Texas-based oil and natural gas producer W&T Offshore has closed the previously-announced purchase of ExxonMobil interests in and operator-ship of oil and gas producing properties.
The properties includes those in the eastern region of the Gulf of Mexico, offshore Alabama, and related onshore and offshore facilities and pipelines.
After taking into account customary closing adjustments and an effective date of January 1, 2019, cash consideration paid by W&T was $167.6 million which includes a previously-funded $10 million deposit.
The acquisition was funded by cash on hand and borrowings on its previously-undrawn revolving bank credit facility; W&T will also assume asset retirement obligations associated with these assets.
The transaction adds net proved reserves of approximately 74 million barrels of oil equivalent (Boe) of which 99% are proved developed producing and 22% are liquids estimated as of the effective date.
In addition, W&T Offshore announced it is the apparent high bidder on two shallow water blocks in the GOM Outer Continental Shelf (OCS) Region-wide Oil and Gas Lease Sale 253 held by the Bureau of Ocean Energy Management (BOEM) on August 21, 2019.
Tracy W. Krohn, Chairman and Chief Executive Officer, stated, "We are pleased to have closed our purchase of free cash flow positive, producing properties in the GOM from ExxonMobil exactly as scheduled. These low-decline assets add significant reserves and production to our portfolio and are adjacent to our current operations. This provides us the opportunity to recognize increased scale, rationalize operations and capture cost efficiencies to further grow cash flow."
"In addition, we remain active in seeking other new GOM opportunities through our participation in the BOEM lease sale earlier this month where we were named apparent high bidders on two shallow water blocks. We will continue to focus on maximizing value through accretive acquisitions, organic growth and operational excellence. We have a premier portfolio of both shallow water and deepwater properties that generate a solid and consistent source of cash flow with significant upside that will be further enhanced by this acquisition,” Krohn added.
