U.S. Gulf of Mexico-focused oil and gas company W&T Offshore has agreed to buy working interests in and operatorship of oil and gas producing properties in Federal shallow waters in the central region of the Gulf of Mexico from privately-held ANKOR E&P Holdings Corporation and KOA Energy LP for total cash consideration of $47 million.
W&T is acquiring operated, producing shallow water assets in the central region of the GOM at Ship Shoal 230, South Marsh Island 27/Vermilion 191, and South Marsh Island 73 fields for cash consideration of $47 million and assumption of related asset retirement obligations. The acquisition includes 53 producing wells and 16 structures.
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.
W&T Offshore said the acquisition would adds internally-estimated proved reserves of 5.5 million barrels of oil equivalent (Boe) (69% oil) and proved and probable, or 2P, reserves of 7.6 million Boe (75% oil) as of July 1, 2021 assuming strip pricing as of December 7, 2021.
The current estimated production of the assets is around 3.4 MBoe per day (74% oil).
The buyer said the deal adds over 50 gross producing wells (average working interest of 80%) in three shallow-water fields; provides potential upside through recompletions and operational synergies; and will be funded using cash on hand.
Tracy W. Krohn, Chairman, and Chief Executive Officer said: “I am pleased to announce this acquisition of oil-weighted operated producing properties that are generating positive cash flow. 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.
"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.”