W&T Offshore Buys Producing Gulf Of Mexico Fields
Houston-based oil and gas company W&T Offshore has expanded its Gulf of Mexico portfolio with the acquisition of several oil and gas producing assets in U.S. Federal shallow waters.
The acreage is located in the central region of the Gulf of Mexico and was bought for a cash consideration of $47 million. The transaction will have an effective date of July 1, 2021, and is anticipated to close by the end of the first quarter of 2022.
The new assets add internally estimated proved reserves of 5.5 million barrels of oil equivalent as well as 2P reserves of 7.6 million boe. This will also add over 50 gross producing wells in three shallow-water fields.
“Acquisitions are a core component of how we create value at W&T and this transaction is another great example of an acquisition that adds value for our stockholders. It meets all of our selection criteria, has a strong base of proved developed reserves, provides us with identified upside potential without significant capital costs, and allows us the ability to reduce costs to further increase free cash flow,” Tracy W. Krohn, Chairman and Chief Executive Officer, said.
More specifically, W&T is acquiring the Ship Shoal 230, South Marsh Island 27/Vermilion 191, and South Marsh Island 73 fields from ANKOR E&P Holdings Corporation and KOA Energy. The acquisition includes 53 producing wells and 16 structures. The acquisition will be funded entirely using cash on hand.
“These assets complement our existing high-quality portfolio extremely well, and given we operate other assets near these properties, we believe we’ll be able to leverage our scale and expertise to capture synergies and maximize the value of these assets. The current environment for acquisitions in the Gulf of Mexico continues to be very good and we are well-positioned to pursue additional attractive opportunities that present themselves,” Krohn added.
It is worth noting that the current estimated production from the properties is 2.5 MBbl per day of oil and 5.4 MMcf per day of natural gas or a total of 3.4 MBoe per day.
Since the transaction is expected to close in early 2022, net reserves added from the transaction will be included in W&T’s mid-year 2022 reserve report. The transaction will increase W&T’s Federal shallow water acreage by approximately 57,500 gross acres.
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