W&T Offshore has signed an agreement to acquire ExxonMobil’s interests in and operatorship of oil and gas producing assets in the eastern region of the Gulf of Mexico (GOM) offshore Alabama for $200m.
The acquisition will also include ExxonMobil’s onshore processing facilities.
W&T Offshore will buy working interests in shallow water producing fields and related operatorship in the Mobile Bay area. All the properties are located close to existing properties owned and operated by the company.
The acquisition will add net proved reserves of 74 million barrels of oil equivalent (MMboe) of which 99% are proved developed producing and 22% are liquids as of the effective date.
W&T Offshore chairman and CEO Tracy Krohn said: “We are pleased with this purchase of producing properties, which meets all the criteria we have outlined in the past as necessary to drive increased shareholder value from acquisitions.
“These low decline assets are highly accretive, free cash flow positive, and adjacent to our current operations thereby providing us the opportunity to recognise increased scale, rationalise operations and capture cost efficiencies to further grow cash flow.
“In addition, we also have the opportunity for further growth in reserves from potential field life extensions and drilling and facility upgrade opportunities.”
ExxonMobil’s onshore treating facility, along with W&T Offshore’s existing treating facility will allow for flexibility in processing the produced gas and allow for future consolidation of operations. The company expects to close the acquisition around 30 August.