W&T Offshore Buys Remaining Stakes In Three GOM Fields

Houston-based oil and gas company W&T Offshore has acquired the remaining working interests in Gulf of Mexico oil and gas producing assets purchased earlier this year from an undisclosed private seller.

W&T Offshore said that the assets were in Federal shallow waters in the central region of the Gulf of Mexico at Ship Shoal 230, South Marsh Island 27/Vermilion 191, and South Marsh Island 73 fields.

The transaction had an effective date and closing date of April 1, 2022, and the cash consideration of around $17.5 million was paid to the seller using cash on hand.

This transaction adds internally estimated proved reserves of approximately 1.4 million barrels of oil equivalent (70 percent oil) and proved and probable, or 2P reserves, of 2.0 million Boe (75 percent oil) as of December 31, 2021, assuming strip pricing as of March 2, 2022.

The company will also now have an estimated net sales rate of approximately 900 boe per day. W&T Offshore will also add an average of 20 percent working interest in over 50 gross producing wells currently operated by the company across three shallow-water fields.

All this provides additional upside from additional pay sands in existing wellbores and potential opportunities for future drilling.

“We were pleased when we were able to purchase our initial interests in these fields in the first quarter of the year and this transaction further consolidates our ownership over those assets,” Tracy W. Krohn, Chairman and Chief Executive Officer of W&T Offshore, said.

“As was noted when we announced the original acquisition earlier this year, the assets are very complementary to our existing assets with a solid base of proved reserves and strong free cash flow and upside potential.

“Acquisitions such as this one are one way that we create value for our shareholders, and we will continue to seek other accretive transactions,” Krohn added.

To remind, the company bought the initial interest in 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 in February.

The acquisition includes 53 producing wells and 16 structures. The acquisition was funded entirely using $30.2 million on hand.

To contact the author, email bojan.lepic@rigzone.com