Laffayete, Louisiana-based Stone Energy agreed to sell its non-core Gulf of Mexico conventional shelf properties to Talos Energy Offshore for US$200 million in cash and $117 million in future undiscounted liabilities, the company announced on 30 June 2014.
Stone Energy plans to retain an option for a 50% working interest in the deep drilling rights on the properties. However, Stone Energy's Chairman, President, and CEO David H. Welch said the sale will allow the company to refocus on deepwater, gulf coast deep gas, and Appalachian projects. One of those projects, Stone Energy's deepwater Cardona prospect, located at Mississippi Canyon 29, encountered 84ft of net oil pay during a drilling campaign on the MC 29 #4 well back in February. Plans there include tying Cardona back to the company's 100%-owned Pompano platform where it expects to achieve first production in 2015.
Stone Energy says the sale announced today, along with two onshore South Louisiana properties in late 2013 and 1Q 2014, amount to approximately $300 million in non-core GOM shelf properties. The company also expects to receive $140 million in future undiscounted abandonment liabilities.
President and Chief Executive Officer of Talos Energy, Tim Duncan, said of the sale: “This bolt-on transaction will add more diversity to our asset base and is a perfect fit for our regional seismic database in which we already have ongoing reprocessing efforts. The deep joint venture on these assets creates a built in partner and we view this as a win-win transaction for both sides.”
The properties up for sale account for 7MMcfe/d for 1Q 2014, of which 58% is natural gas, Stone Energy said. The estimated proved reserves represents approximately 9% of Stone's yearend 2013 estimated proved reserves.
Stone and Talos expect the sale date to be effective 1 April 2014, and close by early August.
Image: Ensco 8502/Stone Energy Corp.