King’s Quay floating production system will be located in the Gulf of Mexico. Credit: Dean Brierley / Unsplash.

Murphy Oil has divested its entire 50% stake in the King’s Quay floating production system (FPS), which is currently under construction, to a fund managed by ArcLight Capital Partners.

Planned to be commissioned in mid-2022, the King’s Quay FPS will be moored in Green Canyon Block 433 in the deepwater Gulf of Mexico, US.

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The stake sale in the King’s Quay FPS and associated export lateral pipelines was conducted by a Murphy Oil subsidiary Murphy Exploration & Production Company USA.

The King’s Quay FPS project and export lateral pipelines will be co-owned in a joint venture with entities managed by Ridgewood Energy, including ILX Holdings III.

The King’s Quay FPS will have the capacity to process 80,000 barrels of oil per day and 100 million cubic feet of natural gas per day.

It is expected to handle production from the Khaleesi/Mormont and Samurai fields.

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Murphy Oil president and CEO Roger W Jenkins said: “Coupled with the receipt of necessary regulatory permits for our entire drilling campaign to begin on 1 April 2021, we remain on target for first oil in mid-2022 in the Khaleesi / Mormont and Samurai fields.

“By utilising the King’s Quay FPS transaction proceeds to repay our revolver borrowings, along with our recent bond issuance to extend our debt maturity profile, Murphy has a well-positioned balance sheet with ample liquidity as we enter the execution phase of this key project.”

Proceeds from the sale will be used by Murphy to repay borrowings under the $1.6bn senior unsecured credit facility and for general corporate purposes.