US, GoM -- McMoran Exploration Co. has entered into an agreement with Newfield Exploration Co. to purchase the company's producing shallow water properties for $1.1 billion in cash. The deal is expected to close in the third quarter.
Included in the transaction are 125 fields on 146 offshore blocks producing 270 MMcfe/d of gas. Proved reserves are 327 bcfe of gas across 1.3 million gross acres.
McMoran is also acquiring a 50% interest in Newfield's non-producing leases (19 blocks/100,000 gross acres) on the shelf and an interest in leases associated with the Treasure Island ultra-deep prospect inventory. After closing, McMoran will become operator of Treasure Island.
"This acquisition is a strategic fit for McMoran," says James R. Moffett and Richard C. Adkerson, McMoran co-chairmen. "It is financially compelling, provides significant current production and cash flows, and offers substantial exploration and exploitation upside in an area that our team knows well. We will continue to aggressively pursue the potential from our deep gas exploration program."
"The sale of our shelf properties is the first in a series of planned divestitures that also include our assets in Bohai Bay China, the North Sea, and select properties in Texas and Oklahoma," says David A. Trice, Newfield chairman, president, and CEO. "We will be retaining our shelf exploration team and we will continue to explore and drill shelf prospects in the Gulf of Mexico."