Oil and natural gas producer W&T Offshore has signed an agreement to acquire all of Callon Petroleum’s exploration and production deepwater field properties in the Gulf of Mexico, for $100m.
The transaction includes a 15% working interest in the Medusa field, including deepwater Mississippi Canyon blocks 538 and 582, plus a ten percent membership interest in Medusa Spar, which owns a 75% interest in the field’s production facilities.
According to W&T, the transaction also includes various interests in 12 non-operated Gulf of Mexico fields.
W&T Offshore will acquire total net proved reserves, including 2.4 million barrels of oil equivalent, all of which are classified as proven developed reserves.
Probable reserves of 2.3 million barrels of oil equivalent and possible reserves of two million barrels of oil equivalent will also be acquired, as part of the transaction.
Based on SEC reserves definitions and recent NYMEX pricing, the reserves were determined by Netherland, Sewell and Associates as of 1 July 2013.
Average gross daily production from the interests being acquired in the Medusa field during September stood at 7,000 barrels of oil equivalent, of which 88% is said to be oil.
From the remaining properties, average net daily production being acquired was approximately 5.1 million cubic feet of natural gas equivalent, of which 98% is natural gas.
W&T Offshore chairman and chief executive officer Tracy Krohn said acquisition will add another deepwater field to its growing portfolio.
"The addition of reserves, production and infrastructure from this acquisition, coupled with the significant exploration opportunities in addition to our 3P reserve estimates, supports our ongoing efforts to expand the deepwater footprint of the company," Krohn added.
The transaction is expected to close on 30 November 2013.
Image: W&T’s acquisition includes various interests in Callon Petroleum’s 12 non-operated Gulf of Mexico fields. Photo courtesy of suwatpo / FreeDigitalPhotos.net.