US-based W&T Offshore has acquired ExxonMobil’s interests in producing oil and gas properties in the eastern region of the Gulf of Mexico, offshore Alabama for $167.6m.

As part of the acquisition, W&T also purchased related onshore and offshore facilities and pipelines. The transaction was financed by cash on hand and borrowings on the company’s previously undrawn revolving bank credit facility.

The acquisition adds net proved reserves of nearly 74Mboe of which 99% are proved developed producing and 22% are liquids estimated as of the effective date of 1 January 2019.

In the first quarter of 2019, the properties acquired from ExxonMobil produced approximately 19,800boe/d. The transaction enables W&T to create significant synergies and cost savings.

It also highlights the potential to add progressive reserves with little or no capital by integrating operations and extending field life.

W&T further added that 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, which is held by the Bureau of Ocean Energy Management (BOEM).

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W&T Offshore chairman and CEO Tracy Krohn said: “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 recognise increased scale, rationalise 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.”