuance to extend our debt maturity profile, Murphy has a well-positioned balance sheet with ample liquidity as we enter the execution phase of this key project,” Jenkins continued.
Murphy Oil Corporation is an independent oil and natural gas exploration and production company based in Houston, Texas. The company traces its roots back to the early 1900s.
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