ExxonMobil to sell some Gulf of Mexico Shelf assets to Energy XXI for $1.01-bn
22 Nov 2010
The world'd largst oil firm will sell a part of its shallow-water Gulf of Mexico shelf oil and natural gas interests to independent oil and gas exploration company Energy XXI, which today confirmed having executed a purchase and sale agreement to acquire ExxonMobil's stake for $1.01 billion.
The assets, which include nine fields off the coasts of Louisiana and Alabama in the Gulf of Mexico shelf, currently produce approximately 20,000 net BOE per day (BOE/d), about 53 per cent of which is oil. Offshore leases included in the sale total 130,853 net acres.
The properties are estimated to contain net proved and probable reserves of 66 million barrels of oil equivalent (BOE), 61 per cent of which is oil. Proved reserves are estimated at 30.1 million barrels of oil and 116.1 billion cubic feet of natural gas, or a total of 49.5 million BOE, 68 per cent of which are proved developed.
"The ExxonMobil properties are an extraordinary fit with our existing, oil-focused core assets, which generate some of the highest margins in the industry," Energy XXI chairman and CEO John Schiller said.
"With this acquisition, we are gaining access to production, infrastructure and extensive acreage complemented by seismic data and field studies. As operator of 94 per cent of the assets being acquired, we would have a portfolio of drilling and recompletion opportunities that we can pursue while analyzing the potential for higher-impact exploration prospects," he added.
The acquisition will catapult Energy XXI to the third-largest oil producer in the Gulf of Mexico shelf, with interests in seven of the top 11 oil fields, the company said in a statement.
Energy XXI has paid 10 per cent cash deposit for the deal and plans to borrow up to $800 million in order to pay for the properties, it said in its statement.
Hamilton, Bermuda-based Energy XXI is an acquirer, developer, explorer and operator of oil and natural gas properties onshore in Louisiana and Texas and offshore in the Gulf of Mexico.
The company has completed four major acquisitions totalling approximately $1.4 billion since its founding in October 2005, creating a company with more than 75 million barrels of oil equivalent (BOE) of proved reserves and about 26,000 BOE per day of production, 68 per cent of which is oil.
Energy XXI operates approximately 80 per cent of its proved reserves, with 287 wells in 51 producing fields. The company reported revenues of $434 million in 2009, while it narrowed down its loss of $571.6 million in 2008 to 27.3 million last year.