W&T Offshore Buys GoM Assets From Exxon

W&T Offshore announced June 27 that it has agreed to buy oil and gas producing assets in the Gulf of Mexico from ExxonMobil for $200mn.

The Houston-based company said it has entered into a purchase and sale agreement with the giant to acquire its interests in nine shallow water fields offshore Alabama. W&T will also become the operator of the assets.

An onshore processing facility, which sits adjacent to existing properties owned and operated by W&T, will also swap hands. The transaction is expected to close by the end of August 30.

The deal offers “significant synergies, consolidations and cost savings as W&T will become the largest operator in the area,” the New-York-listed company said in a statement.

The deal adds net proved reserves of 74mn barrels of oil equivalent to W&T’s reserves, of which 99% are proved developed producing and 22% are liquids. W&T claims there is the potential to add incremental reserves with little or no capital by consolidating operations and extending field life, as well as additional upside opportunities from potential future drilling locations and facility modifications.

ExxonMobil produced approximately 19,800 net boe/day from the acquired properties in the first quarter of 2019, of which 25% was liquids.

The US giant announced June 22 that it plans to sell all of its remaining production assets in Norway, which have been valued at around $3bn. The sales may be part of a programme to raise cash to power a long-awaited share buy back programme. Exxon's CEO suggested earlier this year that the company could reap $15bn via asset sales by 2025.