Murphy to acquire deep water Gulf of Mexico assets from LLOG

24 April 2019 (Last Updated April 24th, 2019 11:51)

US exploration and production company Murphy has entered a definitive agreement to acquire deep water Gulf of Mexico assets for a cash consideration of $1.375bn.

Murphy to acquire deep water Gulf of Mexico assets from LLOG
Murphy Oil to buy deep water Gulf of Mexico assets for $1.38bn. Credit: Berardo62.

US exploration and production company Murphy has entered a definitive agreement to acquire deep water Gulf of Mexico assets for a cash consideration of $1.375bn.

The assets are acquired from LLOG Exploration Offshore and LLOG Bluewater Holdings.

As part of the agreement, Murphy is required to pay additional $200m if revenue from certain assets exceeds specified threshold level between 2019 and 2022 and another $50m following the first oil production from certain development projects. Murphy will fund the acquisition with a combination of cash on hand and debt under its $1.6bn revolving credit facility.

The deal strengthens Murphy’s deep water offshore footprint by adding 26 Gulf of Mexico blocks, including seven producing fields, four development projects and future start-ups. It also increases Murphy’s Gulf of Mexico production by 32,000 to 35,000 net barrels of oil equivalent per day (Boepd) this year.

“This immediately accretive transaction continues to strengthen our Gulf of Mexico portfolio by adding quality assets at a very attractive price.”

 

Murphy’s net production from Gulf of Mexico assets is expected to be around 85,000 Boepd in 2019, excluding non-controlling interest. The acquisition expands operated production throughout the region from existing 49% to 66% of daily production.

Murphy Oil president and CEO Roger W. Jenkins said: “This immediately accretive transaction continues to strengthen our Gulf of Mexico portfolio by adding quality assets at a very attractive price.

“We expect these newly acquired assets to generate meaningful cash flow over the next several years that will provide us with additional flexibility for future capital allocation.”

The transaction is expected to close in the second quarter of 2019, subject to customary closing conditions.

In March 2019, Murphy signed an agreement to sell its Malaysian portfolio for $2.13bn in a bid to simplify its operations.