Cal Dive Acquires Interest in South Marsh Island 130 Field
Energy Resource Technology, a wholly-owned subsidiary of Cal Dive International, Inc., has acquired the 74.8% working interest of Shell Exploration & Production Company in the South Marsh Island 130 (SMI 130) field. ERT paid $12.2 million in cash and assumed Shell's pro-rata share of the related decommissioning liability.
ERT also announced that it has completed the purchase of seven Gulf of Mexico fields from Amerada Hess (NYSE: AHC), including its 25% ownership position in SMI 130. As a result, ERT will take over as operator with an effective 100% working interest in that field. SMI 130 consists of two blocks, located in approximately 215 feet of water, with approximately 155 wells on five 8-pile platforms. Currently the field produces approximately 4,000 barrels of oil per day from 50 active wells. It has produced in excess of 200 million barrels of oil equivalent since first production in 1976.
Owen Kratz, Chairman and Chief Executive Officer of Cal Dive, said, "We are gratified by the trust which Shell has placed in our ability to effectively operate and decommission such a significant oilfield. In light of current oil prices, we expect to remove commodity price risk by hedging much of the acquired production, thereby assuring a significant level of cash flow through the end of 2003. The expected timing of much of SMI 130 abandonment work is eight to nine years out. This should provide ample opportunity for ERT to design and implement an aggressive well exploitation program at SMI 130. Over the last decade ERT has demonstrated that its exploitation expertise can add significant value to acquired properties."