Offshore staff
(US) - W&T Offshore, Inc. announced that it has entered into an agreement to merge a wholly-owned subsidiary of W&T with a wholly-owned subsidiary of Kerr-McGee Oil & Gas Corp., which owns substantially all of the GoM shelf properties of Kerr-McGee.
Base merger consideration for the transaction is approximately $1.4 billion in cash. Upon completion of the merger, W&T will own 100% of the membership interest in the Kerr-McGee subsidiary. The transaction is effective as of Oct. 1, 2005, and it is expected to close during 2Q 2006, pending regulatory review and customary closing adjustments and conditions.
The properties involved in this transaction are located on the Outer Continental Shelf and in state waters of the US GoM. W&T estimates that there are approximately 362 Bcfe of net proved reserves, as of the transaction effective date. Approximately 74% of the proved reserves are natural gas and 72% are proved developed reserves. The company further estimates the properties' probable and possible reserves to be an additional 650 Bcfe.
The properties include interests in approximately 100 fields on 249 offshore blocks (83 are undeveloped), primarily in water depths of less than 1,000 ft. W&T plans to operate 36 of the producing fields with working interests, which represents 66% of the net production and 60% of the net reserves. Upon closing of the transaction, the company is expected to be one of the top three acreage holders in the GoM, with approximately 2.3 million gross acres.
Tracy W. Krohn, chairman and CEO, stated, "As we told the market when we went public last year, one of our objectives was to put the company in a position to execute larger transactions, and today we have demonstrated that we can do it. We are very excited about this transaction and the opportunities that come with it. The spread of properties across the GoM and upside potential fit in nicely with our core expertise. Our team has identified more than 95 exploration prospects related to these properties and our review is still in the early stages of evaluation."
01/24/06
