Murphy Oil has signed a sale and purchase agreement through its subsidiary to divest its Malaysian portfolio to a subsidiary of PTT Exploration and Production Public Company (PTTEP) for $2.13bn.

The deal involves the divestment of its two primary Malaysian subsidiaries, Murphy Sabah Oil and Murphy Sarawak Oil.

Under the terms of the agreement, PTTEP will also pay around $100m based on certain future exploratory drilling results before October 2020.

Murphy Oil was reportedly planning to sell  its Malaysian oil and gas assets since November 2018.  The completion of the deal will mark the company’s exit from the country.

The sale is expected to provide the company with greater financial flexibility and enable it to focus on its assets in the western hemisphere. A section of the proceeds will be used to reduce company debt and return cash to shareholders through share repurchases. Another $750m has been earmarked to support its oil and gas exploration works and potential acquisitions in the US.

“The tactical repositioning of Murphy allows us to simplify our business and focus on our core assets in the Western Hemisphere”

In October 2018, Murphy Oil signed an agreement with Petrobras to form a joint venture (JV) company to carry out oil and gas exploration in the Gulf of Mexico.

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Murphy Oil president and CEO Roger W. Jenkins said: “After 20 years of successful operations in Malaysia, I am pleased to announce this all-cash transaction benefiting our shareholders by fully monetising our proved and probable reserves.

“The tactical repositioning of Murphy allows us to simplify our business and focus on our core assets in the Western Hemisphere.”

The sale of the Malaysian assets is expected to be completed by the end of the second quarter of 2019, subject to customary closing conditions and regulatory approvals.

In 2018, total production net to Murphy for the oil and gas assets to be divested was more than 48,000 barrels of oil equivalent per day (boepd).