Nexen Acquires Interest in Vermilion Block 76 Field
Nexen Inc. has reached agreement to acquire interests in four leases in the Vermilion Block 76 field for total consideration of US $39.7 million. Nexen will have a 100% interest in the leases and will be the operator.
Vermilion Block 76 Field is located in 35 feet of water approximately 70 miles south west of Lafayette, Louisiana. The interests Nexen is acquiring comprise 17,500 net acres and are currently producing 17 million cubic feet of natural gas and 90 barrels of oil per day. Nexen estimates the proved reserves of the leases to be 37.2 billion cubic feet of gas equivalent (31 bcfe net of royalties).
"This acquisition has significant upside," said Nexen's President and CEO, Charlie Fischer. "The field is currently producing from just four of 24 productive horizons. We have identified upside opportunities in many of the horizons and believe we can significantly increase recoverable reserves and production over the next two or three years through a program of added compression, new wells and recompletions of existing wells."
"This is our fourth property acquisition in the shallow waters of the Gulf of Mexico since 1995," said Fischer. "These deals have all been very successful because we've been able to capture the upside identified in our evaluations and deliver low-cost production and reserve additions. Exploiting shallow-water gulf coast assets is one of our strengths and Vermilion Block 76 Field will be a core asset of our US operations."