Statoil Strengthens Position in US Gulf of Mexico

Statoil and Plains Exploration & Production have signed an agreement whereby Statoil will acquire PXP's working interest in two US Gulf of Mexico (GoM) deepwater discoveries and one exploration prospect.

Statoil will pay PXP US $700 million for these three assets. In addition, PXP will give Statoil a right of first negotiation for acquiring other deepwater GoM assets at a later stage.

"This acquisition further strengthens our deepwater position in the US Gulf of Mexico," says Peter Mellbye, executive vice president of Statoil's International Exploration & Production business area.

"The build-up of our GoM-portfolio started in 2004 with the Chevron farm-in, followed by the Exxon farm-in and the EnCana deal in 2005. The latter has proved very successful, with the current Tahiti development and the successful Jack well test. We're extremely pleased to add two important discoveries - Big Foot and Caesar - to our holdings."

Mr. Mellbye also complimented PXP on the portfolio of deepwater assets it has accumulated.

The new assets are located in the Greater Tahiti area, where Statoil is already well positioned. They comprise the following:

  • the Shell-operated Caesar discovery, in which Statoil will have a 17.5% working interest
  • the Chevron-operated Big Foot discovery, in which Statoil will have a 12.5% working interest
  • the Chevron-operated Big Foot North prospect, in which Statoil will have a 12.5% working interest.

The Caesar discovery is located between the Chevron-operated Tahiti and Tonga discoveries, in both of which Statoil has a 25% interest. Tahiti is under development, and due to come on stream in 2008.

Located in the same geological trend as Tahiti and Caesar, the Big Foot discovery lies in the Walker Ridge area close to the Jack and St Malo discoveries operated by Chevron. Statoil holds a 25% working interest in Jack and 6.25 % in St Malo.

Pending field development solutions, both discoveries are expected to be in production after 2010.

"PXP has a record of successfully gaining access to high quality prospects, and we look forward to an ongoing dialogue with this company as its GoM portfolio matures," says Oivind Reinertsen, senior vice president for Statoil's US GoM activities.

"We're rapidly building a competent organization in Houston. We bring with us relevant experience and technologies from the Norwegian continental shelf, which will contribute to the future development of complex deepwater projects in the GoM."

The transaction is expected to close in early November. Existing leaseholders have pre-emption rights which must be exercised no later than 30 days after they have been notified of the sale.